The government of India has decided to refund Rs.1.20 billion excise duty to Nepal, which was imposed on various export goods manufactured in India.

“The GoI has issued an order for the release of a total of Rs.1.21 billion (Irs.760 million) in lieu of excise duty which the GoI had collected on goods manufactured in India and exported to Nepal,” a source at the Indian Embassy in Kathmandu told Nepalnews Tuesday.

The source added, “The duty refund procedure was under process for some time now and the GoI put the process on fast track last week.”

The Indian government has also asked the New Delhi-based Punjab National Bank to transfer the amount to Nepal Rastra Bank, according to the source.

India, which has welcomed the recent political developments in Nepal after the royal proclamation restoring the dissolved parliament, assured to provide financial assistance to the Nepal government.

According to media reports, Indian Prime Minister Dr Manmohan Singh in a telephonic conversation two days earlier expressed willingness to work together with the new government and pledged economic cooperation to Nepal.