Industry body Assocham has proposed to the ministry of commerce and finance to re-negotiate the ?double taxation avoidance agreement? with Nepal in the light of significant presence of Indian companies in the Himalayan country.

The revisions of existing double taxation avoidance agreement between the government of India and government of Nepal needs to be done in the light of opputunities for the Indian companies for investment and cooperation in areas of tourism,hydropower, health, construction, and telecom.

The revision of the agreement is also necessary because people of both the countries are allowed to move and work freely across each others borders which faciitates trade and investment among the two nations.

According to Assocham secretary general, DS Rawat, ?This is very crucial because in future India and Nepal are poised to jointly harness the hydro and tourism potential in Nepal. The FDI rules have also been liberalized and the government of Nepal is looking forward to public-private partnerships in various key areas.?

India has been assisting Nepal in the development of its hydropower potential. Four hydroelectric schemes, namely Trisuli, Western, Gandhak and Devighat have been implemented in Nepal with financial and technical assistance from India.

In the recent past, Nepal imported around 186 million units of energy from India and exported 138.90 million units. As per the water resources strategy of Nepal, by 2017 Nepal aims to develop 2,230 mw hydropower to meet the projected demand of 2,230 MW including 400 mw for export to India. Cooperation between India, Nepal and Bhutan on the energy front can therefore provide a win-win situation for all. India could import hydropower to meet part of the country?s energy needs.

Nepal has an estimated potential to generate 83,000 mw of electricity which remains untapped due to resource constraints. The current installed capacity of Nepal is just 591 mw and forests are its second largest natural resource followed by hydro.

Nepal is now contributing significantly to the development of IT sector. Some of the major Indian companies that have their presence in Nepal are Dabur, Unilever, Colgate, and GMR.

Currently, major exports to India from Nepal include Vanaspati, toothpaste, jute goods, sackings, twines, hessian, polyester, acrylic yarn, pulses, hides and skins, herbs, cardamon, rice bran oil, ginger, oil cakes and noodles.