Kodak Nepal (P) Limited has filed a petition in the Supreme Court demanding that it be provided a Certificate of Origin (CO), needed to qualify it for duty-free exports to India under the 1996 Treaty of Trade between Nepal and India. The petition, dated 18 January, accuses the Cabinet Secretariat, various government agencies and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) of delaying its origin certification with no explanation whatsoever. Krishna Prasad Silwal, on behalf of Ramachandran Subramany, a director at Kodak, filed the petition.

Kodak Nepal, an undertaking of Eastman Kodak Company of the USA and Kodak India (80-20 percent), was registered at the company registrar's office in Nepal in July 1998. It has since spent over Rs 370 million to build a factory and train employees. Kodak began production on 9 September 1999 but has been unable to export to India, although it has exported to Singapore. Kodak is required to sell at least 20 percent of its products in third countries, that it has done. The government certified the origin of its exports for sale in Singapore, but not for export to India, the petitioner argues.

Kodak Nepal says it first applied for origin certification on 8 January 1999 at the Department of Industry and was told it would be issued one on the start of production. That has not happened. Since October 1999 Kodak Nepal has been writing to the FNCCI and different government departments enquiring about its application but has not been given a certificate or an explanation.

It is believed that Kodak has been denied a CO for fear of Indian retaliation, because India does not accept Kodak's value addition process as manufacturing. The colour photo paper lobby is against Kodak and so are officials at India's finance ministry, who see it as a ploy to dodge high Indian duties. The charge: Kodak came to Nepal only to avoid high import duties. Other sources say officials at the Indian embassy in Kathmandu helped Kodak during the licensing process, which makes the Indian government's new position contradictory.

Generally the FNCCI issues the CO after a technical committee comprising business and government representatives approves the application. Because Kodak was a special case-there were doubts about whether its process was actually manufacturing even while it was building a factory-the technical committee is said to be waiting for India's "tacit" approval. The government of Nepal, for its part, has accepted Kodak's process as manufacturing, which was even notified in the Nepal Gazette.

The Kodak issue has been discussed at political levels too. US Secretary of Commerce who was accompanying Bill Clinton to India in April 2000 even put in a word for the company. Prime Minister Koirala also raised the issue during talks with his counterpart while visiting New Delhi last year. Later he is said to have pitched for Kodak again at a meeting with the Indian PM at the UN General Assembly in New York