India, Nepal plan border fencing to stop smuggling

"Current studies are being made into erecting two km of barbed wire at each of the four Nepalese major customs offices (on the border with India)," said Krishna Hari Baskota, director general of Nepal's Customs Department after talks between the two sides Monday.

"The vulnerable situation near and around these four customs offices where there are illegal settlements means there is regular leakage of customs revenues," he said.

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Officials are also looking into moving the offices to new and more secure locations, they said.

About 70 percent of Nepal's total customs duties -- on trade with India and other countries -- are collected from the four customs offices at Birgunj and Biratnagar in southeastern Nepal and Bhairahawa and Nepalgunj in the southwest of the country.

Trade between India and Nepal was 81.35 billion rupees (1.09 billion dollars) in 2002-2003. Of that, Nepal's exports were worth 38.9 million dollars and imports were at 708.9 million dollars.

Customs leakage costs Nepal at least 202 million dollars each year, an official of the Federation of Nepal Chambers of Commerce and Industry said.

Meanwhile, at least 34 people, including eight members of the security forces and a civilian, have been killed in a fresh outbreak of clashes with Maoist rebels, an army source said Monday.

One army serviceman was killed and four seriously injured Sunday when an army truck carrying 45 soldiers was destroyed by a boobytrap set up by Maoists at Sanbarsa in Parsa district, south of Kathmandu Sunday, the source said.