By Sudeshna Sarkar
Kathmandu, Nov 29 (IANS) The Indian government and the Confederation of Indian Industry (CII) are pushing for a quick inking of a Bilateral Investment Protection Agreement (BIPA) with Nepal, whose trade with India accounts for 60 percent of external trade and where 45 percent of the foreign investment comes from India.
A visiting CII delegation that wound up its three-day visit to Nepal Monday has met the commerce and industry ministers to press for a quick signing of the agreement that, it said, will encourage further Indian investment in Nepal and help correct the ballooning trade deficit.
The BIPA text has already been drafted and been approved by India. It was tabled in Nepal's cabinet recently and forwarded to the parliamentary sub-committee on finance and infrastructure.
Initially to prevail for 10 years, the agreement will ensure the protection of investment in case of nationalisation of industries and provide equal treatment to each other's investors.
Though Nepal already has a BIPA with fellow SAARC members Sri Lanka and Bangladesh, it is however yet to sign the pact with its largest trade partner India.
Traders from both countries are also seeking a quick signing of a revised Double Taxation Avoidance Agreement. The initial agreement was signed in 1987.
While the text for the revised agreement has been drawn up, India has suggested some changes in the draft.
"No matter what the political situation is, businessmen will always be interested in business opportunities," said Sushanta Sen, CII's principal adviser, Special Projects and South Asia.
"Even in Naxalite strongholds in (India's) Chhattigarh state, companies like Tata and Essar are setting up steel factories."
CII is asking Nepal's federation of chambers of commerce and industry to explore Patna and Chennai for joint venture and cooperation and a Nepali delegation will attend the CII Partnership Summit in Jaipur in January to explore new business opportunities.
While ensuring its support to the Nepali government and entrepreneurs, CII has also taken up cudgels on behalf of Indian ventures that have been going through troubled times in Nepal.
The cases of Dabur Nepal and the Manipal College of Medical Sciences were brought up specifically at the CII delegation's meetings with Nepal's ministers and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
"Indian joint ventures in Nepal are Nepal's best ambassadors in India," Sen said.
"While we favour an independent media, the smear campaign against some Indian companies was unprecedented. If there is a false media campaign, the government must intervene at some time."
The concern came after a recent smear campaign that principally targeted Dabur Nepal's Real brand of fruit juices after the company stopped advertising with an influential media organisation in Nepal.
The CII delegation has also urged Nepal to fulfil its commitments to Indian investors.
India's Manipal Group set up the Manipal College of Medical Science, Nepal's first private medical school, in 1994 in collaboration with the government of Nepal.
However, even 16 years later, it is to be allotted the 24 acre promised by the government for expansion.
Its planned additional ventures in Janakpur and Jaleshwor towns in southern Nepal have been put on hold due to the growing insecurity and since the last three years, the Western Regional Hospital, to which it was affiliated, has withdrawn the affiliation demanding five percent of tuition fees.