Tariff and non-tariff trade barriers imposed by India, which happens to be Nepal’s largest export destination, accounting for nearly two-thirds of Nepal’s trade, have severely restricted Nepal’s export potential, including its textile business, believe traders and experts alike.
Counter veiling duty (CVD) on Nepali ready-made garments, apart from copper and brass utensils and kattha, along with “quantitative restrictions” on acrylic yarn, vegetable ghee and copper utensils have caught the country in a very difficult position.
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“Nepali traders are forced to pay transit fees for exporting medicinal herbs in neighbouring Uttar Pradesh state of India,” said Purushottam Ojha, former Commerce Secretary.
He also maintained that India should provide tariff preferences on agriculture and primary goods on a reciprocal basis, going by the bilateral trade treaty between two countries.
“However, the imposition of non-tariff barriers (NTB) is high as far as Nepali products are concerned,” Ojha added.
He was speaking at a workshop on “NTB in Saarc region: Issues and Challenges” organised by the Confederation of Nepalese Industries (CNI) in Kathmandu on Wednesday.
According to him, India should provide free access to Nepali goods, not containing more than 70 per cent imported raw materials. “However, India has been imposing 6-12 percent of the CVD on 30 percent of the maximum retail price of the branded Nepali ready-made garments,” he said.
Although Nepal has long been seeking waiver of the CVD, India has been reluctant to do so, which became obvious during a recent interaction in Kathmandu regarding the CVD with Indian Ambassador to Nepal Ranjit Rae.