Hydropower increases India-Nepal trade

Hydropower helped push bilateral trade between India and Nepal bilateral up to 38% from US$ 1985 million in 2009-10 to US$ 2700 in 2010-11.

India's Union Minister of Commerce, Industry and Textiles, Shri Anand Sharma, in a recent meeting with his Nepalese counterpart, singled out the hydro power sector for increased cooperation between the two countries.

The Indian minister further said that the estimated sale of electricity from Nepal's 40,000 MW hydropower potential can generate revenues of more than US$10 billion per annum. Nepal has immense potential to attract foreign investment in both manufacturing and services by using its hydropower potential to overcome the present power shortage.

He also informed the Nepalese commerce minister that the Indian Government has accepted the Nepalese request for the use of Vishakhapatnam port and rail route through Singhabad (India) --- Rohanpur (Bangladesh). Approval of the Nepalese government for the Letter of Exchange (LOE) sent in this regard is now awaited. Also, Nepal’s request for further facilitation of Nepal-Bangladesh trade via the Kakarbhitta-Phulbari-Banglabandha route has also been agreed to.

Since Indian firms are the biggest investors in Nepal, accounting for around 47.5% of the total approved foreign direct investments, the Indian minister also suggested a possibility of India providing Buyers Credit to various Nepalese Government agencies for large project exports, especially in the infrastructure sector like roads, bridges, railways, power lines, sewerage plants, water treatment plants and housing from India.

The credit can hence be provided under the National Export Insurance Account through EXIM Bank for a maximum period of 5 -8 years.