The revised tax treaty was signed by Finance Minister Pranab Mukherjee and his Nepalese counterpart Barshaman Pun in
Kathmandu on Sunday.
It will replace an earlier agreement signed between the two countries in 1987. The agreement is also likely to boost confidence of investors and help
attract more investment from Nepal . India
accounts for only 0.44 per cent of Nepal ’s total trade. India
The bilateral trade between the two nations has increased from US Dollar 1.98 billion in 2009-10 to around US Dollar 2.70 billion in 2010-11, registering an increase of 37 per cent.
Indian firms are the biggest investors in
accounting for about 47.5 per cent of total approved foreign direst investment. Nepal
has signed DTAA with 81 countries and Tax Information Exchange Agreements (TIEAs) with five jurisdictions. It has concluded negotiations with 17 jurisdictions for signing of TIEA. India
Of the 81 DTAAs, 75 do not have specific paragraph for exchange of banking information. All these 75 DTAAs have been picked up for renegotiation. Renegotiations have been completed in 22 cases.