Impact of Indian budget on Nepal: If diplomatic initiatives are not increased, imports will increase and exports will shrink




Eastern  businessmen have said that a diplomatic initiative is needed as the new budget of India has increased imports and shrunk exports for Nepal. They argue that Nepal can benefit if it takes the initiative.

They also said that Nepal should learn a lesson by looking at the facilities provided by the Indian budget to the agricultural sector and farmers. Finance Minister Nirmala Sitharaman had presented a 'paperless' budget in the parliament on Monday. Reacting to the budget, the former industrialist said that the import of food grains, vegetables, fruits and meat would increase further if Nepal could not provide facilities and facilities to the agricultural sector and farmers.



Avinash Bohara, central member of the Federation of Nepalese Chambers of Commerce and Industry, says that India's budget aims to double the income of farmers will also be a lesson for Nepal. India's budget has allocated Rs 27.1 lakh crore in a self-reliant package to double farmers' income.

"Nepali products have never been able to compete as Indian agricultural produce has become cheaper due to the facilities and concessions provided by the government there," said Bohara. At the same time, the government should fix the support price of agricultural produce in time and make arrangements for its purchase.

He stressed on the need for the government to be involved in the procurement of farmers' produce and suggested that the three-tier government should coordinate with each other for this.

Pradip Murarka, vice-president of the industry association Morang, said that the recently presented budget of the Indian government has encouraged to increase the production of computer, laptop and mobile parts in the country.

"The budget has slightly increased the import duty on electronic components to be manufactured in India," said Murarka. "This will immediately lead to a slight increase in the prices of electronics, including laptops, computers and mobiles." He said that the gray market has affected the sales of laptops and mobiles in the border areas of Nepal.

Secretary of the Morang Trade Association Anil Sharda stressed that Nepal should also learn from India's faceless budget and increased good governance in the tax system. Discussing that the tax system in India has also gone to faceless system, he said that it is a great achievement of India that the taxpayers can get the tax assessment done online from home.

"Corruption in tax assessment seems to be controlled by the new system," he said. "Similarly, revenue offices in India will no longer be able to open tax assessment files for more than three years." Earlier, the revenue body was given the right to open files up to six years ago.



Entrepreneur Sharda said that in Nepal, taxpayers generally have to keep accounts up to six years ago and the revenue office can open files up to four years ago.

He said, "But in case of doubt, there is a legal provision that the revenue body can open any file with the permission of the director general." Because of this, taxpayers are always under mental pressure. '

Bipin Kabra, executive member of the industry association Morang, urged the government of Nepal to take initiative with India to open the export of palm oil as India's budget has increased the import duty on crude palm oil.


According to entrepreneur Kabra, the import duty on crude palm oil in India was 30.25 percent earlier. Finance Minister Sitharaman has increased it to 36.62 percent. As a result, the import duty on one metric tonne of crude palm oil has increased by Rs 4,765. Nepal can take advantage of this. But it requires strong diplomatic initiatives.

Crude palm oil is imported from Malaysia and Indonesia. The budget has also slightly increased the import duty on raw soybeans in India by 1 percent. Earlier, the import duty on crude soybean oil was 38.5 percent. 39.5 percent has been made in the new budget. Due to this, the import of 1 metric tonne crude soybean oil has increased by 832 rupees. Crude soybean oil is imported from Argentina, Ukraine and Brazil.

Nepalese businessmen were exporting palm oil to India at zero percent customs duty under the SAFTA agreement. But the annual turnover of more than Rs 25 billion has stalled since the Indian government banned exports from Nepal last year.

According to industrialist Kabra, 9 million metric tonnes of refined palm oil is imported to India every year. Out of which, maximum 2.5 to 4 lakh tons will be exported from Nepal. Such a small share of exports has no effect on India's economy.