In what is being viewed as Prime Minister Koirala\'s biggest achievement of his visit to India, a tax which was imposed barely months earlier was used to bargain with Nepal to introduce new provisions for the import of Indian vehicles into the country.

India\'s April decision to levy the Special Additional Duty (SAD) on Nepali goods entering India had seriously affected exports. But nothing by Nepali officials and businesses to get it scrapped could budge the Indians.

Nepal\'s contention was that SAD was against Protocol V of the 1996 trade treaty that allows zero-customs entry for Nepali products-except alcohol, tobacco and cosmetics-in Indian markets. "We\'ve always said that there was no legal basis for the duty," says a Nepali official. "But none of the exporters dared to challenge the duty in Indian courts, which is why it remained."

SAD was levied on items that attracted Indian excise-yarns and manufactures such as toothpaste, soaps, biscuits and noodles. Most affected by SAD were the larger Indian joint ventures such as Dabur, Nepal Lever and Colgate-Palmolive. And Lever\'s General Manager Sandip Ghosh was exultant on the lifting of SAD. "All who have worked for it need to be congratulated," he says.

Both the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Nepal Chamber of Commerce have welcomed India\'s decision to do away with SAD. "This is a very big relief for those selling items that attracted the SAD," says Badri Ojha, secretary general of FNCCI. SAD was levied on goods that qualified for Indian excise duty.

As the quid pro quo for scrapping SAD Nepal will allow Indian vehicle imports on the basis of "self certification" by manufacturers to comply with Nepal\'s Euro-1 Emission standard, a provision that already stands for Japanese vehicles.