Table of Contents

[August 2023] Nepal and India Enhance Trade Access and Fuel Regional Growth with Renewed Agreement, Power Trade Breakthroughs, and Digital Payment Innovation. This agreement is essential for Nepal's sea-borne trade, providing closer proximity to Bay of Bengal ports than to Chinese ports. It also includes access to inland waterways, streamlined movement through Integrated Check Posts, and expansion of cross-border cargo rail links. Furthermore, the agreement addresses Nepal's petroleum import reliance on India through the extension of pipelines. The article highlights significant developments in cross-border power trade, including a long-term agreement for India to purchase 10,000 MW of power from Nepal. A new digital payments agreement is expected to enhance trade and economic cooperation. These initiatives hold promise for strengthening bilateral ties between Nepal and India and fostering regional energy cooperation.

[April 2023] The new foreign trade policy (FTP) of India aims for $2 trillion in exports by 2030, but it may not fully recognize the remarkable opportunity India has to attract investment and capture diversification-driven investment due to the desire of Western democracies to contain China's trade and technological progress. The policy focuses mostly on exports and lacks consideration of lowering import tariff barriers, which could be detrimental to increasing shares in global value chains. While there are some positives in the policy, it falls short in providing a strategic vision to address emerging challenges and may require revisions sooner rather than later to achieve its ambitious export goal.

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[January 2023] Sri Lanka's economic crisis, characterized by a default on its external sovereign debt and dangerously low foreign reserves, is the result of long-term policy errors, including overreliance on external borrowing to finance questionable infrastructure projects and a non-transparent and protectionist trade regime. To navigate its way out of the crisis, Sri Lanka must implement tax reforms, improve public financial management, and impose a legal debt ceiling. Additionally, the country should undertake sustainable tariff reforms, enhance regional economic cooperation, and strengthen social safety nets. The IMF's support is sought, but debt restructuring is complicated, especially with China as the largest bilateral creditor. The road to recovery will be arduous, requiring difficult choices, fiscal tightening, and measures to protect vulnerable populations. 

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[November 2023] The delay in the India-UK Free Trade Agreement (FTA) could lead to a more substantive and beneficial deal for both countries. As India shifts its focus to bilateral FTAs after competitors sign mega-regional trade deals, the UK seeks to secure market access post-Brexit. The two countries complement each other in terms of their economies and strengths. An early harvest FTA could increase India's goods and services exports to the UK by 31% by 2035, but a deeper liberalization could double that increase. Deeper trade integration has shown larger benefits in cross-country research. Despite disagreements in certain sectors, both sides should remain flexible and focus on the bigger picture of long-term gains. A comprehensive India-UK FTA could lead to substantive economic gains and propel both democracies to higher growth levels.

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