During Koirala\'s India tour, the governments of Nepal and India also tried to reach an understanding on the definition of "manufacturing" for the purpose of the 1996 treaty though no agreement was reached.

In December 1999 India proposed a Four-Digit Harmonised Coding system to determine if items using raw materials from countries other than Nepal and India were to be considered for duty-free export to India.

The proposal in now official and may be discussed and finalised by the inter-governmental committee of commerce secretaries. The proposal is said to exclude processes such as splitting, slicing, cutting, repackaging, etc, as manufacturing.
These are precisely the terms that can be used to describe the process used by Kodak Nepal. The Eastman Kodak and Kodak India venture set up in Hetauda has not been able to export to India as it has not been able to get the origin certification needed to be able to export duty free.

India has also agreed to make food testing easier by setting up laboratories near the border, at Gorakhpur and Raxaul. It also agreed to help Nepal upgrade its own food-testing laboratories.

Nepal and India also decided to conclude a Bilateral Investment Protection and Promotion Agreement (BIPA) as soon as possible. At present there are 170 operational Indian joint ventures in Nepal.