Kodak Nepal still hopeful of preferential entry to India

By a Post Reporter

HETAUDA, July 21 - Kodak Nepal, an Indo-American joint ventue, which has suspended its production since last five months after India rebuffed its demand for duty-free-access to Indian market has kept its hope alive for the preferential entry.

"We hope India will provide duty-free-access to the photograhpic papers produced by Kodak Nepal after Prime Minister's upcoming visit," said a senior Kodak official, wishing to remain unidentified.

He also informed that the Company has already requested Prime Minister to raise the issue during his visit scheduled for coming month.

However, this will be our last effort and if India refused to budge from its present stance we would pack up and go, said he.

Since the company was established targetting the Indian market, there is no point in staying in Nepal without prefential entry to Indian manrket, said he.

Under Indo-Nepal Trade Treaty signed in December 1996, India grants dutry-free-acces to the manufacturing products of Nepal, except for three items_ cigarette, liquor and perfume_ enlisted in the negative list.

But India has argued that the photographic paper produced by Kodak Nepal is not a genuine manufacturing activity but simply a repacking of foreign imports. However, the Company argues production process in its plant in Nepal involves all the standard manufacturing activity.

Since the Company was established with prioir approval from Reserve Bank of India for equity participation of Kodak India, it is wrong to oppose its export after the comapny assumed productions, says the official. The Company is established with 80 percent equity participation of Eastman Kodak, USA, and 20 percent equity participation of its Indian subsidiary Kodak India.
Rabi Bhakta Shrestha, first vice-president of Federation of Nepalese Chamber of Commerce and Industry also says the prime minister should raise the issue with India during his visit. This issue is very sensitive to Nepal because the company's fold-up would send a negative message to the prospective foreign investors in the future. Since the Company was established with the government's approval it is the duty of the government to negotiate with India for a preferential entry to its product, says Birod Khatiwada, a lawmaker from Makawanpur District.

The Company, established with an investment of 370 million rupees, employees a total of 50 staffs. It has an annul production capacity of 22 million square metre photographic paper worth over four billion rupees. Out of one million square metre manufactured paper, the Company exported about ten thousand square metres to Singapore after Indian denial to import it on preferential basis.

Lubini Finance attots public share

By a Post Reporter

KATHMANDU, July 21- Lumbini Finance and Leasing Company Ltd today alloted its shares to eleven thousand public through lottry.

Out of 16535 applicants, only 11402 were lucky enough to win the share allotment.
The company had floated its shares for public issue on April 30. A total of 2,40, 000 shares were offered, of which 12,000 shares were reserved for employees in the Company.

Consumers indifferent to substitue drugs

By a Post Reporter

KATHMANDU, July 21 - Even after six months since the Department of Drug Administration announced stern action against substitution of the medicines, neither a single consumer has complained nor any chemist has stopped suggesting substitutions to the doctors' prescription.
The Department had called upon all the consumers to file their complain in the case of substitution of drug at the central or regional offices of the Department along with doctor's prescription and the bill of substituted drugs.

Despite the fact that substituted medicines may not fit to the patient, and may have adverse effect on human body, no consumer has filed complain against it.
However, pharmaceuticals and consumer's rights organization and consumers are worried that medicine substitution has not abated yet.

It is unfortunate that no application has been filed against it, says an owner of local pharmaceutical industry. The indifference of consumers and the concerned government authority has become counter-productive. This has further encouraged the illegal practice of drug substitution, he lamented.

Requesting anonymity, the owner of the pharmaceutical said that chemists sell substitute drugs because they are cheaper and have more profit margin to the retailers.

Harendra Bahadur Shrestha, President of Consumers Forum Nepal says druggists substitute medicines as people buy them in a hurry and they have no time to think about substitution.
The Department should not have published such an important public notice in an inner page of a newspaper with so small space. It has to be disseminated through radio, television and many other newspapers regularly, Shrestha said.

But medicine dealers say the whole chemists should not be blamed for a mistake made by a few druggists creating mistrust against the entire drug sellers. Action should be taken against those who substitute drugs, they say. Laxman Karmacharya of Shree Ram Pharma, Maharajgunj says most of the consumers are conscious and druggists too do not substitute drugs without their consent.
Doctors say that substitute drugs could be less effective, substandard and could have serious impact on public health. Matter of such a grave concern should not be taken lightly, they say.
Consumer's Forum's President Shrestha says Consumer's Act 2054 and Consumer's Regulation 2056 have already been enforced. Therefore, if the Act and Regulation are implemented effectively, such malpractices will be discouraged.

However, the Department claims that following their issuance of public notice, consumers have become aware and medicine sellers have been alert.

Dr Asfak Shekh, Chief Drug Administrator at the Department says they are conscious in checking such unlawful activities.

Replying to a query, Dr Shekh said consumers do not want to go against druggists and take filing complaint against drug substitution as an unproductive task.

Therefore, to stop the malpractice, the Department would soon send its inspectors all over the country and make campaign against drug substitution more powerful.

Milk price hike will benefit farmers: NDDC

By a Post Reporter

KATHMANDU, July 21 - Nepal Dairy Development Corporation (NDDC) has raised the consumer price of milk effective from Thursday in order to cover up its losses and to offer better price to the milk producers.

Krishna Prasad Sharma, General Manager of NDDC said, "In order to run the Corporation professionally, we have increased the consumer price of milk by two rupees a litre. Out of it, the Corporation will get 65 paisa per litre only". Of the rest, Re one will go to the farmers, 15 paisa to milk collecting cooperatives, 20 paisa to dairy booths.

Prioir to th eprice hike, the Corporation had been bearing a loss of 72 paisa a litre of milk, he said.

Generally, price is reviewed every year but we had been selling milk at 18 rupees per litre for the past two and a half year, he added.

The revised price of standard milk and whole milk stands at Rs 22 and Rs 26 per litre respectively.

We are forced to increase the price as the corporation is financially weak. We expect that the revised price will not affect the urban consumers much.

District Dairy Producers' Association Coordination Committees and Dairy Producers Cooperatives had earlier submitted a memorandum to the government to raise the consumer price of per litre milk by two rupees for which they had long been agatitating.

Meanwhile, Nepal Dairy Association has opposed the price hike in a press release issued here today saying it would hit the cinsumers.

Malpractice affects Indo-Nepal cross border trade

By Kavita Sharma

KATHMANDU - One of the most common features of all border transit points is the predominance of illegal trade, primarily accomplished with the help of police and border officials through extra-legal practices. The open border between Nepal and India is not immune to such malpractices. It not only facilitates free movement of persons and overall trade but also promotes activities against the interest of both nations, which results in huge revenue losses to both governments.

Formal trade relation between the two countries was established in 1951 with the signing of Trade and Transit Treaty. It was modified and renewed in 1961 and 1971, which incorporated provisions regarding transit facilities extended by India for Nepal's trade with third country, as well as on cooperation to control unauthorized trade mainly smuggling in of goods from third country to Nepal and India. Three different agreements signed in 1978, were modified significantly in 1991, to provide Nepal unilateral concessions by India. In December 1996, the Trade Treaty was renewed for a further period of five years with the provision of automatic renewal of the Treaty every five years.

Under the Treaty, India provides, on a non-reciprocal basis, duty-free access, without quantitative restrictions to the Indian market for all Nepalese manufactured articles barring a short negative list.
Though there are rules and regulations for Indo-Nepal trade, malpractices like bribery and others at both the Nepalese and Indian border check points are perhaps the most serious problem that the Nepali and Indian entrepreneurs have to face at the transit points. Most traders, except for a few, report of regular unaccounted payments i.e. bribe to the customs and police officials at the border check posts for all kinds of consignments, either legal or illegal.

Such illegal practice has become an established norm at all the border check posts. Such unaccounted payments are extracted from entrepreneurs on the pretext of checking bill of export, import license, prohibition or ban on various items, unpacking the whole consignment, plant quarantine, delaying in custom clearance procedure etc. Police and customs official do this primarily motivated by collecting money illegally. Pay them, they will not trouble you.

According to entrepreneurs, there is a sort of fixed rate per box of consignment, which again might vary upon person involved and the mood of these border officials. The Indian border officials are reported to be obstinate and rude, and imposing.

Businessmen say once the police knows that the consignment belongs to a Nepali trader and/or is headed for Nepal, they try to extract money in the name of security checks, ban or prohibition on export trade, bill of exports etc. Businessmen grease the palms of check post officials fearing for the trouble that they might inflict upon them.

Though the government has abolished octroi tax, municipalities have been imposing the same amount of tax with various names, which is further causing problems in the cross border trade between Nepal and India.

Though imports for Nepal is facilitated by issuing Certificate of Origin by District Chambers, traders have to pay various forms of taxes as shipments cross a total of seven barriers in India, and at least five barriers in Nepal itself. By the time a truck loaded with merchandise/vegetables crosses the border and clears through both sides of the custom offices, at least Rs. 3000 is incurred in transaction costs that is clearly not recorded and therefore is unofficial.

All these procedural requirements are lengthy, bureaucratic and cumbersome, thus delaying the release of shipments. At many instances such bureaucratic confusions and delays have resulted in losses to importers (As per the report of Nepal Cross-Border Agricultural Marketing Policy Study).

It is thus important that the policies formulated by the government for facilitating trade and commerce are properly implemented and evaluated. The Trade Treaty between the two neighbouring countries need to be respected and stringent action taken against those officials found involving in illicit dealings, which presently is causing a lot of impediments in the daily course of business at the borders.