Research Team: Nisha Taneja, Monisha Grover, Rashmi Rastogi, Shravani Prakash (ICRIER), Subhanil Choudhury and Nishchal N. Pandey (External Consultants)
Commencement: March 2009
Completion: March 2011
Funded by: Confederation of Indian Industry, 25 months
India’s trade and economic co-operation with Nepal has been governed by several treaties, which have been renewed and modified over the years. This study examines how Indo-Nepal economic relations can be strengthened. The study identifies potential products that can be traded between the two countries. It also examines the potential to increase trade in the hydropower and services sectors, and suggests measures to widen and deepen trade and economic relations between the two countries. The study finds that there are possibilities for intra-industry trade in the garments sector. Other potential items for export from Nepal include processed foods, readymade garments and pharmaceuticals while those from India include plastic and electrical goods. Lack of recognition of standards by India is a major non-tariff barrier that Nepalese exporters face while accessing the Indian market. The study suggests that India can help Nepal in developing an integrated hydropower development policy, which will address problems related to infrastructure, licensing, transmission and distribution. The study finds that in service sectors such as health and education, India and Nepal have had several successful collaborations. Areas where there is potential for trade include tourism, telecommunications, information technology, environment services, intellectual property rights and capacity building. The study was funded by CII and was submitted in March 2011.