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India, Nepal Keen to Develop Hydel Potential

New Delhi, November 07, 2006

On the auspicious occasion of presence of Deputy Prime Minister and Minister of Foreign Affairs of Nepal Mr. K P Sharma Oli, India and Nepal have expressed their eagerness to cooperate in the development of Nepal’s hydro-electric potential.

Laying major thrust on Hydro-power, both are looking forward to partnerships especially in developing water resources, infrastructure, roads, power and agri-business sectors.

Nepal hopes to boost its annual trade to US$5 billion in five years from $2 billion now. Its geographical proximity to two of Asia’s largest nations, India and China, the good relations with both, the free trade agreements such as SAFTA that Nepal is a signatory to, and rich natural resources are other factors that make the country an attractive investment destination. There has been a 40 percent jump in investments from India into Nepal.

Underlining the importance of hydro-power development, Ambassador of India to Nepal Mr. Shivashankar Mukherjee said there was great interest by several Indian companies to enter this sector in Nepal at the Bilateral Power Summit held in Kathmandu in September 2006. The two countries will also be shortly setting up cross-border transmission highways that will spur a new trade in power.

The renewal of the Indo-Nepal trade treaty in March 2007 will address non-tariff and para-tariff barriers to imports from Nepal, services, manufacturing, education, health, tourism and IT and ITES. Since the agreement was signed in 1996, bilateral trade has grown to $2 billion and 40 percent of the tourists who visit Nepal by air come from India.

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