Trade-related Agreements with the Republic of India
Nepal’s first treaty on trade with India was signed on 31 July 1950. The last revision of the treaty was undertaken on 27 October 2019. The Treaty allows Nepali goods –those listed as primary goods, including agricultural—duty-free-quota-free access in Indian markets. However, there is quantitative restriction imposed on the four items on –vegetable ghee, acrylic yarn, copper products and zinc oxide.
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Besides the Treaty on Trade, Nepal and India have also signed a Treaty on Transit, which allows Nepal to undertake third country trade through Indian Territory through mutually agreed upon route. Nepal and India have also an agreement in place that allows cargoes originating from and delivered to Nepal to use Indian railways. Considering the open border between Nepal and India, the two countries have also signed an agreement of cooperation to control unauthorized trade that forbids export of goods imported in Nepal to be exported to India without undertaking any manufacturing activity and vice versa.