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After Covid-induced lull, trade between India and Nepal starts to pick up

India-Nepal trade picks up

Trade between India and Nepal is picking up steam as the two neighbours successfully managed to contain the spread of the Covid 19 pandemic. In August, bilateral trade stood at Rs 52.6 billion, according to data portal Trading Economics. Though bilateral trade between India and Nepal touched the all time high of Rs 60 billion in March this year, the brutal wave of Covid 19 pandemic impacted movement of goods thereafter.

In January, trade between India and Nepal stood at Rs 55.8 billion dollar, while in February, it touched Rs 53.4 billion.

However, now as the two countries accelerate efforts to resume transnational rail services between the two, sources said that trade and economic activities will get a further boost.

Also read: In 100 days, Nepal PM Deuba resets Kathmandu's foreign policy, emphasises need to maintain good relations with neighbours

“Connectivity will be key and we are taking all steps to enhance linkages. In the post Covid phase, connectivity will be the focus,” an insider told India Narrative.

The closing of borders due to Covid 19 not only impacted informal trade but brought much misery to the people living around the border areas. An executive working with a think tank said that there are a few villages on both sides of the border that depend only on imports. “Their livelihoods have been dented and the only way to normalise the situation is to expedite infrastructure to ensure better integration and connectivity,” the executive said.

Sources also said that the two governments are already in discussion to take the issue of connectivity forward.

“One of the fundamental aspects of the bilateral relationship must be conducted via the development of cross border infrastructure: roads, railways, hydropower and so on,” Bhaskar Koirala, Director of the Nepal Institute of International and Strategic Studies said.