Nepal to ink long-term fertilizer supply deal with India

Nepal is all set to sign a long-term chemical fertilizer supply deal with India following the in-principle approval given this week by Prime Minister K. P. Sharma Oli’s cabinet, in a move to avoid recurring shortages during the peak growing season

Jun 05, 2021
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Nepal-India fertilizer supply deal

Nepal is all set to sign a long-term chemical fertilizer supply deal with India following the in-principle approval given this week by Prime Minister K. P. Sharma Oli’s cabinet, in a move to avoid recurring shortages during the peak growing season.

Yogendra Kumar Karki, secretary at the Ministry of Agriculture and Livestock Development, told the Kathmandu Post that a five-year government-to-government agreement would be sealed this month to ensure uninterrupted supply of vital plant nutrients.

As per the draft accord, Nepal can buy up to 200,000 tonnes of chemical fertilizer, most of it urea, from India annually without following a global tendering process.

“Regarding pricing, a joint secretary-level negotiation team of the two countries will determine the rate before any purchase agreement is made in the respective years. The price will be the below-cost quoted price or tendering of that year, month or day,” Karki said.

Officials at the agriculture ministry said that Nepal planned to fulfill at least 30 percent of its annual fertilizer requirement through the government-to-government supply mechanism.

The fertilizer will be brought by state-owned Agriculture Inputs Company. But India has not named the company that will be authorized to sell the product.

Nepal had revived long-stalled talks for a chemical fertilizer agreement with India in December last year under which it would buy a fixed amount over a long-term period to avoid frequent shortages during the main growing season.

According to Karki, Nepal had made several deals with India to obtain chemical fertilizer in the past, but they were signed on an ad-hoc basis.

“Nepal will get assurance of supply of fertilizer the same way it has the assurance of supply of petroleum products from India. But fertilizer shipments will be made only when there is a crisis, not all the time.”

(SAM)

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