Contrary to expectations, when the Nepali and Indian secretaries of commerce met over the weekend in New Delhi, they could not reach an agreement on one of the most pressing problems addressed during the renewal of the trade treaty. The Inland Container Depot at Birganj will continue to remain unused, as it has for the past year, until the rail link can be made operational. There was some movement on other Nepali concerns. Finally a deadline was agreed on to set up quarantine posts at Sunauli, Jogbani and Banbasa by 1 November, and the Indians have also agreed to lower the quarantine fees. India also agreed to raise the quotas for copper exports from the 7,500 MT agreed on in March to 10,000 MT. Nepali officials at the meeting said that the Indians agreed to waive the Special Additional Duty (SAD) announced in its budget early this year and also remove the luxury tax West Bengal state had slapped on Nepali ghiu and tea. There were also assurances that anti-dumping duties on acrylic yarn and zinc oxide would be lifted.

But it will take time before India actually stops levying the duties, given the complex procedures involved. The Inter-Governmental Committee has agreed, however, to meet again next month to discuss in more detail two matters: the modalities for trans-border movement of motor vehicles, and the rail agreement. Rail transport to the ICD is expected to lower transport cost of goods to and from the Calcutta port by as much as 40 percent.