Nepal's finance minister, Dr. Yubaraj Khatiwada has said that the ban on import of palm oil has been a sign of worry for his country and Kathmandu has taken up the issue with Delhi. Speaking to our diplomatic correspondent Sidhant Sibal in Kathmandu, the minister lauded India's support to Nepal but also expressed concern over large Indian currency notes. Excerpts:
Question: How do you see the relationship between India and Nepal in terms of finance and trade?
Khatiwada: We have a lot of interdependence on each other. Nepal's two-third trade is from India and it is our largest investment partner as well. Indian ports are our access to the world, and we have been working very closely with the country. When the Indian economy performs well, we have trickle-down benefits in several areas, including investment opportunities. We would like to see our neighbour prosper so that we can benefit from it as well and expect that India also supports Nepal to prosper. There should be a common goal to prosper.
Question: What kind of support would you like to see from New Delhi for your development needs?
Khatiwada: It's a long menu. First is infrastructure connectivity. We are talking about better road connections, waterways, and electricity transmission lines. They are happening, thanks to the government of India for supporting Nepal in providing better connectivity which includes an optical fibre that we have set up using India's support. The second will be a review of trade relations. Nepal, being a small economy, would like to get assistance in terms of non-reciprocal treatment for some of our produces. Several times we may not able to compete in the market place. Our products are very small and would like to see non-reciprocity in trade relations. Another area is trade facilitation, thanks to India for ICP. Exim bank is doing a lot of work in terms of leveraging our financial requirements.
Question: Demonetisation impacted you. Are the worries associated with it over?
Khatiwada: 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, and large denomination currency notes which 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 to a futuristic way so that any kind of problem that was created in the past is not repeated. Nepal is not comfortable to carry the notes due to the fear that they will not be accepted back to India. We just want to see that currency management takes a smoother path.
Question: Import of palm oil by India is another thing your country has been very vocal about.
Khatiwada: Actually, under SAFTA, we have value-add requirement for exports. Our palm oil exports have a value-add for more than 30% which is the minimum requirement and second is our companies were established long back, 20-30 years ago 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 the Indian authorities through diplomatic channels and convince them that it should be resumed so that our industry doesn't suffer.
Question: Do you think SAARC's common market is dead?
Khatiwada: Not yet. We have been talking about SAARC intra-regional trade at about 5% of region's total trade and our trade is not even half the potential we have. It's just one-third. So the markets are also complementaries. Like in tourism, India, Nepal, Pakistan, Sri Lanka, Bangladesh can have a tourist circuit for south Asia so that every country can benefit. We can have complementaries in the energy and agriculture sectors.
