INDIA, NEPAL LEADERS WILL MEET TO RESOLVE TRADE DISPUTE
The leaders of India and Nepal will meet next month to unravel a trade dispute that has blocked supplies to the Himalayan kingdom, but important differences remain between the two nations, analysts said. India's Minister of External Affairs P.V. Narasimha Rao left here Aug. 26 after talking with Nepal's King Birendra and arranging a meeting with India's Prime Minister Rajiv Gandhi, to be held in Belgrade, Yugoslavia.Skip to next paragraph
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Mr. Rao's visit was the first serious effort to break the five-month-old quarrel which has brought severe economic hardship to landlocked Nepal, one of the world's 10 poorest countries. Relations deteriorated in March when India shut down fuel supplies and closed all but two border crossings for Nepali imports when the two sides failed to agree on terms for renewing expired trade and transit treaties.
The impact on Nepal was shattering, causing widespread shortages and forcing fuel-starved factories to close.
Nepal reacted by ending duty-free privileges for goods from India, which until then accounted for 40 percent of its total imports.