Jaideep Mazumdar
Minister and Deputy
Chief of Mission Embassy of India, Kathmandu



How do you look at the overall regional trade in South Asia?

As everybody will say, it is not up to potential and a lot more can be done. Intra-regional trade within South Asia is only 5 per cent of the trade that the region has with the world. There is, of course, a potential and a huge opportunity for the countries within the region to improve on this figure.


How can connectivity be improved between India and Nepal to negotiate better transit?

In Nepal’s context, as you would be aware that we are building four integrated customs check posts along the border. The objective is that whenever there is a traffic movement between India and Nepal, there is a scientific borderly single place where everything is done – customs check, inspection of goods, clearing of consignments etc. We are also building five cross border railway lines wherein we are harmonising different gauges on both sides of the border as well as building new lines so that goods can come straight to Nepal and vice versa.

To encourage third country trade with Bangladesh, we are building a railway line which will provide an exit from Bangladesh straight into Nepal. We have agreed to allow Vishakhapatnam as an alternative port for Nepal to trade with the rest of the world. We are also building 1,400 kms of roads which will open Nepal inter-land for trading with northern Bihar and northern UP in India along the Terai belt so the movement of goods will become easier. These kinds of connections and inter-linkages are being built to improve transit.


How do you view economic diplomacy in the context of enhanced regional trade among SAARC nations?

I can speak for our foreign service that is the Indian Foreign Service, which puts a tremendous amount of importance on economic diplomacy which encompasses trade diplomacy. In all our embassies, we have designated officers who look after harmonising, increasing the trade and helping the private sector of the countries they are posted at. For trade diplomacy, we have an entire division in the Ministry of External Affairs in India which deals with such matters.


There seems to be a sheer lack of trust among nations on different issues. How big a deterrent is this for intra-regional trade?

Historically, there has been a problem between India and Pakistan that was a hindrance for intra SAARC trade. We now hope that things will move much faster and we have been very keen to move the SAARC free trade process forward. We have been doing our bit to ensure that free trade develops in the region.


India, being the centre of regional trade among the SAARC nations, could have played a more vital role in making the SAARC trade bloc effective. What are the reasons for India not being able to do so?

Of course, everybody could have done more. As I said earlier, the potential of intraregional trade in the SAARC region is too large and there is so much opportunity. It naturally means that the potential has not been achieved but it’s due to many factors. I think there is a realisation now among the countries in the region that we need to increase those linkages and move SAARC into a more integrated regional cooperation model. All the leaders have talked about it at the Maldives Summit and our Prime Minister has also spoken very strongly in favour of integrating SAARC.


Why is the trade in this region more oriented towards international trade rather than trading within the region itself?

You cannot generalise this. There may be some products which will have a market in the SAARC region while there may be some other which can find more lucrative markets outside the region. The very fact that intra SAARC trade is only 5 per cent does not mean that the objective should be to make it 100 per cent. For example, oil is always imported so it goes both ways – exports as well as imports. Even Bangladesh which produces so much of garments cannot look only at the South Asian market. People have very high buying power in Europe and North American countries so there are commodities which will find a market in that part of the world and not necessarily in South Asia.


How do you view recent development such as BIPPA in the context of intra-regional trade?

BIPPA is an agreement which is just that – an agreement that was to encourage the investors of both countries to invest in each other. We have signed such agreements with more than 75 countries so having agreements with them does not mean that all those countries have invested in India. Therefore, the final decision on investment depends on many factors such as policy stability, security etc. BIPPA itself is only a facilitative document.


What are the potentials of Nepal’s trade with countries in the SAARC region, especially India?

You can only export what you can produce. For most of the countries in the region, the exportable products are not adequate therefore countries like Nepal and Bangladesh have big trade deficits with India. Import wise too, if Nepal does not buy goods from India, it has to buy them from somewhere else simply because it does not produce those goods. For example, petroleum products have to be bought from India or some other country and if you buy it from a third country, you still have to transport it through India. If you don’t produce a certain commodity, you cannot trade that. 