India, Nepal try to ease trade, transit hurdles as trade recovers | Today’s news
India and Nepal are seeking to ease trade and transit barriers as bilateral goods trade recovers from a two-year decline in fiscal year 2024 (FY24), with the two countries reviewing market access, customs procedures, border infrastructure and connectivity at a bilateral meeting earlier this week, India’s commerce ministry said in a statement on Friday.
Bilateral trade in goods between India and Nepal declined from a peak of around $11.02 billion in FY22 to $8.92 billion in FY23 and $7.87 billion in FY24 – a cumulative decline of about 28.5%. It has since increased to $9.39 billion in FY26, according to commerce ministry data released by the Embassy of India in Kathmandu.
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India’s exports to Nepal were $7.45 billion, while Nepal’s exports to India were $1.94 billion. India is Nepal’s largest trading partner, accounting for about 62.3% of Nepal’s total foreign trade, according to the same official data. Nepal was India’s 12th largest export destination in FY26.
Facilitation of trade and transit
Quick answers to key questions
•5 QUESTIONS
India and Nepal are discussing measures to improve market access, customs procedures, border infrastructure and connectivity to ease barriers to trade and transit.
Bilateral trade in goods between India and Nepal declined due to various factors, leading to a cumulative decline of about 28.5% from FY22 to FY24 before recovering.
India and Nepal plan to strengthen customs cooperation through pre-arrival information exchange, electronic verification of certificates of origin and greater automation and digitization of customs.
Yes, continued cooperation on food and agricultural product safety is essential to facilitate legitimate trade and ensure compliance with standards and phytosanitary requirements.
The India-Nepal Intergovernmental Subcommittee serves as an institutional mechanism for examining trade-related issues and facilitates bilateral trade and transit between the two countries.
The India-Nepal Intergovernmental Sub-Committee (IGSC) on Trade, Transit and Cooperation in Controlling Illicit Trade met on 16-17 September at Vanijya Bhawan in New Delhi.
The Indian delegation was led by Ujjwal Kumar Ghosh, Joint Secretary, Ministry of Commerce, while the Nepalese delegation was led by Buddha Bahadur Gurung, Joint Secretary, Ministry of Industries, Commerce and Supplies, according to a Commerce Ministry statement.
The two sides discussed measures to expand market access for products from both countries, including agricultural and dairy products, food, pharmaceuticals, medical devices and AYUSH products. They also reviewed standards, food safety and phytosanitary requirements.
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Another focus was customs cooperation and trade facilitation. Negotiations included the exchange of pre-arrival information, electronic verification of certificates of origin and greater automation and digitization of customs.
The aim was to facilitate legitimate trade while strengthening compliance mechanisms and preventing abuse of preferential trade arrangements, the commerce ministry said.
Transit and connectivity were also prominent, with both sides exploring rail and road links, cargo movement, integrated checkpoints and land port infrastructure. They discussed improving the use of existing infrastructure and addressing operational barriers affecting bilateral and transit trade.
The meeting also covered cooperation on standards, food safety, plant quarantine and conformity assessment, including institutional cooperation and capacity building initiatives.
India and Nepal further highlighted continued cooperation between relevant agencies to facilitate legitimate cross-border trade and address illicit trade and trade fraud.
India’s key exports to Nepal include petroleum products, iron and steel, automobiles, machinery and cereals. Nepal’s exports to India include cardamom, rolled sheets, edible oil, juices, plywood and jute, according to official trade data.
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The IGSC is an institutional mechanism for examining trade-related issues and facilitating bilateral trade and transit. Both sides agreed to maintain close engagement through established mechanisms and to pursue time-bound follow-up on issues requiring further technical investigation.
India and Nepal share close historical, cultural and economic ties, with India also being an important source of investment in Nepal, the ministry said.
