Nepal's finance minister Dr Yubaraj Khatiwada on Saturday (January 25) said that ban on import of palm oil has been a worry for his country, and Kathmandu has taken up the issue with Delhi. Speaking to WION correspondent in Kathmandu, the finance minister lauded India's support to Nepal and talked about trickle-down benefit in several areas, including investment opportunities.
Q: How do you see the relationship between India and Nepal in terms of finance and trade?
A: We have a lot of interdependence between the two countries. Nepal's 2/3rd trade is from India which is our largest investment partner. Indian ports are our access to the world, and we have been working very closely. When the Indian economy performs well, we have trickle-down benefit in several areas, and this includes investment opportunities. We would like to see our neighbour prosperous and also expect that our neighbour should also support Nepal to prosper.
Q: What kind of support you would like to see from New Delhi for your development needs?
A: It's a long menu, first is infrastructure connectivity. We are talking about better road connection, waterways, and electricity transmission lines. They are happening, thanks to the government of India supporting Nepal in better connectivity, which includes an optical fibre that we have set up with India's support. The second will be a review of trade relations. Nepal being a small economy will like to get favourable treatment in terms of non-reciprocal treatment for some of our produces. Often times, we may not able to compete in the market place, therefore, would like to see non-reciprocity in trade relations as our products are very small. Another area is trade facilitation, thanks to India for ICP. Exim bank is doing a lot of works, in terms of leveraging our financial requirements.
Q: Demonetisation impacted you. Are the worries associated with it over?
A: The previous government should have approached the Indian government right on time. You know, now this is a standing issue. We don't want to stick to that issue. Indian currency is regional currency, and large denomination currency notes that people can carry to Nepal should be managed in a better way so that in future we don't have to repeat such kind of problems. I should be looking forward, so that in a futuristic way, that any kind of problem that was created in the past should not be repeated when new currency notes, large denomination notes, were issued by India. Nepal is not comfortable to carry the notes, with the fear that they will not be accepted back to India. We just want to see that currency management takes a smoother path.
Q: Import of palm oil by India is another thing that your country has been very vocal about.?
A: Actually, under SAFTA we have value add requirement for exports. Our palm oil exports have value add for more than 30% which is the minimum requirement, and secondly, our companies are established long back 20-30 years, and they have been doing business. Our exports are a very small component of India's import. I don't think, India's industry will be injured, with this kind of allowance. We are trying to have a talk with Indian counterpart through diplomatic channels and convince the authorities concerned that it should be resumed so that our Industry doesn't suffer.
Q: Do you think SAARC as a common market is dead?
A: Not yet. Not fully yet. We have been talking about SAARC intraregional trade at about 5% of the region's total trade, and our trade is not even half the potential we have. Its just 1/3. So the markets are also complementaries. Like tourism, India, Nepal, Pakistan, Sri Lanka, Bangladesh can have a tourist circuit for south Asia so that every country can benefit. In energy and agriculture...we can have complementaries in that area.