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Archive for the ‘Socio Economic’ Category

All articles/contributions related to India and its socio economic conditions and relations etc. should feature here in this category……

INDIA-BANGLADESH RELATIONS

Posted by publishedforscholar on December 18, 2006

INDIA-BANGLADESH RELATIONS
Compiled by: Kriti (BBA-II, IMS, Bikaner)

General
India and Bangladesh share a common border of 4096 kms running through 5 states viz. West Bengal, Assam, Meghalaya, Tripura and Mizoram as well as a shared history and socio-cultural heritage. India’s relations with Bangladesh are multidimensional and have traditionally been friendly. Regular high level exchanges of visits and meetings take place side by side with wide-ranging people-to-people interaction. Cultural affinities with India in general and West Bengal in particular and ethnic linkages with India’s North Eastern States underpin the people-to-people contacts.
2. The High Commission in Dhaka issues about 500,000 visas every year and numerous Bangladeshi students are studying in India on self-financing basis and over 100 on GOI scholarships given annually. There have been several high level visits including at ministerial levels in the recent months.
Visits
3. India and Bangladesh interact regularly on various operational matters. There has also been a regular flow of high level visits. The last VVIP visit took place in June 1999 when Prime Minister Shri Atal Behari Vajpayee accompanied by a high-level official delegation including the External Affairs Minister, Shri Jaswant Singh visited Dhaka on the occasion of the inaugural run of the bus from Kolkata to Dhaka. Shri Brajesh Mishra, Principal Secretary to PM and National Security Advisor visited Dhaka
on October 26-27, 2001 as Special Envoy following formation of the new Government in Bangladesh.
4. Begum Khaleda Zia, Prime Minister of Bangladesh met PM on January 4, 2002 at Kathmandu on the sidelines of the SAARC Summit. The Prime Minister of Bangladesh met PM at Islamabad during the SAARC Summit in January 2004. PM Manmohan Singh and PM of Bangladesh Begum Khaleda Zia met in Bangkok in July 2004, on the sidelines of the BIMSTEC Summit. Various regional and bilateral issues were discussed during the meeting
5. Mr. M. Morshed Khan, Foreign Minister of Bangladesh paid official visits to India on 16-17 June 2002, on 13-16, February 2003 and 31 May-4 June 2004 as a special envoy of the Prime Minister of Bangladesh after the formation of the government carrying a letter from the Prime Minister of Bangladesh addressed to the Prime Minister of India and to Smt. Sonia Gandhi. He also visited India in October-November 2004 as the special envoy of the Prime Minister of Bangladesh to invite PM for the thirteenth SAARC summit, which got postponed. Finance Minister Mr. Saifur Rehman, visited India in May 2003 and December 2004. Other Ministerial visits include visit by Bangladesh Minister of Commece in November 2004 and Health Minister in April 2005.
6. The External Affairs Minister Shri Yashwant Sinha paid a goodwill visit to Bangladesh on 24-25 August 2002 and again in July 2003 for the bilateral Joint Economic Commission meeting. The most recent visit was by External Affairs Minister Sh. Natwar Singh to Dhaka from 6-8 August 2005.During the visit he met the Prime Minister, Finance Minister and Leader of Opposition of Bangladesh besides holding talks with the Bangladesh Foreign Minister.
7. Foreign Secretary Shri Kanwal Sibal visited Dhaka from 29-30th April, 2003 for the Foreign Secretary level consultations. Foreign Secretary Shri Shashank visited Bangladesh from 8-11 March 2004. Foreign Office Consultations between Foreign Secretaries of India and Bangladesh took place from June 21-22, 2005 in Delhi wherein the entire gamut of bilateral relations including security, trade, transit, ater
and defence exchanges, was discussed.
Infrastructural links
8. Proposals for cooperation in the transportation sector are under discussion between the two governments. These include passenger and freight movement by road and rail and movement of freight through Inland Water Transit mode.
9. Under the India-Bangladesh Air Services agreement, the two countries are permitted to operate 30 flights per week. Bangladesh (Biman) currently operates 27 flights per week. Indian Airlines by contrast operates only 3 flights per week between Dhaka and Kolkata. Recently Jet Airway has obtained permission to fly and is likely to start daily services on the Kolkata-Dhaka sector. Sahara has also expressed interest. A private BD airline, GMG, has commenced Kolkata-Chittagong and Kolkata-Dhaka flights. The Government of Bangladesh has permitted Air India to operate flights between the two countries from June-October 2005.
Bus services
10. An Agreement to commence a bus service between Kolkata and Dhaka was signed in February 1999. The regular Kolkata-Dhaka bus service was inaugurated on
19 June’99 in the presence of the Prime Ministers of both countries.
11. An Agreement and a Protocol regarding operation of the proposed bus service between Agartala and Dhaka were signed in Dhaka in July 2001 and the bus service started in September, 2003. However, it was not very successful since the Bangladesh Government levied an exit tax of Taka 500 and gave only single entry visas so that people from Tripura could not travel to Kolkata via Dhaka and back. At Home Secretary Talks on 16-17 Sept. 2004, Bangladesh agreed to give double-entry visas to Indian citizens transiting through any international airport and/or land port. Bangladesh has also lowered the travel tax to Taka 300 though it is being levied at both entry and exit points.
12. During the Foreign Office Consultations held in June 2005, both sides agreed to explore the possibility of commencing Dhaka-Guwahati, Dhaka – Shillong, Dhaka – Siliguri bus services.
Rail links
13. There are three broad gauge (BG) rail links : (i) Gede (India)-Darsana (BD), (ii) Singhabad-Rohanpur(BD) and (iii) Petrapole ( India) – Benapole( BD). Wagons are taken to and from the border by the engines of each side. Two metre-gauge links exist between Birol- Radhikapur and Shahbazpur-Mohishashonpur. A working agreement was signed in July 2000 to restore the Petrapole – Benapole railway link. The freight train, which was formally inaugurated in January 2001, is expected to considerably facilitate movement of cargo through Petrapole through which over 70% of India – Bangladesh trade takes place. An Agreement between the Government of India and the Government of Bangladesh for Running of Passenger Train Services between India and Bangladesh was also signed in July 2001 in Dhaka. Regular service is yet to commence.
14. Both sides have also agreed on the need to link Agartala and Akhaura by rail. Inland Water Transit & Trade [IWT&T ] Protocol
15. The IWT&T Protocol has been operational since 1972 and is renewable every two years. It permits the movement of goods and barges/vessels through the river systems of Bangladesh on eight specific routes between Kolkata and points in Assam (Dhubri, Karimganj). Talks were held in Dhaka in October, 1999 where the Protocol on Inland Water Transit and Trade between India and Bangladesh and India was renewed for two years upto October 2001. Pending the holding of the Protocol renewal talks the IWTT Protocol had been extended till 30 September 2005. Under the Protocol, Kolkata, Haldia, Pandu and Karimganj on the Indian side and Narayanganj, Sirajganj, Khulana and Mongla on the Bangladesh side have been declared as Ports of Call. However, there is no provision for multi-modal transshipment of Indian goods through Bangladesh.
Trade & Economic ties
Trade
16. Bangladesh is our largest trading partner in the region. Recent trade figures are as follows:
The recent trade figures are as follows:(In US$ Million) Year India’s exports
to Bangladesh India’s imports from Bangladesh
Trade balance Total Trade
2000-01 872.98 73.87 799.11 946.85
2001-02 1002.18 59.12 943.06 1061.30
2002-03 1176.00 62.05 1113.95 1238.24
2003-04 1740.75 77.63 1663.12 1818.38
2004-05 1586.18 54.88 1531.30 1641.06
Source: DGCIS, Kolkata.
17. Major items of export from India are: food grains (this is sporadic, dependent on floods and can be very substantial as in 1990-91 and 1998-99 (US$ 267 million and US$ 526 million respectively), cotton yarn, fabrics, made-ups, machinery, instruments, glass/glassware, ceramics and coal. Major items of import from Bangladesh are: raw jute, jamdani saris, inorganic chemicals, leather etc.
Tariff concessions to Bangladesh
18. India has been progressively reducing tariffs for Bangladesh items under the Bangkok Agreement and under SAPTA. India has extended tariff concessions to Bangladesh on more than 2000 tariff lines under SAPTA. All Quantitative Restrictions have been removed in full for SAARC country imports from 1st August 1998.
19. Bangladesh has been requesting for unilateral tariff concessions on select items of export interest to Bangladesh to help them reduce trade deficit with India. During PM’s visit to Bangladesh in 1999, he had announced India’s acceptance, in principle, of the request for duty-free access on a non-reciprocal basis for select items of export interest to Bangladesh.
20. As a gesture of goodwill, India had offered 100% tariff concessions on 16 products groups consisting of 40 tariff lines to Bangladesh during the Trade Review Talks in April 2002. Duty free access was announced for items under another 39 tariff lines during the Trade Review Talks held in March 2003. Thus India offers duty free access to Bangladesh on 79 items. These are all from the request lists forwarded by the Bangladesh side to India.
Transit and Trans-shipment
21. Transit of goods to the North-East is a long-standing need, which has been disrupted since 1965. During the visit of the Commerce Minister of Bangladesh in May 1999, it was agreed to set up a Joint Group of Experts to examine modalities for (a) the movement of goods from one point in India to another through Bangladesh by Bangladesh carriers, (b) border trade and (c) tariff concessions. Meeting of the Joint Group of Experts is yet to be held as Bangladesh has not yet confirmed the
composition of the group from their side.
Credit
22. An Agreement to extend a credit line of Rs.200 crore to Bangladesh was signed in June’99. The Bangladesh Government has allocated the amount of Rs.200 crores for import of double-decker buses by BRTC (Rs.30 crores), import of 13 BG locomotives by BD Railways (Rs.92 crores) and import of rail, sleepers, fastenings, etc. for dual gauge in Dhaka-Joydevpur section of BD Railways (Rs.78 crores). The credit line has been almost fully utilized. Currently discussions are on for extension of a $150 million dollar denominated credit line to Bangladesh. Investment
23. There are 28 Indian joint ventures in Bangladesh with equity participation equivalent to US $ 16.5923 million and 7 wholly owned subsidiaries with total equity
of US $ 0.6136 million (as on October 30, 2000). Areas covered include textile spinning, building industry, chemicals, software data processing, and automobile sector etc. The Tata Group has signed an Expression of Interest Document with Bangladesh for a proposed investment of US$ 2 billion covering a 1000 MW power station, a steel mill and a fertilizer unit. These industries would be based principally on gas but may also use some coal recently discovered at Phulbari. If it materializes,
this would be the largest ever investment in Bangladesh.
Joint Economic Commission
24. The External Affairs Minister visited Dhaka in July 2003 to attend the 6th meeting of the Joint Economic Commission between India and Bangladesh. All issues of economic and commercial interest were discussed in a comprehensive manner. Discussions were held on a possible new line of credit to be denominated in US dollars. A number of proposals in the Railway sector were discussed including those on introduction of containerised services by rail and the Sealdah-Joydevpur passenger rail link. It was agreed that the Joint Working Group at the level of Joint Secretaries of Commerce would meet in Dhaka by the middle of October 2003 to begin negotiations on a bilateral Free Trade Agreement. A decision was taken to flag off the Dhaka Agartala Bus service. Cooperation in new areas such as S&T, IT and Agriculture was also discussed. It was agreed that the Standing Committee of officials would meet once when the JEC convenes and once in between the sessions of the JEC to effectively monitor developments.
Trade Agreement
25. The Trade Agreement between India and Bangladesh was signed on 4 October 1980. The Agreement had been extended with mutual consent. On its last expiry, Bangladesh suggested that the Agreement be reviewed fully; hence its validity has been extended pending a thorough reassessment. The Trade Agreement provides for
the holding of regular trade review talks. The Bangladesh Commerce Secretary visited New Delhi on May 10-11, 2000 for Trade Review Talks. Commerce Secretary led the delegation for the Trade Review Talks in March, 2003 in New Delhi. During the second meeting of India-Bangladesh Joint Working Group on Trade held in New Delhi on March 23-24, 2004, both sides arrived at a common agreed text and agreed to sign the revised Agreement at a high level. It has been agreed during the third meeting of the Joint Working Group, held in Dhaka from 1-2 August 2005, to sign the agreement at the earliest
Regional Organisations:
26. India and Bangladesh are both founder members of SAARC and BIMST-EC. The main sectors of co-operation in BIMST-EC are trade, investment, industrial cooperation, human resources development, tourism, energy, transportation, infrastructure, technology, fisheries, agriculture and natural resources.
Sharing of Waters of Common Rivers Treaty on sharing of Ganga Waters
27. The Treaty between India and Bangladesh on sharing of the Ganga Waters at Farakka was signed on 12 December 1996. Sharing of waters of the Ganga under the
Treaty is based on an indicative formula viz., when the total available water is 70,000 cusecs or less, each side receives 50%; when the total flow is 70,000-75,000 cusecs, Bangladesh gets 35,000 with the balance for India.; when the total flow is 75,000 cusecs or more, India will take 40,000 cusecs and release the balance for Bangladesh.
28. The sharing formula is subject to the provision that during the driest part of the lean season (i.e., March 1 to May 10) India and Bangladesh will each receive a guaranteed 35,000 cusecs of water in 3 alternate 10-day periods each. There is an emergency provision for consultations in case the total amount of water available falls below 50,000 cusecs. The Treaty is valid for 30 years, with a provision for review after every five years. Either side can also call for a review after 2 years.
29. The Treaty has worked well during the lean seasons. Water sharing arrangements are due for review.
Joint Rivers Commission ( JRC)
30. During the visit of the Prime Minister to Dhaka in January 1997, it was decided to reactivate the Joint Rivers Commission (JRC) at the level of Water Resources Ministers. In July 1997, our Water Resources Minister visited Dhaka. The 34th Session
of the JRC was held in Dhaka on January 12-13, 2001. Both sides discussed, inter alia,
the issues of embankments on Common/border Rivers, sharing of the Teesta and other common rivers, improvement of flood forecasting and warning and sharing of experiences on containing arsenic contamination of the underground water. The last meeting of the JRC took place in September 2003. The next is likely to be held from 30-31 August 2005.
31. A Joint Committee of Experts (JCE) headed by Secretary Water Resources was set up in 1997, to hold discussions on sharing of waters of common rivers. Priority was accorded by the Joint River Commission to the sharing of the Teesta. Since there was a wide difference in the position of the two sides, the JCE constituted a Joint Technical Group (JTG) mandated to suggest the Terms of reference for Joint Scientific Studies and Interim sharing formula for the sharing of lean season flows. The JTG after two meetings submitted its recommendations to the JCE. At the seventh meeting of the JCE in Dhaka in September 2004, it was decided to extend the JTG to narrow down the remaining divergent technical issues. The JTG met in November 2004 and January 2005 and has submitted its Report to the JCE.
Border management and Security
32. Government of India has shared concerns on several issues related to border management cooperation with Bangladesh, including control of smuggling, illegal immigration, trafficking in women and children and insurgency. The Government of Bangladesh has assured India of its commitment not to allow the use of its territory for activities prejudicial to Indian interests.
33. There is a system of institutionalized interaction for discussion on border management through the meetings of the Home Secretaries, Joint Working Group and the Director General level talks between the Border Security Force and the Bangladesh Rifles. These have been taking place regularly. The Bangladesh Home Minister visited India in December 1999; the 8th Joint Working Group Meeting was held in Dhaka from January 22-23, 2003.
34. Director General-level talks between BSF and Bangladesh Rifles have been held regularly, the recent ones in January 2004 at Delhi, 28 April – 3 May 2004 at Dhaka and 28 September-2 October 2004 in Delhi. The latest round took place from 12-17 April 2005. The India- Bangladesh Home Secretary level talks took place in New Delhi on April 26-27, 2000. Aft r an interval of four years, the next round was held in Dhaka on 16-17 September 2004. The need to address security issues in a candid and pragmatic manner was accepted.
Revised Visa Regime
35. Visa regime between India and Bangladesh is governed by the revised travel arrangements signed in Dhaka in May 2001. These arrangements seek to facilitate grant of long term multiple entry visas to businessmen, investors, professionals, research scholars and students and for people visiting on medical grounds. India has been issuing double entry visas. Bangladesh Government has agreed to issue double entry visas since September 2004.
36. There is extensive people-to-people contact between India and Bangladesh. Our Missions in Bangladesh (Dhaka, Chittagong and Rajshahi) issue nearly 500,000 visas a year. No visa fee is charged.
37. It is estimated that well over 50,000 students from Bangladesh pursue higher studies in India; around 100 students come under various scholarship schemes. Cultural troupes from India visit Bangladesh regularly under ICCR and other auspices. The Indian High Commission has set up a Dance and Music Teaching Centre in Dhaka. India and Bangladesh signed the new Cultural Exchange Program for the year 2005-08 during the visit of EAM to Dhaka in August 2005.
August 2005

Posted in Socio Economic | 8 Comments »

INDIA – NEPAL RELATIONS

Posted by publishedforscholar on December 18, 2006

INDIA – NEPAL RELATIONS
Compiled by: Kriti (BBA-II, IMS, Bikaner)

Ties with Nepal have consistently been close and reflect the historical,
geographical, cultural and linguistic links between the two nations. The signing of
the India-Nepal Treaty of Peace and Friendship in 1950 established the framework
for the unique ties between the two countries. The treaty, which provides for
‘national’ treatment for each others’ citizens in matters of entry, movement and
business in their respective territories, is a reflection of the unique relationship.
India has enjoyed good relations with successive governments in Nepal since the
restoration of democracy in April 1990. Regular high level visits between the
countries also highlight the closeness of the relationship of the two countries. The
following visits have taken place in the last four years:
From India to Nepal
2001
Minister for Human Resources Development, Dr. Murli Manohar Joshi attended a
high level UNICEF meeting from May 22-24, 2001.
Minister of External Affairs, Shri Jaswant Singh paid a “Goodwill” visit to Nepal from
August 17-19, 2001.
Prime Minister, Shri Atal Bihari Vajpayee attended the XII SAARC Summit in
December 2001.
2002
Minister for External Affairs, Shri Yashwant Sinha, visited Nepal in August 2002 to
attend the SAARC Ministerial level meeting. The meeting was followed by India-
Nepal bilateral talks.
Minister of Agriculture & Cooperative, Shri Ajit Singh attended the 6th Cooperative
Ministers Conference (August 3-7, 2002).
2003
Chief of Army Staff, General N.C. Vij visited Nepal at the invitation of General P.J.
Thapa, COAS of Nepal from April 22-25, 2003. During the visit he was conferred
the honorary rank of General of the RNA by His Majesty the King of Nepal.
Foreign Secretary, Shri Kanwal Sibal visited Kathmandu in July 2003 to attend
SAARC standing committee meeting. The meeting was followed by India – Nepal
FS level bilateral talks.
Minister for Disinvestments, Communication and Information Technology, Shri
Arun Shourie visited Nepal on 10-11 September, 2003 to inaugurate United
Telecom Ltd., which is a joint venture between MTNL, VSNL, TCIL and Nepal
Ventures Private Ltd.; the company offers WLL telephone service.
2004
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Foreign Secretary, Shri Shashank visited Kathmandu on 22-25 February, 2004 for
FS Level bilateral talks. The Motor Vehicles Agreement was initialled during the
visit.
Minister of External Affairs, Shri K. Natwar Singh visited Kathmandu on 4-5 June,
2004. During the visit he had an audience with the King and called on the Prime
Minister, Sher Bahadur Deuba.
Minister of State for External Affairs Rao Inderjit Singh (MOS-RIS) visited Nepal on
29 Nov – 1st Dec, 2004 to attend the inaugural function of the 2nd World Buddhist
Summit held in Lumbini on 1st December 2004. Prime Minister Sher Bahadur Deuba
inaugurated the Lumbini Museum in presence of MOS-RIS.
From Nepal to India
2001
Foreign Secretary, Narayan S. Thapa visited India for the Foreign Secretaries Level
bilateral talks (January 29-February 1, 2001).
2002
Prime Minister Sher Bahadur Deuba paid an official visit to India from March 20-24,
2002.
The King paid a State visit to India from June 23-28, 2002. This was the first to a
foreign county by King Gyanendra after he became the King of Nepal in June 2001.
2003
King Gyanendra paid an official visit to India from March 19-30, 2003. Though the
visit was to attend the 50th Anniversary of the Ascension of Kanchi Mathadipath,
King visited Delhi and had meetings with PM, DPM, EAM and Defence Minister.
Minister for Information and Communication & Health, Kamal Thapa attended the
South East Asian Regional Conference of WHO on September 7-9, 2003 in New
Delhi.
Minister for Information and Communication & Health, Kamal Thapa attended the
SAARC Information Ministers’ meeting on November 11-12, 2003 and SAARC
Health Minister’s Meeting from November 14-15, 2003 in New Delhi.
Prime Minister Surya Bahadur Thapa visited India from November 23-25, 2003 for
customary consultation at the end of term of Nepal as the SAARC Chairman.
2004
Minister for Information and Communication & Health, Kamal Thapa visited India to
attend 2nd Asian IT Ministers Summit held in Hyderabad from January 12-13, 2004.
Crown Prince Paras paid an official visit to India from January 18- February 1,
2004.
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Prime Minister Sher Bahadur Deuba paid an official visit to India from Sept 8-12 ,
2004.
Chief of the Army Staff (COAS) General Pyar Jung Thapa visited India on 28-30
November. On 29/11, he participated in the passing-out ceremony of cadets of the
National Defense Academy (NDA).
2005
Minister for Foreign Affairs, Ramesh Nath Pandey visited India on 7-9 March, 2005.
Economic Cooperation between India and Nepal:
Objective: The objective of the Indian Co-operation Programme has been to
supplement the efforts of His Majesty’s Government of Nepal (HMGN) in the
development of Nepal’s economy. These efforts manifest themselves in enhanced
co-operation between the people of the two countries. The projects implemented
under the cooperation programme are mutually beneficial, encourage increased
interaction at all levels between India & Nepal and strengthen bonds of friendship.
Background: Indian assistance for the economic development of Nepal has
witnessed significant growth over the years. It extends to various sectors such as
infrastructure, water resources, education, health and sanitation, etc. When Nepal
started on the road to planned economic progress in the year 1951, India came
forward to share its experience and to cooperate with Nepal. Projects such as the
Tribhuvan Airport, and the Tribhuvan Raj Path, the first road to link Kathmandu
Valley with the outside world, were taken up, and the services of advisers were
made available in various fields. Some landmark projects of India-Nepal
cooperation are most sections of the East-West Highway, Bir Hospital, Trishuli and
Devighat irrigation projects, the General Post Office and Library at Tribhuvan
University. Apart from extending cooperation in the development of physical
infrastructure India also imparted training in key sectors of agriculture, irrigation,
civil engineering, forestry, telecommunications, etc.
In January 2002 India committed IRs.50 crores (Nepali Rupees 800 million), for
executing small projects in the health, education and community development
sectors in Nepal. To facilitate implementation of small projects an MOU was signed
between the two governments on November 7, 2003. Under the Agreement, small
projects of value not exceeding NRs.3.00 crores are considered at the request of
private individuals, organizations, NGOs and autonomous bodies linked to HMGN. A
fast track mechanism has been evolved for implementing such projects. The
implementation is through local bodies of HMGN. The areas of focus under the
scheme are Public Health, Education and Community Development. The Agreement
provides for GOI to implement projects of the value of NRs. 800 million over 2
years. The project is executed under the supervision of local bodies of HMGN.
The Economic Co-operation Programme of Government of India has proved to be
the bedrock of goodwill between two close neighbours.
Current Projects:
India-Nepal economic cooperation is progressing well and is likely to be stepped up
significantly in the coming years. Presently, more than 90 projects, big and small,
involving an outlay of IRs.800 Crores (NRs.12.8 billion) are being implemented or
are under consideration.
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Government of India Aided Projects in Nepal:
A. Big Projects
Health Sector
1. Assistance to the Salt Trading Corporation Ltd. to strengthen the Goiter
control programme in Nepal.
2. Establishment of Eye Hospital in Kapilbastu District.
3. Bir Hospital Expansion Project: A 200-bed Emergency & Trauma Centre, to
be set up adjacent to the Bir Hospital, Kathmandu.
4. B.P. Koirala Institute of Health Sciences, Dharan : Extension of GOI
technical assistance upto the year 2009.
Education Sector
1. Setting up of a Polytechnic in District Morang.
2. Establishment of a Polytechnic at Heatuda, District Makawanpur.
3. Establishment of Nepal-Bharat Maitri Vidyalaya, Pokhara.
4. Assistance to the Bhootpoorva Sainik Kalyankari Samiti, Surkhet for
establishing and running a Secondary School at Birendranagar, Surkhet.
5. Establishment of an Education and Research Centre at Pashupati Area,
Kathmandu.
Other Infrastructure Projects
1. Upgradation of Road Infrastructure in the Terai Districts of Nepal.
2. Mahendranagar-Tanakpur Link Road Project.
3. Improvement of physical infrastructure at selected border checkposts on
Indo-Nepal border.
Irrigation system
1. Development of farmer-managed deep tube-well irrigation system in the
Terai area of Eastern Development Region of Nepal
Hydro Power & Rural Electrification
1. Rural electrification of two villages Bharse, Gulmi and Katunje, Dhading,
using Solar Photovoltaic Cell Technology.
B. Small Projects
Health Section
1. Assistance to Nepal Netra Jyoti Sangh, Kathmandu, in carrying out 10,000
cataract operations through Eye Care Camps.
2. Gifting of ambulances to non-profit charitable organizations in Nepal.
Education Sector
1. Establishment of Library at the Triyuga Janata Campus, Gaighat, Udayapur.
2. Construction of School building for the Shri Durga Janata Madhyamik
Vidyalaya, Babarganj, Sarlahi.
3. Construction of building and establishment of Library at the Gauriganj
Campus, Jhapa.
4. Construction of Girls’ Hostel with Boundary wall in Panchthar Multiple
Campus, Phidim, Mechi.
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5. Construction of school buildings for the Saraswati Madhyamik Vidyalaya,
Hajaria, Sarlahi and for the Shree Panch Mahendra Janata Madhyamik
Vidyalaya, Karmaiya, Sarlahi.
6. Construction of Auditorium at the Drabya Shah Multiple Campus, Gorkha.
7. Construction of Classroom block for the Rajeshwor Nidhi High School,
Nagarain, Dhanusha.
8. Construction of Building and Boundary wall of Shree Saraswati Higher
Secondary School, Pipra Bhalohia, Rautahat.
9. Construction of School Building and Compound Wall and procurement of
necessary equipment, furniture and library books for the Shree Ramsakhi
Mohit Singh Janata Lower Secondary School, Balara, Sarlahi.
10. Construction of building of the Shree Janata Secondary School, Garahiya
Dumariya, Sarlahi.
11. Construction of classroom block with teachers rooms and library hall and
provision of furniture for the Mahendra Multiple Campus, Dharan, District
Sunsari.
12. Construction of Classroom block and upgradation of Physical Infrastructure
of the Pakali Madhyamik Vidyalaya, Pakali Bazar, Tharuhat, Sunsari.
13. Construction of School building and boundary wall of Shree Adarsh
Secondary School, Parasi, Nawalparasi.
14. Construction of the school building for the Shree Sharda Madhyamik
Vidyalaya, Khanar, Sunsari.
15. Construction of Classroom block, hostel and boundary wall of the K.S.H.S.B.
Higher Secondary School, Khajuri Mahuwa ,Dhanusha.
16. Construction of School building with boundary wall of Shree Secondary
School, Nepalganj-Dhamboji, Banke.
17. Construction of School building Science laboratory, Library, boundary wall
and provision of furniture of the Tribhuvan Higher Secondary School,
Belatari, Nawalparasi.
18. Construction of school building and provision of furniture of the Shree
Pragati Secondary School, Swati, Nawalparasi.
19. Construction of Girl’s hostel with dining hall, boundary wall and provision of
furniture of the Shree Mahendra Bindeshwari Multiple Campus, Rajbiraj,
Saptari.
20. Construction of school building with compound wall at Ratauli, Mahottari.
21. Construction of school building hostel and provision of furniture, computer
and books for library of Shree Janahit Secondary School, Jomsom, District
Mustang.
22. Construction of school building, hostel, Monks quarters, teachers’ quarters
and provision of furniture for Shree Mahakaruna Sakyapa Vidyalaya,
Lomanthang-8, Chhoedhe Gonpa, Upper Mustang, Distt. Mustang.
23. Construction of school building and other related infrastructure for the
Shree Janata Primary School, Belhi, Chapena (VDC), Saptari.
24. Construction of building of the Pashupati Shiksha Mandir, Ranitalaw,
Nepalganj, Banke.
25. Construction of building of Janakpur Nursing Campus, Janakpurdham.
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26. Construction of school building development of play ground and lawn,
drainage system & provision of furniture for Shree Sankat Mochan Dev
Sharan Ramrati Secondary School, Janakpurdham, Dhanusha.
27. Construction of first floor of the building of Shree Mahendra Library,
Nepalganj-10, Banke.
28. Gifting of Buses to Schools/Colleges
Hydro Power & Rural Electrification Sector
1. Electrification of four VDCs in Sarlahi District from NEA grid.
Other Infrastructure Projects
1. Construction of a gravel road in (Gandhi Manmohan Marg) in Morang
District.
2. Drinking Water Project in Triyuga Municipality of Udayapur District.
3. Rehabilitation of Kunauli-Fatehpur Road in Rajbiraj.
4. Lumbini Museum Project.
5. Museum, Library-cum-Documentation Centre at the Institute of Forestry
Hetauda.
6. Project for improvement of Storm Water Drainage for Lazimpat-
Samakhushi-Ranibari areas of Kathmandu Metropolitan City.
7. Setting up of Digital Time Data Service (Teleclock Service) via telephone
network in Nepal.
C. Others
1. Welfare Schemes for Ex-Servicemen
(a) Medicine Pack Schemes (MPS).
(b) Drinking Water Project (DWP)
2. Science and Technology related projects:
(a) Setting up of the INSAT Receiving Station at the Department of
Hydrology and Meteorology (DHM) in Kathmandu.
(b) Visit of experts to India to study technology transfer issues and rural
employment
Commercial and Economic Relations:
India is Nepal’s largest trade partner and source of foreign investment. India is
also the major transit providing country for Nepal.
Trends in trade and investment:
Bilateral trade was US $ 1.33 billion in Nepalese fiscal year 2002-03 (fiscal year
begins on July 16). Nepal’s import from India amounted to US $ 971 million and
exports to India aggregated US $ 362 million. Nepal had a trade deficit of US $
609 million with India. In the Nepalese fiscal year 2003-04, Nepal’s total trade
with India was about US $ 1.52 billion Nepal’s exports to India were about US $
425 million and imports from India were about US $ 1.1 billion.
In fiscal 2003-04, Nepal’s exports to India increased by about 18% against a
decline of 8.6% in its exports to rest of the world; its imports from India grew at
15% against a slower growth of 7.6% from rest of the world. Nepal’s external
9
trade continues to be driven by growth in trade with India in fiscal 2004-05. In the
first six months of the current fiscal year (till 15 January 2005), year-on-year
growth in Nepal’s exports to India was 24% and 12.6% in imports from India. On
the other hand, there was a decline of 19% in exports to, and of 13% in imports
from, rest of the world.
There has been strong growth in bilateral trade since the revised Trade Treaty was
signed in 1996. Since the revision of India-Nepal trade treaty in 1996, Nepal’s
exports to India have grown over 5 times and total bilateral trade has grown over
3 times. Over 85% of increase in Nepal’s total exports worldwide, and about 90%
of total imports, since 1996 has been on account of India.
This period has also seen an increase in India’s share in Nepal’s foreign trade.
During the early 1970s, India absorbed almost all of Nepal’s exports and accounted
for nearly 90% of Nepal’s imports. However, India’s share in Nepal’s foreign trade
drop below 30% by mid-1990s. Since the 1996 Treaty, India’s share in Nepal’s
export has grown from 18.5% in 1995-96 to 65%% by January 2005. India’s
share in Nepal’s imports has also reached nearly 63% by January 2005, from 32.8
% in 1995-96. Today, India accounts for nearly two-third of Nepal’s foreign
trade.
Nepal’s main imports from India are petroleum products (26%), motor vehicles
and spare parts (7%), medicines (6%), cotton textiles (4.5%), machinery and
spares (4.5%), cement, and chemicals. Nepal’s export basket to India mainly
comprises vanaspati (14.1%), and range of other semi-processed and processed
food products. Other major exports include toiletries, twines, pulses, sacks,
polyester yarn, cardamoms, readymade garments, etc. Steel strips and sheets,
processed from raw material imported from India, are also emerging as major
exports from Nepal to India.
Indian firms are the biggest investors in Nepal, accounting for 35% of total
approved foreign direct investment of IR 14.5 billion (a little over US $ 300 million)
and also for 35% of 792 operating ventures with foreign investment. The United
States is the second largest investor with 17% share in cumulative investments
and China is third with 11% share.
Indian ventures in Nepal are found in manufacturing, services (banking and
insurance) and tourism industries. Some large Indian investors include Dabur, ITC
(for cigarettes), Hindustan Lever, SBI, PNB, LIC, Oriental Insurance, Asian Paints,
Colgate-Palmolive, etc. In September 2003, a consortium of VSNL, TCIL and
MTNL, together with a Nepali partner, became the first private sector player in the
telecommunication sector in Nepal. The Indian partners have 80% share in the
venture and offer basic telephony service through WLL technology.
Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s
exports to India. Dabur Nepal and Arti Strips, for example, each account for about
10% of Nepal’s exports to India, or about 6% each of Nepal’s global exports. Many
Indian joint ventures were established in Nepal principally to cater to the Indian
market.
Nepal’s transit trade is routed through the port of Kolkatta/Haldia and fifteen
designated transit routes between Kolkatta and India-Nepal border. In addition,
Nepalese trade traffic to Bangladesh also transits through India.
10
Bilateral Framework:
The bilateral framework for trade and transit is provided by the India-Nepal
Treaties of Trade, of Transit, and Agreement for Co-operation to Control
Unauthorised Trade 1991. The Trade Treaty valid for five years was renewed
through an exchange of letters on December 3, 1996 and March 5, 2002. The
current arrangement is valid until March 2007. Under the Treaty of Trade, India
provides, on a non-reciprocal basis, duty free access, without quantitative
restrictions, to the Indian market for all Nepalese-manufactured articles barring a
short negative list (cigarettes, alcohol and cosmetics), subject to the conditions,
since March 2002, that the exports meet the domestic value addition requirement
of 30% and change in HS classification at the four-digit level in the course of
manufacture or processing in Nepal. After the March 2002 revision, annual quotas
have been prescribed for duty-free exports to India for four sensitive items -
vegetable fats (100,000 tonnes) acrylic yarn (10,000 tonnes), copper products
(10,000 tonnes) and zinc oxide (2,500 tonnes).
Bilateral trade takes place generally in Indian rupees, but Nepal’s central bank
maintains a list of items that can be imported from India in dollars. Currently,
there are 41 items on the list. Indian rupee is legal tender in Nepal and is freely
convertible. The exchange rate has been maintained at NRs. 1.6 per Indian rupee.
India and Nepal have also negotiated a bilateral cooperation agreement on
standards between Bureau of Indian Standards and Nepal Bureau of Standards
and Meteorology.
The India-Nepal Treaty of Transit, renewed every seven years, provides for port
facilities to Nepal at Kolkatta and specifies 15 transit routes between Kolkatta and
the India-Nepal border. As requested by the Nepalese side, a separate Customs
Cell at Haldia has become operational from 16 August 2004. For bilateral trade, 22
entry/exit points are provided along the Indo- Nepal border. The Transit Treaty
was renewed in January 1999. The renewed Treaty contains liberalised procedures
for the transit of Nepalese goods. The Agreement for Cooperation between
India and Nepal to Control Unauthorised Trade was renewed for five years
with effect from 6.3.2002.
The two governments are negotiating a Bilateral Investment Protection and
Promotion Agreement. The two countries already have a double taxation
avoidance agreement since 1987.
India and Nepal signed a Rail Services Agreement in May 2004, to extend cargo
train service to the Inland Container Depot (ICD) at Birgunj in Nepal. ICD has been
constructed with World Bank Assistance of US$ 17 million, while India has
constructed the rail tracks which link the ICD with the Raxaul railway station in
India. The ICD became operational on 16 July 2004. A Container Corporation of
India-led joint venture in Nepal has won the contract to operate the ICD.
A Motor Vehicles Agreement for passenger vehicles, initialled on 23 February
2004 awaits formal signature. The agreement envisages bus services between
India and Nepal on 14 routes through 5 border points on reciprocal basis. 53
buses will operate under this agreement everyday. Individuals travelling to either
country in their personal vehicles would also be able to cross over into the other
country without payment of any charge for the first five days.
11
In accordance with the provisions of the bilateral Air Services Agreement signed
in 1997, in addition to Indian Airlines and Royal Nepal Airlines, private airlines from
the two countries have recently been designated to provide air services between
the two countries. Jet Airways and Air Sahara from the Indian side and Cosmic Air
from the Nepalese side also operate air services between the two countries.
Government of India is committed to improving cross-border trade related
infrastructure. These include upgrading the four major custom checkpoints at
Birgunj-Raxaul, Biratnagar-Jogbani, Bhairahawa-Sunauli and Nepalgunj-Rupediya
to international standards; building an oil pipeline between Raxaul and
Amlekhgunj, through a joint venture between Indian Oil Corporation and Nepal Oil
Corporation; upgrading approach highways to the border on the Indian side;
upgrading and expanding a road network on the Nepalese side; and, broad gauging
and extending rail links to Nepal.
An Inter-Governmental Committee on Trade, headed by Commerce Secretaries,
meets every year to consider policy, regulatory and infrastructure issues in India-
Nepal trade.
India – Nepal Co-operation in Water Resources:
Nepal’s rivers flow into India and constitute an important part of the Ganges River
System. They are a major source of irrigation in the Gangetic plains but also of
devastating floods in north Bihar and Uttar Pradesh. Nepal’s enormous hydropower
potential, estimated at 83,000 MW, of which 44,000 MW is considered economically
feasible, could meet India’s rising demand for power and, in the process, transform
Nepal’s economy. Nepal today has less than 600 MW of installed hydropower
capacity.
Bilateral cooperation is aimed at deriving mutual benefits in the areas of irrigation,
flood control and power generation. However, after a promising start with the Kosi
and Gandak projects between independent India and Nepal, there has been little
progress in bilateral cooperation for harnessing the rivers for hydropower and
irrigation. Although Indian assistance helped create about 20% of Nepal’s irrigation
potential and over 10% of its installed hydropower capacity (through 3 small
projects, besides power from Kosi and Gandak), the transformational potential of
bilateral cooperation has remained unrealised.
Cooperation for flood control and management has also made modest progress. In
addition, the two governments engage on issues relating to cross-border
inundation problems that result from creation of local-level assets in border
regions, such as embankments, diversion schemes, etc.
Institutional structure for cooperation:
The two sides also have wide-ranging dialogue architecture for technical
discussions. The Joint Committee on Water Resources (JCWR), chaired by Water
Resources Secretaries on the two sides, is the apex body for discussing all issues
relating to cooperation in water resources. The two sides also have a Standing
Committee on Inundation Problem (SCIP), a short-term High Level Consultation
Committee (HLTC) for two specific inundation problems, a Standing Committee on
Embankment Construction (SCEC), Standing Committee on Flood Forecasting
(CFF), Committee on Flood Management and Control and a Joint Group of Experts
for Pancheshwar, a Joint Team of Experts on Sapta Kosi-Sun Kosi Project, a Power
Exchange Committee, and a Joint Committee on Kosi and Gandak Projects. The
JCWR, set up as prime ministerial initiative of the two countries in March 2000, had
12
its first meeting in October 2000 and the second one in October 2004. Other
forums have met at regular intervals.
Major Multipurpose Projects:
There are currently two major multipurpose projects (encompassing power,
irrigation and flood control) on the agenda of the two countries.
(i) Pancheshwar Multipurpose Project: The 1996 Mahakali Treaty between India
and Nepal provides for the implementation of the Pancheshwar Multipurpose
Project. The project, conceived as a peaking power project, will
have 5600 MW of installed capacity and create irrigation potential for
130,000 hectares in Nepal and 240,000 hectares in India. The Detailed
Project Report (DPR), to be prepared jointly by the two countries, has not
been finalised, since certain issues remain pending. The two countries are
pursuing their dialogue through the Joint Group of Experts on Pancheshwar.
(ii) Sapta Kosi-Sun Kosi Multipurpose Project: The project, located in Nepal,
involves a high storage dam on Kosi River; 3000 MW power plant; a
barrage downstream to feed irrigation canals in Nepal and India; a
diversion structure on Sun Kosi River to channelise water through a tunnel
into Kamala River; a small dam on Kamala River with a powerhouse of 50
MW and barrage downstream for irrigation purposes. The project is
designed to provide flood control, power, irrigation and navigational
benefits to both countries. India and Nepal opened the Joint Project Office
for Sapta Kosi-Sun Kosi Investigations in Biratnagar on 16 August
2004 to prepare the joint DPR for the project. Government of India is
providing Rs. 29 crores as grant for the work of the JPO. This project, if
implemented, will provide flood control benefit to India, create power
capacity of 3000 MW and irrigate 1.0 million hectares in India and 0.5
million hectares in Nepal.
Hydropower generation and trading:
There is considerable scope for mutually beneficial cooperation between India and
Nepal in developing small and medium sized hydropower projects in Nepal for
internal use in Nepal or exports to India. Nepal’s hydropower development policy
permits private and foreign investment in generation of hydropower, including for
exports. The Governments of India and Nepal have entered into discussion
regarding two medium sized projects in Nepal: Upper Karnali Hydel Project (300
MW), which is a run-of-the-river project; and Budhi Gandaki Project (600 MW)
which is a storage project.
In what constitutes a significant new development in our policy on bilateral
cooperation with Nepal on water resources, Power Trading Corporation has
signed a Power Purchase Agreement with an Australian company (Snowy
Mountain Engineering Corporation), which is developing a 750 MW West Seti
Hydro Power Project in Nepal. Nepal has several other small and medium sized
project proposals that can be developed by the private sector, including companies
in India. The PTC-SMEC agreement has kindled hope in Nepal of private sector-led
generation and transmission of power for the Indian market.
A Power Trade Agreement was signed in the presence of the two Prime Ministers
in June 1997. This Agreement was to promote private sector participation in the
field of power infrastructure. In addition, power exchange takes place in areas
contiguous to the border between the two countries on the basis of decisions taken
13
by the Power Exchange Committee. Currently, 150 MW of power is exchanged
between the two countries, with Nepal being a net importer of power. Under the
Mahakali Treaty, India also supplies 70 million KW of power annually free of charge
to Nepal.
Flood Forecasting and Control:
There are ongoing discussions between India and Nepal in respect of flood
forecasting and prevention. The two sides are cooperating since 1989 on flood
forecasting and warning through data collection and transmission from 42 sites
along rivers in Nepal. Government of India has provided equipment to Nepal to
collect hydrological and meteorological data from a number of sites in Nepal for the
purpose of flood forecasting. The bilateral Committee on Flood Forecasting, set
up during the October 2000 JCWR meeting, prepared a Comprehensive Flood
Forecasting Master Plan (CFFMP), which was adopted by the JCWR in October
2004. The Committee has now been entrusted with the task of implementing the
plan. Key features of the revised plan includes expansion of the number of stations
from 42 to 47, upgrading and modernisation of five key sites and real time data
transmission from key sites in Nepal.
In October 2004, the JCWR also established a Joint Committee to prepare a longterm
and comprehensive plan on flood management and control. Given the
severity of floods in Nepal and Bihar in recent years, the Joint Committee’s
immediate focus is to identify short-term measures for flood management and
control.
To control floods in north Bihar and adjoining Nepalese territory from four rivers –
Lalbakeya, Bagmati, Kamala and Khando – Government of India has sponsored a
scheme of raising, strengthening and extending the embankments along these
rivers in Bihar and is also providing assistance for constructing embankments along
certain stretches of these rivers in Nepal. Pursued through the Sub Committee
on Embankment Construction (SCEC), the project has been completed on
Lalbakeya river (IRs 2.6 crores), is in progress on Bagmati River ( planned outlay
IRs. 14 crores) and is being planned for the Kamala and Khando rivers.
Cooperation in the Defence sector:
The Indian Army and the Royal Nepalese Army (RNA) share a close relationship.
The Chief of Army Staff of the Indian Army is given the honorary rank of a General
in the RNA and vice versa. Regular high-level exchanges take place between the
two Armies. India has been helping the RNA in its Modernisation Programme by
way of supply of equipment and training. The Gorkha regiment of the Indian Army
is raised partly from recruitments from Nepal. Pensions to over 115,000 Gorkha
soldiers who have retired after serving in the Indian Army are distributed in Nepal.
There are over a dozen District Soldier Boards in Nepal which arrange the
disbursement of pensions and also take up welfare programmes for retraining,
rehabilitating and assisting the ex-Gorkha soldiers and their families. Many Welfare
programmes are also undertaken for the retraining and rehabilitation of the retired
Gorkha soldiers and their families by the Indian Army.
Co-operation in Culture:
The India-Nepal B.P. Koirala Foundation was set up in 1991, with the specific
purpose of fostering educational, cultural, scientific and technical cooperation
between India and Nepal and to promote mutual understanding and cooperation
through a process of wide sharing of knowledge and professional talents in both
14
academic pursuits and technical specialisation. The Foundation has organised many
events since its formation, both in India and Nepal, in the cultural field.
An Agreement on Cooperation in the Fields of Culture and Sports was concluded
during the visit of PM Sher Bahadur Deuba in September 2004.
India-Nepal Co-operation in Human Resources Development:
India’s contribution to the development of human resources in Nepal has, over the
years, been one of the major facets of Indo-Nepal cooperation. Around 140
scholarships / seats are provided every year by Government of India through the
Embassy of India, Kathmandu to Nepalese nationals for undergoing various courses
at the Ph.D, Masters and Bachelors level in India. These scholarships / seats are
provided for a wide spectrum of studies ranging from engineering, medicine,
agriculture, pharmacology, veterinary sciences, computer application, business
administration, music and fine arts. In addition, with the aim of providing
comprehensive and integrated training to in-service candidates of HMGN / Public
Sector nominees of HMGN, 50 seats are allotted to Nepal under the Technical
Cooperation Scheme (TCS) of the Colombo Plan and 30 seats under the Indian
Technical and Economic Cooperation (ITEC).
Government of India has initiated a number of new scholarships in the last few
years. The Golden Jubilee Scholarship Scheme was implemented for the first time
in 2002-03 under which 50 scholarships are awarded to Nepalese students
undergoing MBBS / BDS, BE/B.Tech and other undergraduate courses in Nepal.
Under the Mahatma Gandhi Scholarship Scheme initiated in 2003-04, 500
scholarships are being provided every year to students of class XI and XII studying
in Nepal. The Dr. Homi J. Bhaba Scholarship Scheme launched in 2004-05,
provides five scholarships for post-graduate studies in Engineering.
July 2005

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INDIA-PAKISTAN RELATIONS

Posted by publishedforscholar on December 18, 2006

INDIA-PAKISTAN RELATIONS
Compiled by: Kriti (BBA-II, IMS, Bikaner)

Bilateral Political Relations
India desires peaceful, friendly and cooperative relations with Pakistan as
envisaged in the Simla Agreement of 1972 which forms the bedrock of bilateral relations
between the two countries. In this spirit India has undertaken several initiatives with
Pakistan over the years to place bilateral relations on a harmonious and cooperative
footing and thereby transcend the distrust and conflict which has plagued the bilateral
relationship since 1947.
Some of the important Agreements reached between the two countries in recent
years are as follows:
(i) Simla Agreement (July 2, 1972)
(ii) Lahore Declaration (February 21, 1999)
(iii) Joint Press Statement (Islamabad, January 6, 2004)
(iv) Joint Press Statement (February 18, 2004)
(v) Joint Statement (New Delhi, September 8, 2004)
(vi) Joint Press Statement (New York, September 24, 2004)
(vii) Joint Statement (Islamabad, December 28, 2004)
(viii) Joint Statement (New Delhi, April 18, 2005)
A new phase to relations between India and Pakistan was initiated in January 2004
when Prime Minister Vajpayee visited Pakistan for the Islamabad SAARC Summit. The
January 6 Joint Statement emerged following his meeting with President Musharraf
contains a clear commitment by Pakistan that no territory under its control would be
used to support terrorism in any manner. Both sides also agreed to resume a Composite
Dialogue process. Under this process both sides have agreed to discuss ‘Peace and
Security including Confidence Building Measures’ and ‘Jammu and Kashmir’ and also
Siachen, Sir Creek, Wullar Barrage/Tulbul Navigation project, Promotion of Friendly
Exchanges in Various Fields, Economic and Commercial Cooperation and Terrorism and
Drug trafficking.
Over the past year, the Dialogue Process has been strengthened by bilateral
meetings at various levels by wide ranging people to people contacts. President General
Musharraf visited India in April 2005 and had a landmark meeting with Prime Minister
Dr. Manmohan Singh. The two leaders declared the peace process to be irreversible
following this meeting.
There has been significant progress in bilateral relations since the beginning of the
Composite Dialogue. Both countries have agreed and implemented various Confidence
Building Measures in areas of security, trade, culture and people to people exchanges. At
the same time, India continues to have serious concerns on terrorist infrastructure in
Pakistan targeting India operating within Pakistan.
Bilateral Trade Relations
In accordance with the Simla Agreement, a Protocol for Trade was signed on
November 30, 1974. This Protocol expired in 1978. Trade has thereafter continued
without any formal trade agreement. India granted MFN status to Pakistan in 1995-96
and has consequently no list of permitted or prohibited products. Pakistan has not
extended MFN status to India. It maintains a list of goods (768 items) that may be
legally imported from India.
Pakistan’s largest exports to India remain fruits and nuts, pulses, spices, textile,
cotton yarn fabrics, crude minerals, made-up articles, dyeing and spun yarn and row
6
wool while India’s major exports to Pakistan are sugar, pharmaceuticals, rubber
manufactured goods except footwear, coal tar chemicals, inorganic organic and agro
chemicals, iron ore, paints, plastic and linoleum products and spices and tea.
Trade flows in the past four years is as follows:
Pakistan’s Exports to India and % of Pak Global Trade
Year Exports
US $ million
2001-02 49.2 (0.53%)
2002-03 70.7 (0.63%)
2003-04 93.7 (0.76%)
2004-05 (Feb) 149.361 (1.69%)
Pakistan’s Imports from India and % of Pak Global Trade
Year Exports
US $ million
2001-02 186.5 (1.8%)
2002-03 166.05 (1.35%)
2003-04 382.4 (2.45%)
2004-05 (Feb) 297.20 (2.4%)
Financial Year (July-June) [Source: Ministry of Commerce, Govt. of Pakistan]
The overall climate for industry and business has improved significantly since January
2004. Several business delegations from both countries have visited the other country
to explore opportunities for trade, joint ventures and transfer of technology.
Some of the important business delegations, which visited Pakistan from India in the
past 12 months, are: PHD Chamber of Commerce and Industry, CII CEOs delegation,
NASSCOM, Indian Tea Association, Synthetic and Rayon Textiles Export Promotion
Council, Research and Information System for Non-aligned and other developing
countries and ASSOCHAM. In addition, representatives of major industrial houses, Tata
Sons, Bajaj, ESSAR Group, Munjals, Ashok Leyland, IOC, Apollo, Dr. Reddy’s Laboratory,
Eicher, Jayco, Praj Industries are at various stages of negotiations with Pakistani
counterparts in individual areas of interest. Almost all business chambers of Pakistan
have sent their delegations for visit to India.
August 2005

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