October 14: Nepal Foreign Trade Association, the umbrella body of import businessmen, had demanded the government to lift the ban imposed on the import of four different items including vehicles such as cars, jeeps, vans; mobiles phones worth more than US$300; motorcycles of more than 150 cc capacity; and ready-made liquor.

The association issued a statement saying the government has not been able to meet the revenue collection target after banning the import of goods that generate more revenue while the businessmen who have invested billions of rupees are also suffering huge losses. The statement issued by the association reads, “All the banned items except vehicles and motorcycles are being smuggled through illegal channels. Considering this fact, the association strongly demands that the ban on the import of the remaining four items be removed as soon as possible.”

The government had imposed a ban on the import of 10 different items since May due to the pressure on foreign exchange reserves. Although the ban on import of six different items has already been lifted, the ban on the import of cars, jeeps, vans, mobile phones worth more than US$300, motorcycles of more than 150 cc capacity and ready-made alcohol still remains.

According to the association, the economic activities have decreased after the Nepal Rastra Bank adopted a policy of increasing interest rates to control inflation.

The statement further mentions that inflation has increased not due to internal reasons of Nepal, but due to external factors.

The importers drew the attention of the government that it has become very difficult to conduct business because of the increase in interest rates as per the directive of the NRB. The association opines that the Ministry of Finance and NRB should take appropriate steps to control this, reasoning that it is having a negative impact on traders, general public and government revenue. The association argued that there is high risk of the economy going into recession due to rising interest rates at a time when there is a decline in economic activities.

 The association stressed that the NRB should monitor the cooperatives, stating that the institutions involved in this sector are turning problematic one after another.

Stating that micro, small and medium enterprises have been unable to take loans from microfinance companies in sufficient quantity due to the provision that microfinance companies cannot invest more than a certain limit, the association also urged the government to remove such limit.