Nepal

Import ban amp;#039;govt amp;#039;s knee-jerk reaction amp;#039;

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KATHMANDU, MAY 2The government recently decided to ban import of non-essential items listed under 10 categories to narrow the country's trade deficit and shore up foreign exchange reserves. Govt restricts import of 10 'non-essential' items Trade deficit widens further to Rs 1.31 trillion The move, however, has drawn flak from experts and consumer rights activists. They have called it a knee-jerk reaction that lacks clear logic."There doesn't seem to be any rhyme or reason to the ban list," said Prem Lal Maharjan, president of National Consumer Forum, lamenting that except for automobiles, the other products on the list, such as snacks and cellphones were immaterial."What's the point of banning imports now, when we have only a little over two months left in the fiscal?"Issuing a notice on Nepal Gazette on April 26, the Ministry of Industry, Commerce, and Supplies had announced that import of 'luxury' items had been banned for the rest of this fiscal, which ends in mid-July.

Along with all types of alcohol and tobacco products, large-engine motorcycles and mobile phones costing over $600, the ban also forbids import of toys, playing cards, and diamonds.

Also on the list of items prohibited from importing are snacks, such as Lays and Kurkure.According to Joint Secretary of MoICS Govinda Bahadur Karki, the government has banned only non-essential goods based on their import value and volume.

As for restriction on imports of Lays and Kurkure, he said it was also in consideration of the well-being of consumers as they were junk food.But consumer rights activists like Maharjan aren't quite convinced.

"The government decided to ban the import of certain 'junk food', but is allowing the import of more unhealthy products, such as paan masala?" he scoffed.Even if the import value of paan masala is lower than that of Lays and Kurkure, it is to be noted that there is no restriction on 'sugar confectionery', whose import value was much higher in the first nine of the current fiscal year.

The country imported 'sugar confectionery' worth Rs 649.81 million in the given period against Rs 587.61 million worth of snacks such as Lays and Kurkure, as per the Department of Customs.Calling the move 'short-sighted', Dilli Raj Khanal, an economist, explained, "Instead of focusing on strengthening the local production base and scaling up agricultural output, the government decided to ban import of certain 'luxury' items.It will only dent its own revenue collection."The private sector is also unimpressed with the government's approach of curtailing imports to control the dwindling foreign exchange reserves as 'it will result in uncertainty among the business community'.Director General of Federation of Nepalese Chambers of Commerce and Industry Gokarna Raj Awasthi said the government's decision lacked research and would create business insecurity.

A better option would have been to increase the import duty, added Awasthi.

Meanwhile, stating the ban was a stop-gap measure, MoICS Joint Secretary Karki said, "We realise we can't put such a ban in place for too long as it will affect the economy, which is why it is only a temporary measure to improve our situation."A version of this article appears in the print on May 03, 2022, of The Himalayan Times. .

This article first appeared/also appeared in https://thehimalayantimes.com 




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