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Nepali Industries Hit After India Taxes Paddy, Rice

Rice traders in Bara and Parsa industrial corridor have said the imposition of 20 percent customs duty on export of rice and paddy by India would have direct impact in the Nepali market.

Organizing a news conference here on Friday, the Birgunj Industry and Commerce Association said that as per a letter recently issued by India, it has fixed 20 percent customs tax rate on export of paddy and rice. Before this, it was customs tariff free.

Association said that the imposition of 20 percennt customs surcharge by India on rice and paddy export from there will hit the industries, consumers and the national economy. Nepal Rice, Oil, Lentil Industries Association central president Dr Subodh Gupta said India’s latest decision is not fair for the industries, traders, consumers and the market in Nepal.

Another rice trader Suresh Rungta worried that the consumers would be hit hardest due to the customs tariff imposed by India on paddy and rice export. He worried that this drastic decision by India might lead to a situation where rice mills in Nepal will get closed and thus called on government to address the problem at earliest.

Nepal has been importing rice worth over Rs 8 billion annually from India. Nepal imported 550 thousand metric tonnes paddy, 520 thousand metric tonnes rice and 50 thousand metric tonnes rice grits from India last year alone. There are around 2,500 rice industries across the country and half of these are closed, it is said.

Even those rice industries which are operating are not operating in their full capacity due to various reasons. The rice industries in Nepal have been producing 40 percent rice and the rest of the demand is met from imports from India.

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