Kathmandu, March 21:

Unauthorised and informal import covers over 40 per cent of the trade amounting to Rs 33,000 billion. The informal import constituted about eight per cent of gross domestic product (GDP) and 24.76 per cent of total imports in 2003-04, stated a study carried out by Dr Rajendra Prasad Shrestha, associate professor at the Tribhuwan University for Anti Corruption Project of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

Presenting his paper ‘An estimate of informal and unauthorised imports from India’ Dr Shrestha said, “getting benefit from tariff difference with commercial purpose, avoiding customs complexities and fulfilling needs are major reasons of informal and unauthorised trade.” The customs revenue loss is expected to be somewhere between Rs 7280 million to Rs 9606 million and Birgunj has appeared as a major point for both formal and informal import from India.”

Shrestha also underscored a need for cooperation between different oversight agencies in controlling the informal and unauthorised trade. “With no adequate cooperation between the administration of Nepal and India, the unauthorised trade volume is ever increasing,” he said. “Large amount of revenue is evaded by underreporting of goods at custom points. Government’s tariff reduction policy has had negligible effect on smuggling. It means one of the reasons of smuggling is procedural complication in the formal route.”

“Open border has been a key for unauthorised trade,” said Aajad Shrestha, third vice-president at FNCCI. Preventing unauthorised trade would contribute in boosting industrial development, he said pointing the need for strengthening and updating of custom offices with modern technology to check such practice.