Entrepreneurs urge Indian quota cancellation

Biratnagar, May 2:

Entrepreneurs here have urged the newly-appointed prime minister Girija Prasad Koirala to take initiatives at the government-to-government level in cancelling the quota system that has been implemented by the Indian government on some of the goods being exported to India from Nepal.

The Indian government has fixed the quota for vanaspati ghee, copper wire, zinc oxide, and acrylic ya-rn for the last two years. Exporters have been bearing huge losses as the Indian government has implemented quota system after the expiry of Nepal-India Trade Treaty-1990. Pradip Murarka, proprietor of Shree Ram Refine Pvt Ltd, said, “We have been facing trouble since the quota system came into effect.”

“India had cancelled the quota system at the request of prime minister Girija Prasad Koirala for some time, in the past. Koirala has again been appointed the prime minister. So we are hopeful that he would request the Indian government to cancel the quota system,” he added.

India has imposed four per cent excise duty on various goods being exported from Nepal. “Entrepreneurs have been opposing such a practice and demanding cancellation of the excise duty,” said Jeevan Nepal, chairperson of Morang Trade Association (MTA). According to the entrepreneurs, the Indian government has fixed the quota of 0.1 million metric tonnes for vanaspati ghee, 10,000 metric tonnes for copper wire, 2,500 metric tonnes for zinc oxide and 7,000 metric tonnes for acrylic yarn.

Laxman Nebtiya, managing director of Swastik Oil, also requested the government to cancel the existing quota system. “The quota system has hindered the export of goods to India in sufficient quantity,” he said. “Meanwhile, only 250 metric tonnes of vanaspati ghee has been exported to India in the last three days,” informed, the office of certificate of rules of origin.

Dinesh Golchha, first vice-chairperson of MTA and proprietor of Arun Vanaspati Ghee Industry, said that they can export vanaspati ghee as per the quota fixed by Indian government, once the condition within the country improves. A meeting of Nepal-India Commerce and Industry Association, Department of Commerce and Nepal Vanaspati Ghee-Oil Production Association held a month ago, had agreed to export 0.1 million metric tonnes of vanaspati ghee by March 5, 2007.

The Indian government has assigned State Training Corp to manage the supply of vanaspati ghee. According to the accord, 0.1 million metric tonnes of vanaspati ghee would be exported to 21 states in India in four installments.

Among 18 vanaspati ghee-producing firms, five have already been closed, after the quota system came into effect. 13 industries, which are operational at present, have to supply the ghee amounting to around Rs 5 billion to India this year, said Ashok Murarka, chairperson of Morang Industry Association.