Nepali vegetable ghee industry hit

Kathmandu, April 7:

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Chambers of Commerce (NCC) today urged the government to reduce the import tax on vegetable ghee industry’s raw material.

“If it is not reduced, the recent decision of reducing import tax on raw material for vegetable ghee in India will badly hurt Nepali vegetable ghee industry,” states a press release issued here by the umbrella organisation of Nepali private sector and Nepal Chambers of Commerce (NCC).

Issuing a press release,

the business organisation’s apex body and the NCC have stated that the Nepali vegetable ghee and oil industries would be severely affected as it can not compete with the Indian vegetable ghee in the Indian market.

The Indian vegetable ghee will be now cheaper than Nepali vegetable ghee.

“Exports to India will be practically impossible due to high price and quota system,” read their releases.

“Its government’s duty to protect Nepali vegetable ghee industry that has an investment of nearly Rs 10 billion and has employed 8,000,” the press notes state, adding that it would also have a negative impact on Nepali economy.

“It will not only create unemployment problem but also hits the revenue collection,” states the Nepal Chambers of Commerce press release.

“We want ‘Level playing field,” they demand. “We urge the government to immediately reduce the import tax to zero per cent on raw materials and concession in VAT.”

They also sought the dismissal of the quota system that has fixed the limitation to 1,00,000 metric tonnes of exports to India.

“The canalising system should be scraped,” they appeal the government asking it to scrap the import duty like India did on raw material for vegetable ghee.

A team of Nepal Vegetable Ghee Producers’ Association met Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry, the umbrella organisation of Nepali private sector and appraised him of the recent development.

Indian government has, starting from April 1, reduced the import tax raw materials of vegetable ghee to zero.

Recently, Arun Banaspati Ghee Industries and Narayan Vegetable Industries have already closed due to loan, increase in the cost of raw materials and problem in production.

According to the office in Biratnagar that issues certificate of origin, the export of vegetable ghee to India till March 13 this year is less than 50 per cent in comparison to the same period last year.

The export in the fiscal year 2063-64 stood at 17,848 metric tonnes (Rs 80,48,41,950). But its volume plummetted in the fiscal year 2064-65 to only 8,302 metric tonnes (worth Rs 45,37,63,000).

Currently, Pashupati Khadya Tel, Swostic Oil, Sriram Refinery, Manakamana Vegetable and Baba Vegetable are in operation in the eastern region. These industries used to produce upto 40 tonnes of vegetable ghee daily. Most of these industries’ target is Indian market.