China resumes one-way trade via Hilsa port

China has resumed one-way trade through Nepal-China Hilsa-Purang border port.

According to a press note issued by the Foreign Ministry today, the border port was reopened for the one-way trade on December 26.

"The two-way trade through the border point is also expected to resume soon," the press note reads.

Nepal's trade with the northern neighbour remained badly affected for the past three years after the closure of the border ports including Tatopani, Kerung and Hilsa. 

After Covid-19 pandemic, People’s Republic of China begun placing restrictions on the border ports with Nepal hurting the bilateral trade.

Earlier today, Rasuwagadhi-Kerung port between Nepal and the China resumed two-way trade.

The Department of Commerce of the Tibet Autonomous Region of the People’s Republic of China organised an official ceremony in Kerung to mark the reopening of the port. In the last fiscal year, Nepal has not been able to export anything through the northern border points, whereas imports also witnessed very less prompting the Nepali traders, involved in imports from China, to abandon their business.

"The resumption of port is expected to augment bilateral trade between Nepal and China," the press note from the foreign ministry further reads.

Nepal resumes exports through Rasuwagadhi border after 3 years

The northern border that has remained almost closed after 2015, has opened from today as Nepal exported some eight containers of goods to China through the Rasuwagadhi border customs.

Export from Nepal has been completely stalled for about 36 months citing the Covid-19 pandemic, whereas trade has been irregular though Tatopani customs since 2015 devastating earthquake. 

Chief Customs Officer at Rasuwa Customs Office Narayan Prasad Bhandari confirmed the export of goods worth around Rs 5.07 million today through the Rasuwagadhi customs today. 

“Exports that had stalled due to the Covid pandemic have started from today,” he said, adding that bamboo stools, handicrafts and copper ornamental items were exported to China today. "The export of goods and the movement of people through Rasuwagadhi customs was closed from January 29, 2020."

According to the customs report, goods worth Rs 763 million were exported to China in the fiscal year 2019-20. However, a limited import was allowed and about 14 Chinese containers were imported from the border daily, though irregularly. 

Nepali traders have been blaming China for imposing an 'undeclared blockade' on Nepal by halting the free movement of goods to and from the landlocked country via both Tatopani-Khasa and Rasuwagadhi-Kerung customs points. Nepali traders have been voicing their concerns time and again but the apathy from the Chinese side pushed them into huge losses. 

Ready-made clothes, apples, shoes, bags, motor batteries, plastic goods are imported from China through the border, whereas pashmina, carpets, bamboo stools, broom grass, refined flour, vegetable ghee, noodles, pasta, biscuits, juice, jam, beaten rice, lapsi candy, chocolate, sugar and chewing gum are exported to China.

According to a press note issued by the Chinese Embassy in Kathmandu, “The opening of two-way trade of Kerung port will promote Nepal’s exports to China, reduce the trade deficit in Nepal, solve the trade imbalance, and further improve the connectivity between China and Nepal.”

Nepal and China trade through Tatopani and Rasuwagadhi border points. But the Tatopani border point is still closed for two-way trade. 

The resumption of bilateral trade could be a coincidence with the formation of a new government, that is said to be orchestrated by the northern neighbour, a day ago in Nepal.

There will be an official ceremony to celebrate the resumption of two-way trade tomorrow. The ceremony will be attended by delegates of the Department of Commerce of Xizang Autonomous Region, the Lhasa Customs, the General Station of Immigration Inspection of Xizang Autonomous Region, the Health Commission of Xizang Autonomous Region, and other relevant departments.

The Chinese Embassy in Kathmandu has released pictures of export from Nepal.

चीनको अघोषित नाकाबन्दीले व्यवसायी मर्कामा

चिनियाँ नाकामा अड्किएका अर्बौंका सामान छुटाउन राज्यका तर्फबाट पहल नभएको भन्दै नेपाल राष्ट्रिय व्यवसायी महासंघले आपत्ति जनाएको छ । उद्योगी–व्यवसायीहरुका समस्या समाधान गर्न चासो नदेखाएको भन्दै महासंघले शनिबार विज्ञप्ति जारी गर्दै सरकारको ध्यानाकर्षण गराएको हो ।  

नेपालीहरुको ठूलो चाड दसैं नजिएको तर दसैंमा बेच्नुपर्ने सामान नाकामै रोकिँदा अर्बौंका सामान सडेर बिग्रने अवस्थामा पुगेको महासंघका अध्यक्ष कुमार कार्कीले बताएका छन् । “उत्तरी नाकामा भइरहेको अघोषित नाकाबन्दीको प्रत्यक्ष मार भने व्यवसायीले भोग्नु परेको छ,” अध्यक्ष कार्कीले जारी गरेको विज्ञप्तिमा भनिएको छ, “सयांै मालवाहक कन्टेनरहरु नाकामा थन्किएर बस्दा चाडपर्व केन्द्रित अर्बौंका सामान सडिने, कुहिने र बिग्रने भई नोक्सान भएको छ भने बजारमा सामानको हाहाकार देखिन्छ ।” 

महासंघले यी समस्याहरु तत्काल समाधान गर्न पहल गरिदिन पनि अनुरोध गरेको छ । धेरै उद्योगी–व्यवसायीहरु बैंकको ब्याजदर तिर्न समेत नसक्ने अवस्थामा पुगेको महासंघले बताएको छ । बैंकले दिएको मानसिक तनावका कारण कतिपय उद्योगी–व्यवसायीहरुले आत्महत्याको बाटो रोज्न बाध्य भएको भन्दै महासंघले यसतर्फ गम्भीर बन्न समेत सरकारलाई अनुरोध गरेको छ । “व्यापार व्यवसाय गर्न सामान नाकामा थन्किएको, बैंकले ऋण चुक्ता गर्न बारम्बार ताकेता गर्दै सम्पत्ति लिलाम तथा जफत गर्ने धम्की दिन्दै मानसिक तनाव दिइरहेको अवस्था छ,” विज्ञप्तिमा भनिएको छ, “यावत् समस्याले गर्दा व्यवसायीहरु मानसिक सन्तुलन गुमाएर आत्महत्या गर्नुपरेको उदाहरणहरु छन् ।”

बैंकको ब्याजदर अत्यधिक बढेको भन्दै बैंकको ब्याजदर नियन्त्रण गर्न समेत महासंघले नेपाल राष्ट्र बैंक समक्ष अनुरोध गरेको छ । देशको अर्थतन्त्रमा सबैभन्दा महत्वपूर्ण क्षेत्र उद्योग व्यवसाय भए पनि राज्यको राजस्व असुलीको मूल क्षेत्र दिनानुदिन धरायसी बन्दै गएको छ । देशमा उद्योगी तथा व्यवसायीमैत्री वातावरण नहुनुका कारण अर्बौं लगानी गरी उद्योग–व्यवसाय सञ्चालन गर्दै आइरहेका उद्योगी–व्यवसायीहरु पलायनतर्फ उन्मुख भइरहेको प्रष्ट देखिएको नेपाल राष्ट्रिय व्यवसायी महासंघले जनाएको छ ।  कागजमा मात्रै व्यवसायमैत्री नीतिनियम हुने र कार्यान्वयन भने अति नै फितलो हुनु नै अहिलेको मुख्य समस्या देखिएको उसको भनाइ छ । 

महासंघका अनुसार व्यवसायीहरुले आफ्नो सम्पूर्ण जायजेथा बैंकलाई बुझाएर ऋण गरी उद्योग व्यापार सञ्चालन गरेका छन् । तर, विभिन्न प्राकृतिक प्रकोप र कोरोना महामारीका कारण व्यापार–व्यवसायले गति लिन नसक्दा बैंक ब्याज तथा घरभाडा समेत तिर्न नसकेको अवस्था रहेका भन्दै महासंघले फितलो राज्य संयन्त्रका कारण उत्तरी नाकामा भइरहेको अघोषित नाकाबन्दीको प्रत्यक्ष मार भने व्यवसायीले भोग्नुपरेको जनाएको छ ।

Trade through Tatopani customs to close for three weeks

 Nepal China trade has again hit a road block as the northern neighbour has started maintenance of the Friendship Bridge at the Tatopani border point.

“Trade through the Tatopani border point has been halted for next 20 days for maintenance of the Friendship Bridge connecting Nepal and China,” confirmed the Tatopani Dry Port Customs Office. “China has is repairing the bridge and it will take almost three weeks to complete repairing the bridge.”

China has begun repairing the Friendship Bridge as it was partially damaged by floods in Bhotekoshi last monsoon. “The flood had slightly damaged the pillars of the bridge,” the customs informed, adding that China has decided to take 20 days at most to repair the bridge. The trade through the Tatopani Customs can be started only from mid-February. No trade will take place during the maintenance period as there is no import from China.

The Friendship Bridge was damaged in the devastating earthquake of 2015 also. Though, the bridge was reconstructed and came into operation in 2016, the trade through the Tatopani Cyustoms was disrupted several times due to several reasons. The checkpoint, which remained completely closed for four years after the devastating earthquake, was re-opened on May 29, 2019 but again to close due to Covid-19.

According to the Customs office, the checkpost – which has been collecting an average of Rs 5 billion in revenue from import and export of some Rs 20 billion to Rs 25 billion annually – kept closing and reopening for eight times due to the Covid-19 pandemic, floods and landslides. It was in continuous operation for three months after the checkpoint was reopened last September.

Nepal imports Rs 5 billion rice in a month

 Despite claiming to be an agricultural country, Nepal has imported Rs 5 billion worth rice only in a month, revealed the data of Department of Customs (DoC).

According to the data of Department of Customs, the country imported Rs 18.20 billion worth rice only in five months of the current fiscal year 2020-21. “In the four months, the country had imported Rs 13 billion worth rice.”

Though, the government claims to have been encouraging the agriculture production in the country with various programmes, Nepal has imported Rs 33.03 billion worth food items – in the five months of the current fiscal year – including rice, as the domestic production fell short to meet the growing demand for food in the country. “In the four months, the country had imported Rs 25 billion worth food items.”

The country neither has manpower – due to flooding of youth to the foreign employment – nor has it adopted to the mechanisation in the agriculture to boost the production and productivity, apart from comparatively expensive production cost compared to India. “Nepal has imported rice from India,” according to the department.

The cheap rice from India is making Nepali rice face hard times to get market, and lack of government policy push has made it even worse making Nepal the import economy largely also due to growing dependence on remittance that has fuelled the imports. 

Trade deficit narrows, though export receipt can pay for only 10 per cent of import bill

 Though, the trade deficit in the first five months of the current fiscal year declined by 10.91 per cent compared to the same period last year, the export receipt is enough to pay for only 10 per cent of import bill. “The country's export increased by 5.12 per cent to Rs 50.05 billion, whereas the imports declined by 9.59 per cent to Rs 525.49 billion,” according to the government data.

According to the Department of Customs (DoC), Nepal’s trade deficit came down to Rs 475.44 billion from Rs 533.64 billion – though not remarkable, and also conditional not due to government policy push – during mid-July and mid-December as a result of a fall in import and a rise in export. The fall in imports has provided some cushion to the country’s foreign currency reserve that is being spent to imports merchandise.

Despite the increase in export earnings, the government is going to miss its target of export earnings to more than Rs 100 billion by 2020.

Nepal’s 70.65 per cent of total international trade worth Rs 575.44 billion is with India, the data revealed, adding that in terms of import too, some 65.78 per cent of Nepal’s total import is with the southern neighbour. “Nepal has a trade deficit with 112 of its 136 trading partner countries across the globe, and has a favourable trade balance with the remaining 24 countries in the five months of the current fiscal year 2020-21.”

Government goes bankrupt

Though, incumbent finance minister Dr Yuba Raj Khatiwada – issuing a whitepaper two years ago intending to tarnish the earlier government’s image – claimed that the government coffer was empty and the economic indicators were worse, he has finally succeeded to empty the treasury and worsen the economic indicators further, by himself.
As Khatiwada presented his third budget in a row – the only second lucky finance minister to do so after 1990 – the government has no money to pay salary to its employees because of its failure in mobilising the revenue. “The government is having a cash crunch to manage immediate liabilities due to a shortage in revenue mobilisation also because of nationwide lockdown imposed since last 82 days,” a senior government employee at the Finance Ministry confirmed.
The government has imposed nationwide lockdown since March 24 that has stagnated all the businesses activities across the country. The government needs around Rs 40 billion – every month – to meet mandatory liabilities like regular salary to its employees, but it has been able to mobilise around Rs 15 billion from the major source – customs offices – only in a month, according to the Finance Ministry official. The government coffer has only around Rs 50 billion at present, which is enough for the salary of next month, which is the last month of the current fiscal year,” he said, adding that from the first month of the next fiscal year, the government will not be able to pay regular salaries to its staff also due to Supreme Court move to restrict the government to collect tax during the lockdown. “The Supreme Court has issued interim order to the government not to push the private sector for tax during the lockdown and allow them 30 days after the lockdown, is fully relaxed, to clear tax dues.”
The Finance Ministry has, however, moved to the Supreme Court to vacate the interim order as it will fail to pay salary, if it is not allowed to mobilise tax this month. The government imposed a nationwide lockdown on March 24, closing industries, businesses, suspending ground and air travel, and has asked to pay tax within June 21. Some entrepreneurs went to Apex Court asking an interim order against the Inland Revenue Department (IRD) – under the Finance Ministry – diktat.
According to the Financial Comptroller General’s Office (FCGO), the revenue mobilisation as of today stands at only 58 per cent of the target that is Rs 1.11 billion. Although the government keeps high hopes on gathering a significant amount in taxes in the final month of the fiscal year, it is likely to face a huge shortfall due to Supreme Court’s interim order this time.
The government has an option to transfer the money from various funds into its treasury to meet its necessary liabilities including salary for government workers, pensions for retired employees, social security allowance for the elderly and disadvantaged groups, and payments to be made for internal and external loans.
Citing the adverse situation in revenue mobilisation, the government expects to receive Rs 299.50 billion from external debt and Rs 225 billion from domestic borrowing mainly to meet the recurrent expenditure. But the government capacity to absorb the external debt is limited due to structural and procedural problems, whereas more domestic borrowing will squeeze private sector’s capacity to borrow hurting the economic growth. “Likewise, borrowing to pay salary to the government employees will also send a wrong message as the private sector is also not able to pay salary to its employees,” the official said, adding that more domestic borrowing – for administrative purposes – could also result in an exorbitant rise in market prices.
While presenting his third budget on May 28, Khatiwada claimed that the government will be able to mobilise Rs 827 billion revenue, contain inflation under 7 per cent, and achieve 7 per cent economic growth.

Industry minister vows to solve sugarcane farmers’ problem

Minister for Industry, Commerce and Supplies Lekhraj Bhatta vowed to solve problems of sugar mills and sugarcane farmers by the third week of January.
Taking time in the meeting of the National Assembly today, he informed that the sugar mills have been directed to clear their dues. “The government has formed a task force that will submit its report to the government within 15 days,” he said, adding that the discussions have also been held between the representatives of sugar mills and sugarcane farmers. “The mills have been instructed to immediately pay the dues they owe to the farmers.”
He also said that the government is serious regarding the 11-point demands of the sugarcane farmers, whereas it is also facilitating in the purchase and sale of sugar that the mill owners have in their store.
Bhatta also informed the National Assembly that customs levied on import of sugar has been increased by 40 per cent and importation of this commodity has been prohibited to help mill owners sell their stock of sugar.
The lawmakers, on the occasion, also suggested him to seek a long-term solution as the problem between the farmers and mill owners have been recurring every year. Earlier this week, the sugarcane farmers from various parts of Tarai districts assembled and started a stage sit-in at the Maitighar Mandala in Kathmandu to pressurise the government.
The communist government with a comfortable majority is steering the nation, and the farmers are staging the protest against the government that claims to be championing for the cause farmers and labourers.
Agitating farmers claim that Annapurna Sugar Mills needs to pay a total of Rs 500 million, while Mahalaxmi Sugar Mills owes them Rs 210 million. The government has fixed minimum support price for a quintal of sugarcane at Rs 536.56. Of the total amount, sugar mills should pay Rs 471.28 per quintal, while Rs 65.28 is to be paid by the government as subsidy.
Earlier yesterday, during a meeting with sugarcane farmers held at the Industry Ministry, deputy prime minister Ishwar Pokharel, industry minister Lekhraj Bhatta and agriculture minister Ghanshyam Bhusal vowed to clear all the outstanding payment of the sugarcane farmers by January 21. But the sugarcane farmers have demanded to clear 80 per cent outstanding payment by January 10 and the remaining 20 per cent payment by January third week.
According to sugarcane farmers, the mills are yet to clear outstanding payments for the past five years amounting to Rs 1.33 billion. The farmers have yet to recover Rs 420 million from Shree Ram Sugar Mills, Rs 400 million from Annapurna Sugar Mills, Rs 200 million from Mahalaxmi Sugar Mills, Rs 110 million from Bagmati Sugar Mills and Rs 100 million each from Indira Sugar Mills and Lumbini Sugar Mills, the farmers claimed.

Trade deficit down by 8.9 per cent

Trade deficit fell by 8.9 per cent year-on-year to Rs 414 billion in the first four months of the current fiscal year 2019-20 due to a sharp drop in imports of petroleum products, iron and steel, aircraft and aircraft parts and vehicles.
According to Department of Customs (DoC), imports dropped by 6.92 per cent to Rs 450.29 billion, whereas exports swelled by 23.90 per cent year-on-year to Rs 36.27 billion – totaling the foreign trade to Rs 486.57 billion – between mid-July and mid-November.
The drop in imports – the fourth consecutive month in the current fiscal year – has also resulted in a reduction in the trade deficit though it has hit the revenue mobilisation target of the government. However, there is no cause for celebration as the increase in exports of a single product – palm oil – is not the domestic product as Nepal does not produce palm oil. Palm oil is imported from third country and then re-exported to India as traders are cashing in on the tariff difference between Nepal and India. The data shows that palm oil accounts for nearly one-fourth of the total export.
Imports of iron and steel – the key construction materials – dropped sharply by 33 per cent to Rs 52.65 billion in the first four months, though the drop in the import of iron and steel does not augur well as it shows that construction activities in the country are slowing down.
Likewise, imports of fuel and bitumen also fell by more than 15 per cent as the country imported fuel and bitumen worth Rs 65.21 billion in the first four months of the current fiscal year. Similarly, imports of aircraft and parts also reduced pulling the imports figure down. According to customs data, imports of aircraft and parts dropped by 39 per cent to Rs 10.68 billion, whereas automobile imports dropped by more than 6 per cent to Rs 34.74 billion due to the government’s unfriendly policy towards auto mobile sector.
The central bank has also fixed the down payment for vehicle loans at 50 per cent of the value discouraging the auto imports. In the past, the down payment on a car was as low as 10 per cent.

India to allow Nepal to use three inland waterways

Nepal is likely to get access to more ports of India for overseas trade as India may allow Nepal to use inland waterways in three routes and movement of bulk cargos via railway from Indian seaports to major Nepal-India border points.
“India has expressed its consent during Nepal-India Transit Treaty Review meeting that kicked off in Kathmandu today,” according to a press note from Ministry of Industry, Commerce and Supplies.
The government teams from both the countries discussed various issues relating to simplifying Nepal’s transit routes via India. The bilateral meeting will conclude on Wednesday.
Nepal has been seeking to use three inland waterways – Kolkata-Kalughat-Raxaul, Kolkata-Sahebgunj-Biratnagar, and Kolkata-Varanasi-Raxaul routes – on Ganges River expanding its transit options to the sea.
During the talks in New Delhi last October, the Indian side had agreed on principle to allow Nepal to use these inland waterways. India has developed a waterway on the Ganges River connecting Varanasi and the seaport of Haldiya in Kolkata. Access to the Indian waterways is expected to facilitate efficient movement of cargo imported from third countries to Nepal.
According to the joint secretary of Ministry of Industry, Commerce and Supplies Nabaraj Dhakal, India is also positive toward facilitating railway-based transportation of bulk cargo from Kolkata and Vishakhapatnam seaports of India to Jogwani and Nautanwa, Sunauli, at the Nepal-India border. “Bulk cargo includes fertilizers, sugar, soybean, salt, animal feed and raw plastic materials among others,” he said, adding that the bulk cargo items currently brought from third countries via Kolkata, Haldiya and Vishakhapatnam ports are imported to Nepal only through Birgunj border point. “Nepal at present has been using West Bengal’s Kolkata and Haldiya ports as well as Visakhapatnam Port of Andhra Pradesh.”
Dhakal is leading the Nepali team whereas joint secretary of the Department of Commerce at the Indian Ministry of Commerce and Industry Bhupinder Singh Bhalla is leading the Indian delegation.
The two countries might ink the deal tomorrow, if everything goes smoothly.
According to former joint secretary at the Ministry of Industry, Commerce and Supplies Ravi Shankar Sainju, the use of additional ports will facilitate Nepal’s overseas trade. “Dhamra Port of Orissa can be an alternative to the infrastructural hurdles at Kolkata Port and the long distance to Visakhapatnam Port,” the government officials opined, adding that Dhamra Port is 1806-km from Nepal’s Krishnanagar. “This new port is 400-km near than Visakhapatnam Port and 300-km near than Kolkata.”
Dhamra Port, which is operated by private sector, provides modern facilities and can accommodate up to 25,000 metric tonnes of goods.
Traders believe this port would be useful for the bulk of Nepal-bound goods from third countries. According to traders, Nepali importers can benefit from Mundra Port of Gujrat as well since it is connected to railway network right up to Krishnanagar.
They have long been demanding to allow diversifying the bulk cargo transport as it often takes more than a month for bulk cargos to reach Birgunj due to various hassles. Citing a lack of railway infrastructure, India had been saying that it was difficult to provide bulk cargo facility at other border points.
In 2012, the Nepal-India Inter-government Committee had agreed to expand the bulk cargo facility to Biratnagar and Bhairahawa border points. The agreement, however, was not implemented as the letter of exchange was not issued.

Onion prices hit record Rs 200 per kg

Onion prices touched a record Rs 200 per kilogram (kg) in the markets.
The four times price hike of the onion – in the last three months – is attributed to the short supply from the northern neighbour. Nepal is dependent on imported onions from India due to inadequate domestic production. But India imposed a ban on the export of onion – last month – due to lack of adequate supply back home.
Onion is one of most important vegetables imported from India as Nepal has imported Rs 5.62 billion worth onions from India in the last fiscal year. Nepal imported onions worth Rs 1.3 billion during the first three months of the current fiscal year beginning mid-July compared to Rs 1.2 billion in the same period in the last fiscal year, according to the Department of Customs.
“There is no sign of prices cooling down any time soon,” according to the vegetable sellers. Likewise, the consumers have also started skipping the onion from their daily meals as the prices have increased beyond their imagination.
The prices in India have shot up due to a shortage triggered by unseasonal rainfall leading to crop damage in the main onion growing zones in Maharashtra of India, the Indian media reported, adding that traders fear a further spike in onion prices as a high amount of crops have been damaged by the unseasonal November rains.
But in Nepal, some traders have started importing onions from China to meet the short supply. “But Chinese onions are not as tasty as Indian onions,” according to the consumers.

Tariffs on half a dozen goods revised again after first quarter

The government has revised customs and excise duty on more than half a dozen goods – including gold, silver, cosmetic products, cleaning materials made of iron and steel, and coffee related products, hatching eggs, acrylic emulsion – after the end of first quarter of the current fiscal year 2019-20 to promote the domestic products and discourage the imports.
Though, the government argued that customs and excise duty was revised as per the need mentioned in Sub-section (1) of Section 18, Financial Act, 2019, private sector has expressed dissatisfaction over the revision of customs and excise duty within three months of the implementation of Financial Act 2019. “It will affect stability of trade,” reads a press note issued by Nepal Chamber of Commerce (NCC) today. The chamber reminded government that industries and trading firms do businesses on the basis of their commercial plan prepared according to the Financial Act made public at the beginning of the fiscal year. “But the change in three months will create policy instability making it difficult for the businesses to operate,” it reads.
The cabinet meeting – on November 4 – has decided to revise the customs tariff on gold, silver, wine and coffee related products. The government has increased customs duty on gold imported for commercial purpose by Rs 1,500 per 10 grams on top. Likewise, the government – through the budget speech for the fiscal year 2019-20 – had increased customs duty on gold to Rs 5,000 per 10 grams. With the fresh revision, customs duty on the precious yellow metal has reached Rs 6,500 per 10 grams.
Likewise, tariff on silver has also been increased to Rs 75 per 10 grams, up from Rs 56 per 10 grams.
“The migrant workers bringing in up to 50 grams of gold are now required to pay Rs 7,500 per 10 grams, which was Rs 6,200 per 10 grams before the revision,” according to the notice published in the National Gazette. “If such workers bring 50 grams or more gold, they will have to pay Rs 8,500 per 10 grams as customs duty.” Such tariff was Rs 7,200 per 10 grams before.
The Gazette reads that customs duty of Rs 8,500 per 10 grams will be levied on gold ornaments of up to 50 grams. Earlier, customs tariff on such imports was Rs 7,200 per 10 grams. Likewise, customs duty on import of gold ornaments above 50 grams has been set at Rs 10,000 per 10 grams from Rs 9,000 per 10 grams, the Gazette reads.
Likewise, the government has also increased excise duty on cosmetic products to 10 per cent from 5 per cent. It has also decided to impose excise duty of 5 per cent and 10 per cent on cleaning materials made of iron and steel, and coffee related products, according to National Gazette.
The government has, however, relaxed customs tariff on goods like hatching eggs, acrylic emulsion and excise duty on wine produced in Nepal to promote the domestic products. The government has reduced customs duty on hatching eggs by half. Similarly, customs duty on import of acrylic emulsion – raw material for paints – has been reduced to 20 per cent from 30 per cent to promote the domestic production. The government has also lowered excise duty on wines – wines having up 12 per cent alcohol – made using locally produced fruits by 30 per cent.

Government increases customs duty on gold

The government has increased customs duty on gold and silver to prevent smuggling of the precious metals.
A cabinet meeting, last week, decided to increase customs duty on gold and silver imports in line with the budget speech for the current fiscal year. “The decision officially came into effect from today,” according to Federation of Nepalese Gold and Silver Dealers Association (Fenegosida).
The cabinet meeting – on the recommendation of Finance Ministry – hiked customs duty on import of raw gold to Rs 7,500 per 10 grams for up to 50 grams and to Rs 8,500 per 10 grams for imports of above 50 grams and up to 100 grams, the association said, adding that according to the new law, individuals can bring up to 100 grams of raw gold while returning from abroad. “Earlier, the government was levying customs duty of Rs 6,200 per 10 grams for up to 50 grams and Rs 7,200 per 10 grams on additional 50 grams of the imported raw gold.”
Likewise, for gold jewellery, the government has raised customs duty to Rs 8,500 per 10 grams for up to 50 grams from Rs 7,200 and to Rs 10,000 per 10 grams for additional import of up to 100 grams from Rs 9,000.
Customs duty on silver has also been raised to Rs 75 per 10 grams from Rs 56 per 10 grams, the association informed, adding that the government – through the budget speech for current fiscal year 2019-20 – has increased customs duty on gold.
Similarly, the price of gold increased by Rs 1,100 per tola, in a single day today in the domestic market though the price is decreasing in the international market. According to the Fenegosida, the precious yellow metal has been traded for Rs 71,000 per tola today. Gold was traded at Rs 69,900 per tola on Saturday.
In the international market, gold was traded at $1,459 per troy ounce today, down from Friday's $1,462 per troy ounce.
Had the government not increased customs, the price of the precious yellow metal would have cost Rs 1500 less in a toal, based on the international price. The government increased the customs as the price of gold has been cheaper in the Nepali market compared to India. “As the two countries share open border, hike in customs duty was needed to prevent smuggling of gold to India," the Fenegosida added. “India has been levying 12 per cent customs duty on gold, whereas the customs duty on gold imports in Nepal has reached 13 per cent, with the hike.”

Trade deficit narrows by 12 per cent in first quarter

Trade deficit shrinks to Rs 307 billion by 12.02 per cent in the first quarter of the current fiscal year compared to the same period of the last fiscal year, due to government move to tighten imports of luxury goods including automobiles. This is the third straight month imports have fallen and export earnings have swelled.
According to the Department of Customs (DoC), Nepal spent Rs 334.94 billion in imports – between mid-July and mid-October – which is down by 10.34 per cent compared to the imports of the same period in the last fiscal year. “Likewise, the export earnings soared by 14.41 per cent to Rs 27.16 billion during the period.”
Based on the new import and export data, Nepal spends Rs 12.3 for import for every export worth Re 1. “The import to export ratio has also declined to 12.3:1, compared to the ratio was 15.7:1 during the same period last year,” the department data revealed, adding that
Though, the government boosted the decline in imports to an outcome of the policy reforms to restrict import of luxury goods including the automobiles and boost exports, the slowdown in imports has bleed the government coffer as the government failed to meet the revenue mobilisation target. The government has doubled the excise duty on imported automobiles through the budget for the current fiscal year 2018-19, whereas the central bank has jacked up the down payment on auto loans to 50 per cent of the value of the vehicle tightening the auto imports.
Nepal exported goods worth Rs 17.87 billion to India – almost 66 per cent of the total export earnings in the first quarter – due to increased exports of palm oil. Similarly, Nepal imported Rs 207.41 billion –which is 62 per cent of the total imports during the period – worth goods from India. “The trade deficit with India has also dropped to Rs 189.54 billion from Rs 222.95 billion in the first quarter of the last fiscal year.”
The rosy picture of the rise in exports is mainly because traders have been importing crude palm oil and refining it for export to India. According to the department, Nepal exported palm oil worth Rs 5.7 billion in the first three months of this fiscal year compared to Rs 374 million in the same period in the last fiscal year.
The government has raised the export incentives in major exportable items to 3 per cent to 5 per cent from 1 per cent to 2 per cent. The government provides export incentives to the goods that have at least 50 per cent value addition inside the country.
Despite the incentives, the country has seen a slump in the export of other major commodities including ginger, woollen carpets and textile floor coverings, shawls, scarves, and iron wire and non-alloy steel.

Nepal, India agree to review trade treaty

Nepal and India today agreed to review the bilateral trade treaty.
During the two-day commerce joint secretary level-talks that ended today, both sides agreed to review issues related to bilateral trade and commerce.
According to minister for Industry, Commerce and Supplies Matrika Yadav, both the nations have agreed to take steps like comprehensive review of the existing bilateral trade treaty, to further boost two-way commerce. “The bilateral talks focused on enhanced cooperation to stop unauthorised trade in both nations,” he said, adding that officials of the two countries sat down for the third round of talks to review the bilateral treaty of trade in New Delhi on Thursday and Friday. “The talk is expected to prepare groundwork and other provisions to review the trade treaty.”
The nine-member committee – led by joint secretary at the Ministry of Industry, Commerce and Supplies Nabaraj Dhakal – comprised of representatives from the Ministry of Foreign Affairs, Department of Customs and Ministry of Agriculture and Livestock Development had left for New Delhi on Thursday to hold talks with joint secretary of the Department of Commerce under Ministry of Commerce and Industry of the Government of India Bhupinder Singh Bhalla led Indian delegation at the joint secretary-level meeting. “Nepal and India also finalised the draft of a mutual recognition agreement in the trade of agricultural goods,” he said, adding that after the agreement goes into effect, the two countries will recognise the quality certificates issued by each other.
The ministry has informed that officials also discussed on possible ways to address Nepal’s ballooning trade deficit with India and introduce and amend provisions in the trade treaty to ease bilateral trade.  Meanwhile, it has been agreed upon to include possible concerns raised by both Nepal and India in the revised treaty.
“India has agreed to address Nepal’s concerns related to simplifying trade with the southern neighbour by addressing both tariff and non-tariff barriers,” Yadav said, adding that he would, however, disclose the details of the agreement after the negotiating team submits its report to him. “The meeting also was positive on addressing Nepal’s agenda to drop the zero-tariff facility on Indian agricultural goods and some other primary products.”
Earlier, officials from both the nations had held two meetings on reviewing the bilateral trade treaty in New Delhi on August 9 last year and in Pokhara on February 7 and 8.
Likewise, the February 8 meeting in Pokhara had agreed to declare inland waterways as ‘trade route’ in Nepal-India Trade Treaty. India has principally agreed to allow landlocked Nepal to use three inland waterways, which will help expand Nepal’s transit options to the sea. “Nepal can even operate its own vessels on the Ganges River that runs parallel to the southern border.”
A draft of the letter of exchange on the inland waterways was finalised during the bilateral trade talks,” Dhakal informed.
Nepal and India had issued a joint statement on establishing new connectivity through inland waterways during Prime Minister KP Sharma Oli’s visit to New Delhi in April 2018. Earlier, India has also consented to grant access to the Kolkata-Kalughat, Raxaul; Kolkata-Sahebgunj, Biratnagar and Kolkata-Varanasi-Raxaul routes during the trade talks.
Last March, the two countries formed a joint technical team to study the possibility of operating waterway transportation over various routes. The technical team identified the three routes via Haldia port as the most viable routes for inland waterway transportation between the two countries.
India has developed a waterway on the Ganges River connecting Varanasi and the seaport of Haldia, Kolkata. Access to the Indian waterways will facilitate efficient movement of cargo imported from third countries to Nepal, though the idea seems too far fetched despite Prime Minister KP Sharma Oli’s dream of ferrying ship in Nepal.
The provision could get legitimacy, after it is signed at the next Inter-Governmental Committee meeting.
India currently grants duty-free access to Nepali products with at least 30 per cent value addition. “India has agreed in principle to implement policy considering Nepali products from the customs tariff headings to the customs tariff subheadings, ensuring flexibility in the goods imported from Nepal,” the ministry informed. “Revising duty-free access for agricultural goods, revising the agriculture reform fee imposed by Nepal on Indian farm products, and removing Indian quotas on four Nepali products were among the major items on the agenda.”
Nepal has been asking India to lift the quantitative restriction on the import of acrylic yarn, copper utensils, vegetable ghee and zinc oxide, which has been in place since 2002.

Two-day commerce joint secretary-level meeting in Delhi next week

Nepali and Indian Commerce Ministry officials are scheduled to meet next week in New Delhi to discuss issues related to trade and commerce. The meeting on Thursday will also review the Nepal-India bilateral trade treaty, according to the Ministry of Industry, Commerce and Supplies.
Though the meeting will not be decisive on reviewing the trade treaty, the two-day meeting will focus on simplifying the existing barriers to bilateral trade. The two-day meeting will dwell on ways to address Nepal’s ballooning trade deficit with India and introduce and amend provisions in the trade treaty to ease bilateral trade, the ministry claimed, adding that adding that Nepal’s priority will be to simplify country’s trade with India by addressing tariff and non-tariff barriers. “The meeting will also finalise agendas for reviewing trade treaty, which were discussed during previous two meetings.”
This is the third time that the two countries are sitting together to discuss the review of the trade treaty. “Nepal has also urged Indian authorities to allow shipment of bulk cargo from additional entry points,” joint secretary at the ministry Navaraj Dhakal said, adding that imported bulk cargo from third countries currently can be transported only via Brigunj. “Currently, bulk cargo imported from third countries through Kolkata, Haldiya or Visakhapatnam ports can be transported only to the Birgunj border point in Nepal.”
Bulk cargo includes fertilizer, sugar, soybean, salt, oil cake and raw plastic materials. “Nepal has also urged Indian authorities to lift quantitative import restrictions on different products, including vegetable ghee and yarn,” he added.
Nepal has also been asking India to allow the use of additional sea ports. India has agreed to allow Nepal to use two other sea ports at Dhamra in Orissa and Mundra in Gujarat. Nepal seeks to use these ports as alternatives to Kolkata and Visakhapatnam.
Likewise, India has been asking Nepal to lift the 5 per cent agriculture service fee charged on imported Indian farm items but Nepal has been refusing to cancel the fee stating that it would affect the competitiveness of Nepali agricultural products.
Nepal and India are also looking forward to using inland waterways to transport cargo from Indian ports to the Nepali border. According to the ministry, India has started inland waterways from Kolkata to Varanasi along the Ganga River. India has expressed readiness to extend the routes up to the Nepal border along the Narayani River once the infrastructure is built in Uttar Pradesh and Bihar states.
The meeting will likely finalise the amendments planned to be made to the Treaty of Transit to streamline trade, which will be approved by the Nepal-India Intergovernmental Committee – a mechanism to solve trade-related issues between the two countries – soon.
Earlier, Commerce Ministry officials of both the countries had held review meeting on the bilateral trade treaty in New Delhi on August 9 and in Pokhara on February 7 and 8.
“The joint secretary-level meet will discuss finalising the agenda, which was sent to the second round of meetings held last March,” according to Dhakal.
Developing infrastructure at the customs points on the border between the two countries was also discussed at the last trade talks, he said, adding that India has provided 22 designated routes for bilateral trade. “India has upgraded the Birgunj-Raxaul customs checkpoint while work at the Biratnagar-Jogbani point is nearing completion, but little progress is being made in the construction of infrastructure at the Bhairahawa-Sunauli and Nepalgunj-Rupaidiha points.”
A cabinet meeting last Tuesday formed a nine-member Nepali team led by Dhakal to participate in the talks. The committee-led by joint secretary at the Ministry of Industry, Commerce and Supplies Nabaraj Dhakal comprises representatives from the Ministry of Foreign Affairs, Department of Customs and Ministry of Agriculture and Livestock Development.
The last time the treaty was revised was in 2009.

Government commits to strengthening custom, border administrations

The government has reiterated its commitment to strengthen and make customs and border administrations effective.
Addressing a seminar 'custom management' organised by Department of Customs (DoC), here today, Finance Minister Dr Yuba Raj Khatiwada said that the government is developing technology and infrastructure in every customs office, and also ring legal and structural changes to boost entrepreneurship and economy.
Urging the private sector to contribute to the building of national capital, he also said that public-private partnership is needed to expedite industrialisation. “The private sector should boost industries and entrepreneurship by investing in protected areas,” he said, asking the concerned authorities to do their best in controlling smuggling activities.
On the occasion, finance secretary Rajan Khanal said that the government has brought a policy to develop a transaction-based custom service, whereas director-general of the department Rameshwor Dangal informed that a total of 24 custom offices across the country had been developed as operating transaction banking.

Trade deficit hits at Rs 1.21 trillion

On soaring import bills, the trade deficit is going to equalise the annual budget in the current fiscal year as the trade deficit has widened by 17.40 per cent to Rs 1.21/9 trillion – surpassing the revised annual budget of Rs 1.2 trillion for the current fiscal year – in the first 11 months of the current fiscal year compared to the deficit of Rs 1.03 trillion in the same period of the last fiscal year. The trade deficit totalled Rs 1.16 trillion in the last fiscal year 2017-18.
A trade deficit is the difference between a country's export earnings and import expenses. According to the Department of Customs (DoC), Nepal’s foreign trade reached Rs 1.38 trillion – in the 11 months between mid-July and mid-June – which is an increase by 17.50 per cent compared to Rs 1.18 trillion in the same period of previous fiscal year. “The imports have a 93.7 per cent share in the total foreign trade whereas exports have only 6.3 per cent share,” the department data revealed, adding that Nepal imported goods worth Rs 1.29 trillion – some 17.45 per cent more than the imports in the 11 months of last fiscal year when it had imported Rs 1.10 trillion – whereas compared to imports, the ratio of exports is very low. “In the 11 months of the current fiscal year, Nepal’s export earnings swelled to Rs 87.83 billion as it is an increase by 18.18 per cent compared to the same period of the previous fiscal year.”
According to the department, Nepal exported merchandise worth Rs 74.32 billion in the 11 months of the last fiscal year. “The import-export ratio at the moment stands at 1:14.8, which means for every rupee of goods exported, Nepal imports goods worth Rs 14.8.”
The import-export ratio stood at 1:14.9 in the same period of last fiscal year, the department data revealed.
According to the customs statistics, Nepal enjoyed a trade surplus with only 21 countries among its 155 trading partners. However, among the 155 trading partners, the trade deficit is highest with southern and northern neighbours. Nepal faced a trade deficit worth Rs 785 billion with India in the first 11 months as it imported goods worth Rs 841 billion from India and exported only Rs 56.5 billion to the southern neighbour. Likewise, the trade deficit with China stands at Rs 184 billion as it imported goods worth Rs 186 billion from China and exported only Rs 1.96 billion worth goods to the northern neighbour in the 11 months of the current fiscal year.
Petroleum is the largest import of Nepal as usual. The country imported Rs 231.72 billion worth petro products including mineral oils, bitumen and mineral waxes. Likewise, the iron and steel import bill came to Rs 132.30 billion and Nepal paid Rs 109.87 billion on importing machinery and mechanical appliances, the department report revealed, adding that imports of vehicles and parts and electrical equipment stood at Rs 84.42 billion and Rs 81.71 billion, respectively. “Nepal imports cereals worth Rs 47.97 billion.”
Similarly, Nepal's largest exports were animal or vegetable fats and oils and related products worth Rs 10.99 billion. Export earnings from man-made fibres including acrylic yarn totalled Rs 9.03 billion, and revenues from the export of coffee, tea and spices amounted to Rs 7.61 billion. Exports of woolen carpets and flooring materials were worth Rs 7.05 billion whereas Nepal earned Rs 5.43 billion from the export of iron and steel.

Customs duty makes books expensive

After the government introduced a new tax provision for imported books, it has become expensive hitting not only the students but also a reading culture.
The budget – brought by the finance minister Dr Yuba Raj Khatiwada – for the next fiscal year has mandated a 10 per cent customs duty on all imported books. Earlier, there was never a tax on the imported books, especially schoolbooks – according to UNESCO’s Florence agreement, which prohibits customs duties on the import of books and publications that can be classified as educational, scientific and cultural – as Nepal is also one of the signatory of the agreement. The government’s new move, however, contradicts the UNESCO’s Florence agreement, affecting thousands of students.
Though the tax will be applicable to the books published only in foreign countries, most of the books used in the schools and colleges are imported. According to director of the Department of Customs Shishir Ghimire thefe should be tax on finished goods – imported books – as there is a tax on raw materials like papers for publishing in Nepal.
Due to no tax on imported books, most of the domestic publishers lately have started printing the books in India and bring it back to the market, which according to some domestic publishers, is hitting the domestic publishing business very hard.
The government wants to promote the publishing industry in Nepal, according to Ghimire, who, like some domestic publishers, think that the printing Nepali books in India, though a recent trend, has hit the domestic publishers. Currently, a majority of Nepali publication houses print their books in India, as it is cheaper than to print in Nepal, according to them.
But those publishers – who are opposing the government decision – are afraid that the customs duty will hit the reading culture among young people. “A reading culture was finally emerging in Nepal, but the added customs will again discourage them,” a publisher said, adding that there are very few libraries that could encourage reading culture.
The National Booksellers' and Publishers' Association of Nepal (NBPAN) said that the government move will encourage piracy. Protesting the government move of customs duty on all types of books, including schoolbooks, the association has decided to halt imports of books for the time being. The association also blamed the government for not consulting them before bringing the new law. “We found out only when transportation companies informed publishers about the new price in the invoices for future shipments,” the association added.

Chinese firm signs contract to build dry port in Timure

Nepal Intermodal Transport Development Board signed an agreement today with a Tibetan construction company to construct the dryport at Timure of Rasuwa district to help ease bilateral trade via land route with the northern neighbour. 
The inland container depot – to be constructed with Chinese aid – is expected to cost 124 million Yuan.
Deputy director of the board Harey Krishna Mishra and project manager of the Chinese company Yang Enlin signed the agreement to construct the project that is expected to be completed in the next 30 months. Under the agreement, the Chinese government appointed company will construct the dry port on five hectares of land in Timure Rural Development Committee. The government has already acquired the land to construct the structure, a parking yard with capacity to park 350 trucks and containers.
The Chinese company will also construct a five-storey administrative building in 5,000 sq m of land. The building will incorporate a fire fighting system, a quarantine office, a customs office, banks and post office. “The dry port will house two customs clearance chambers built in an area of 2,080 sq m and a 750 sq m parking yard, cargo warehouse and litigation warehouse,” according to Nepal Intermodal Transport Development Board.
According to a civil engineer of the NITDB Pramod Acharya, the board will only facilitate the construction process. “The Chinese construction company will build the dry port in two phases,” he said, adding that the design of the works to be completed in the first phase has already been approved by the Nepali and Chinese governments. “The design of the dry port was designed earlier on January 15 in Chinese city of Chengdu. The design of the project has been prepared by Architectural Reconnaissance and Design Institute of Tibet.”
Nepal and China, in April 2015, signed memorandum of understanding (MoU) to construct the dry port that will be at 2.5-km distance from the Nepal-China border. The Nepal Intermodal Transport Development Board, in association with the Architectural Reconnaissance and Design Institute of Tibet Autonomous Region, had finalised the design of the dry port in 2016.
The port will not only reduce overhead costs, promote competitive transport services and open opportunities to private sector operators through their involvement in management and operation of the dry port but will also help reduce the whopping trade deficit.
The dry port at Rasuwagadhi will be the second of its type that the northern neighbour has been constructing for Nepal as athe first one that has been under construction at Tatopani is almost at the final stage of completion.
The Rasuwagadhi customs point is not only an alternative gateway to China also due to damage of Arniko Highway – linking the Chinese border further east – because of devastating earthquake in 2015.