India to Support Construction of Agro-Industrial Park in Chitwan

India has agreed to provide financial assistance to Nepal for the construction of an agro-industrial park in Chitwan, senior government officials said following the ninth meeting of the Nepal–India Joint Working Group on Agriculture.

The meeting, held in Kathmandu on December 28-29, focused on strengthening bilateral cooperation in the agriculture sector. The joint working group was formed to enhance agricultural collaboration between the two countries.

According to Joint Secretary at the Ministry of Agriculture and Livestock Development Dr Hari Bahadur KC, India will provide financial support for the project, while Nepal will make the required land available. Nepal has also requested the Indian side to assist in preparing the detailed project report (DPR) for the park.

“An Indian technical team will study and inspect the proposed site, after which work on the DPR will move forward,” said KC, who led the Nepali delegation.

He said the land for the park will be provided by the Agriculture and Forestry University and Bharatpur Metropolitan City, as agreed earlier. However, the exact land requirement and total investment size will be determined only after the DPR is completed.

The proposed agro-industrial park aims to process agricultural products produced by Nepali farmers and support laboratory testing and quality assurance. KC said Nepal’s technical team will finalise the park’s operational modality, and Nepali officials will be taken to India to study similar parks before implementation.

This was the first meeting of the joint working group held under the new Memorandum of Understanding on Agricultural Cooperation, signed between Nepal and India on April 9, 2025. It was also the first meeting of the high-level mechanism in nearly five years, following the previous session in January 2020.

During the meeting, both sides noted that bilateral agricultural trade between Nepal and India exceeded $1.6 billion in 2024–25 and committed to making the trade relationship more balanced, organised and robust.

No Progress on G2G Fertiliser Procurement Review

Although the agenda included a review of a government-to-government (G2G) agreement signed nearly four years ago to procure 935,000 metric tonnes of chemical fertiliser from India, officials said little progress was made on the issue.

Joint Secretary Ram Krishna Shrestha said the matter was discussed but no clear decision was reached. Nepal reiterated its preference to import fertiliser produced within India, which is cheaper, but the Indian side was reluctant to supply domestically produced fertiliser.

“India has proposed supplying fertiliser imported from third countries, but that would be costlier for Nepal due to additional transportation costs,” Shrestha said.

As per the agreement, signed on March 1, 2022, India had committed to supply the agreed quantity of fertiliser to Nepal within five years. However, Nepal has managed to import only 115,000 metric tonnes through the G2G mechanism in the past four years, the ministry said.

The Indian side also expressed its willingness to expand cooperation with Nepal in agricultural research, technology transfer and infrastructure development in line with its ‘Neighbourhood First’ policy.

Nepal, meanwhile, thanked India for recognising laboratory testing of eight categories of Nepali agricultural products and urged an expansion of the list, along with uninterrupted access for Nepali farm produce to the Indian market.

The meeting also held in-depth discussions on expanding cooperation in digital agriculture, climate-resilient farming, natural farming systems and food security.

Both sides agreed to prepare and implement a biennial action plan within the next three months to operationalise bilateral agricultural cooperation. They also agreed to improve logistics to ensure smooth fertiliser supply, strengthen collaboration in agricultural infrastructure development, and maintain regular dialogue between concerned agencies to address food quality and quarantine-related technical issues.