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Nepal, China to sign petroleum deal to import fuel from Beijing

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Nepal China Petroleum Deal

Kathmandu: In a significant departure, Nepal and China have agreed to sign a long-term petroleum deal to import fuel from Beijing. With this, Nepal will end the Indian monopoly over fuel imports.

The foreign ministers of Nepal and China have directed the concerned authorities to seal the deal at the earliest, officials said.

This followed a meeting between Deputy Prime Minister and Minister for Foreign Affairs Kamal Thapa and his Chinese counterpart Wang Yi in Beijing on Friday.

For exploring the possibilities of importing fuel on an urgent basis, a two-member team from the ministry of commerce and supplies and the Nepali Oil Corp has reached Beijing.

Thapa is the senior most Nepali official to visit China after Kathmandu came out with a new constitution, protests against which have virtually sealed the India-Nepal border creating major shortages in Nepal.

“By overcoming the harsh geographical and environmental conditions, for the first time, we have agreed to supply fuel to Nepal that it urgently needs. Foreign Minister Thapa and I had very in-depth talks and reached a broad consensus,” Yang said at a joint press meet in Beijing with Thapa.

Thapa said: “I am very happy to note that China has instructed the petroleum export authority to be in touch and discuss issues related with the long-term trade of petroleum products with Nepal.”

A press statement issued after the meeting by the foreign affairs ministry stated that China had expressed a desire to seriously examine Nepal’s proposals to import petroleum products from Beijing.

The two countries will jointly examine matters relating to price, transportation, and logistics. As a friendly gesture, China will provide additional fuel to Nepal’s northern areas bordering Tibet.

Nepal and China also agreed to upgrade and operationalize the existing border points and develop the other border points to promote connectivity between the two countries.

China has agreed to give priority to the reopening of the Tatopani-Zhangmu border point, which had been disrupted after the April earthquake that killed thousands in Nepal.

The intergovernmental mechanisms have been tasked to advance negotiations on the proposals on a free trade area, transit and Bilateral Investment Protection and Promotion Agreement (BIPPA).

Thapa and Wang also discussed a transit treaty between the two countries.

Thapa said the treaty would enable Nepalese to access travel and goods from other countries through Chinese ports.

On India-Nepal relations, Thapa said: “Immediately after the promulgation of the constitution, there has been some misunderstanding between Nepal and India.

“Because of this, India imposed unofficial obstruction on transit and supply of fuel and other essential commodities,” he said.

“That caused a severe impact on the Nepalese society. It also had a negative impact on our economic growth. But I am very happy to say at this point of time that things are moving and improving,” said Thapa. (IANS)

(Photo: kathmandupost.ekantipur.com)

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Amid Intensifying US China Trade Dispute, Indian Exporters Eye Gains

Orient Craft’s new unit in Jharkhand, one of India’s least developed states, will employ about eight thousand workers

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US, China, Trade Dispute, Indian Exporters
Orient Craft, one of India's largest apparel exporters, says it could benefit from increased business as the US-China trade war intensifies. This building in Gurgaon on the outskirts of Delhi houses its office and one of its garment units. VOA

As work on establishing a massive garment-manufacturing unit by one of India’s leading apparel exporters enters the final stages, the company is optimistic about keeping the machines humming. Slated to begin production in August, Orient Craft’s new unit in Jharkhand, one of India’s least developed states, will employ about eight thousand workers.

Inquiries from buyers in the United States, its biggest market, have increased in recent months as a trade dispute with China intensifies, according to A.K. Jain, who heads the Commercial department at Orient Craft. That is why he is upbeat about generating new business. “This is an unbelievable blessing in disguise,” he says. “It will give us an edge.”

Exporters in India are reaping the benefits of the trade war between the world’s two biggest economies as business with both countries jumps, according to Ajai Sahai, who heads the Federation of Indian Export Organizations.

“While overall exports have gone up by nine percent, exports to the U.S. have gone up by 13 percent and to China by 32 percent,” he says. And as the confrontation escalated last week after the two countries failed to reach a deal, his optimism increased. “Since the tariff hike is now substantial from 10 to 25 percent we feel we will have more advantage in market access.”

US, China, Trade Dispute, Indian Exporters
A slowdown in the Indian economy is being attributed to a drop in consumption by an affluent middle class. VOA

India is among a handful of countries set to benefit from the U.S.-China trade dispute, a report by the United Nations Conference on Trade and Development stated in February. “The saying ‘it’s good to fish in troubled waters’ could apply to some bystander nations,” the report said, pointing out that most of the Chinese exports subject to U.S. tariffs will be captured by firms in third countries.

While China has opened its doors wider to a range of agricultural products from India such as rice and sugar, exports to the United States have increased in areas such as chemicals, pharmaceuticals, jewelry, auto components and apparel.

“In various products we were losing out to China with a very narrow margin. With the hike, we are able to offset that,” says Sahai. “That is why the tariff war has presented us an opportunity to enter markets in the U.S. in some areas we were hardly penetrating.”

But even as Indian exports benefit, trade experts warn that clouds are also gathering over New Delhi’s trade relationship with Washington. In recent months, U.S. President Donald Trump has slammed Indian duties on some U.S. goods, saying that India is not providing “equitable and reasonable access” to its markets.

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Economists also warn that an eventual slowdown in global trade due to the U.S.-China trade spat will hit all countries including India, which is already staring at an economic slowdown

Growth in the world’s fastest growing major economy flagged to 6.6 percent in the last quarter of 2018 – it’s lowest in more than a year. It is not expected to fare much better this year.

The slump is blamed on slackening domestic consumption, which powers the Indian economy. Unlike East Asian countries, which have raced ahead on the back of exports, growth momentum in India is largely based on an affluent middle class snapping up goods such as cars, refrigerators, air conditioners and other consumer goods.

But there are concerns as automobile sales, the barometer of consumption, plunged to the lowest in nearly eight years in recent months.

US, China, Trade Dispute, Indian Exporters
Like other carmakers, the Hyundai showroom in Gurgaon has witnessed a decline in sales of cars in recent months. VOA

At the Hyundai car showroom in the upscale business hub of Gurgaon, near Delhi, a range of swanky models beckon customers, but there are few to be seen. This is in marked contrast to the last three years when buoyant automobile sales helped India overtake Germany to become the world’s fourth largest automobile market. That prompted car makers such as Hyundai, Honda and Toyota to expand their presence in the country.

“In recent years, March and April used to be good months. But now 20 to 30 percent drop is there in these months also,” says Gagan Arora, business head at the Hyundai showroom. “There is a slowdown in the whole industry. New buyers are not being added so frequently.”

Economists say while rising exports to the United States and China present a silver lining, the first challenge facing India’s new government due to take office after vote counting in elections is completed this week, will be how to restore overall momentum to the economy and see why consumers are not so willing to open their wallets. (VOA)