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Kathmandu Monday July 03, 2000 Ahsad 19, 2057.
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SAD severely affects exports to India
By Gopal Devkota
BIRGUNJ, July 2 - Nepal’s export to India dipped since
India began to impose four percent special additional duty (SAD) on all its imports.
India on February 29, 2000 announced in its budget to levy
four percent additional duties on all imports with a view to protect its industries.
Except vegetable ghee, Nepal exported various products worth
841 million rupees during November 17 to December 15, 1999 and goods worth 859 million
rupees during December 16 to January 14, 2000 through Birgunj Customs point.
Similarly, barring vegetable ghee, different goods worth 689
million rupees was exported to India from Nepal through the customs point during January
14 to February 11, 2000, before India imposed the additional import duty.
But following the imposition of SAD effective from March 1,
2000, Nepal’s export to India has witnessed a nose-dive. Nepal exported goods worth
587 million rupees during February 13 to March 13, and goods worth 548 million during
March 14 to April 12, 2000 through this customs point excluding vegetable ghee.
The downward trend in the export business to India has not
only worried the businessmen and the government but also the entire Nepalis.
Executive Manager of Mahalaxmi Finance Ramesh Bhattarai says
the special additional duty imposed by India on the import has affected all Nepalis. If
India is really a friendly neighbour of Nepal, it should immediately remove the four
percent additional duty, he says.
Ashok Baidya, an industrialist expresses the view that the
imposition of SAD has badly affected Nepal in its industrialization process.
Before 1996, it was difficult for Nepalese products to enter
into Indian market as India had set a tough provision to discourage Nepalese export to
India. Later it adopted a much liberal policy and made an agreement with Nepal
accordingly, which increased the flow of Nepalese goods to India.
Nepal’s export business, which began from a modest one
billion rupees mark four years ago has increased by almost 50 percent during the first
nine months of the fiscal year 1999/2000.
According to statistics provided by Birgunj Customs Office,
Nepal exported goods worth 4 billion and 410 million rupees during the first nine months
of fiscal year 1997/98 and goods worth 6 billion and 810 million rupees during the
corresponding period of the fiscal year 1998/99. This clearly shows that SAD has scaled
down Nepal’s exports to India.
The then Indian Ambassador to Nepal KV Rajan while visiting
this border town three months back had claimed that the Mahakali Treaty and the Trade
Treaty of 1996 between Nepal and India were the epic achievement of his five year tenure
in Nepal.
The Trade Treaty has a provision that India will impose no
duty on the goods imported from Nepal. But the imposition of the four percent additional
duty has questioned Rajan’s credibility.
The additional duty imposed on the exported goods from Nepal
has weakened the competitive edge of Nepalese products resulting in the decline of export,
say industrialists.
"SAD should not be imposed. There is no provision of
such imposition in the Treaty. This is the big brother attitude of India. It should be
removed," says Babu Lal Chachan, President of Birgunj Chamber of Commerce.
To impose four percent additional duty is to indirectly block
Nepal’s export to India. Nepalese industries cannot vie with foreign goods on paying
four percent extra duties, says Chachan.
General Secretary of Birgunj Chamber of Commerce and promoter
of Tribeni Group Birendra Sanghai says India has been levying SAD going beyond the Trade
Treaty but Nepal could not raise the issue. This is worrisome. It has affected the entire
nation yet the government has not been able to convince India to remove it. This is sheer
incompetence of the government, says he.
But government officials say they have raised the issue.
Chief Customs Officer Ishwore Pokharel says the Prime Minister himself had raised the
issue with Brajesh Mishra, special advisor to the Indian Prime Minister, during his visit
to Nepal. According to Pokharel, Ambassador Rajan and Mishra had said that SAD had to be
reviewed.
Whatsoever arguments, SAD collection still continues and
government has made no effort to remove the additional duty, complain industrialists.
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