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Nepal signs deal with India for fertilizer procurement; deal to boost bilateral economic cooperation

In a major relief to Nepal's agriculture sector, the government has signed a memorandum of understanding with India, ensuring the constant supply of chemical fertilizers for the next five years

Mar 01, 2022
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Nepal signs deal with India for fertilizer procurement (Photo: kathmandupost)

In a major relief to Nepal's agriculture sector, the government has signed a memorandum of understanding with India, ensuring the constant supply of chemical fertilizers for the next five years. The long-term understanding came amid a global shortage of chemical fertilizers last year. 

Officials of the two nations on Monday signed a government-to-government agreement, bypassing the lengthy global tendering process that normally takes six months to materialize the imports. Amid fluctuating global prices, it has been decided to form a joint steering committee to negotiate prices before each planting season. 

“It’s a major breakthrough,” Mahendra Raya Yadav, Nepal's Minister for Agriculture and Livestock Development, was quoted as saying by The Kathmandu Post. “This will ensure supply of chemical fertilizer at times of crisis,” he said.

Under the deal, the supply from India will cover almost 30 percent of the country's total annual fertilizer demand. 

Nepali authorities pursued, proactively, an early deal this year after last year several countries in the region had faced acute fertilizer shortage, which resulted in low productivity. India, a major supplier of fertilizer, had also faced a shortage due to supply chain disruption of raw ingredients needed for manufacturing. 

This year, when general elections are due in May, the Nepali government looks to avoid a fertilizer crisis like the one witnessed last year. Thousands of farmers protested last year due to a delay in procurement at a time when the country was reeling under political instability over the government formation. 

In a statement released on Monday, the Indian Embassy in Kathmandu said, “The pact is yet another milestone in bilateral economic cooperation and also an important reflection of the priority attached by India to its partnership with Nepal.”

“The signing of this memorandum is expected to help address recurring fertilizer shortages in Nepal, and improve agricultural productivity for the direct benefit of Nepali farmers,” it added. 

(SAM)

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