India extends Transit Treaty by three months

New Delhi, Jan 6-The Indian government has agreed to extend the Indo-Nepal Transit Treaty by three months without any revision.The two-day meeting between the government officials of the two countries, which lasted for almost 20 hours, failed to reach any agreement and the Indian officials extended the treaty by just three months, although there is a provision in the treaty that it should be renewed for a period of seven years.India on Wednesday urged Nepal to restrict the movement of sensitive goods only to key transit points, as officials from the two neighbours began fresh negotiations here to give a new lease of life to the seven-year-old Nepal-India Transit Treaty.

The meeting concluded after the Indian officials informed their Nepali counterparts that their decision has been conveyed to the secretary of the Ministry of Industry, Commerce and Supplies, Bharat Bahadur Thapa.

The two sides are focusing on the five-point agenda, and chiefly "rationalization" of the 15 transit points; movement of sensitive goods such as chemical fertilizer, sugar; via-Nepal access to Indian goods to other Indian territory; and railway modalities including the use of just-opened Inland Container Depot at Raxaul, the nearest broad gauze railway link for Nepal.

Last signed on Jan 5, 1999, the treaty -- a break-up of the Nepal-India Trade and Transit Treaty of 1951 - is up for automatic renewal after it officially expires on coming Thursday. The first bilateral exercise to renew the treaty, which started in Kathmandu last month, had failed to make headway after India proposed to review and "rationalize" the 15 transit routes that landlocked Nepal currently uses for trade and business with the outside world.

The meeting concluded after the Indian officials informed their Nepali counterparts that their decision has been conveyed to the secretary of the Ministry of Industry, Commerce and Supplies, Bharat Bahadur Thapa.

According to a Nepali official who attended the meeting, Indian officials sent a Letter of Exchange stating the period of extension of the treaty to the industry secretary through the Indian Embassy in Kathmandu. They will hold a meeting again in three months, he added.
According to sources in New Delhi, the future of the treaty is under cloud due to political developments in Nepal. According to sources, even during the three-month period, India will adopt ‘wait and see’ strategy before renewing the treaty.Although the Indian side proposed to review the transit points, the meeting came to an end without informing the Nepali side which transit points needed reconsideration, the official said.They also raised the issue of bank guarantee, cargo and customs liabilities but no agreements were made in this regard, he added. The Indian side also maintained that they needed to classify the sensitive goods and materials and their entry through all the transit points now in use was not possible. However, the Nepali side responded positively to the Indian proposal to include the railway agreement in the Transit Treaty.