Nepal’s 23 districts bordering India are up in arms over a directive from Kathmandu imposing a tax on goods of the value of Rs 100 and above being imported from India.
Kathmandu Post reports that the tax has always been on the books but was never implemented. Now the new government of Balen Shah is enforcing the tax, deploying revenue and customs inspectors and the armed police.
Reports speak of chaos and ugly scenes at border outposts as the government seeks to implement the order, and the people who are importing mainly small traders, object and fight back.
Kathmandu Post reports disputes over small everyday items being brought into the country, ranging from salt and sugar to rice, flour and cooking oil. Until the other day, these goods used to enter the country without any problem.
An important point is the price at which these goods are available in India, between 20% and 40% cheaper than in Nepal. This has been of great help to Nepali families as they are able to access cheaper goods across the border.
The paper quoted Shyam Prasad Bhandari, director general of the Department of Customs as saying that while earlier local officials were given discretion to overlook small items coming in from India, now the pressure from the government is to increase revenue.
Since the enforcement began, Indian border towns such as Sunauli and Nautanwa, which depend heavily on Nepali customers, have seen a noticeable decline in activity. Shops that once catered to daily cross-border shoppers are reporting fewer customers, reflecting the immediate economic impact of the policy.
In Nepalgunj, some business owners have welcomed the move, arguing that it could help them compete with cheaper goods from across the border. Chiranjivi Oli, vice-president of the Nepalgunj Chamber of Commerce, said local traders have long struggled to match Indian prices.
Purushottam Ojha, a former commerce secretary, wondered “whether such a low threshold is practical. If people can save significant amounts by shopping across the border, they will continue to find ways to do so. Enforcement alone may not achieve the intended results.”
