August 4: After the Indian government banned the export of rice other than basmati on July 20, its impact has also been felt in Nepal. Businessmen say that in order to avoid the shortage of rice, which is consumed more during the upcoming festival, the Government of Nepal should request the Indian government to supply 200,000 metric tons of rice immediately.

They have drawn the attention of the Ministry of Industry, Commerce and Supplies on this issue. Last year, India supplied 600,000 metric tons of rice to Nepal under a quota system. Last year's quota ended on August 1. The President of Nepal Rice, Oil and Lentil Industry Association Kumud Dugad has submitted a letter to the Ministry of Industry, Commerce and Supplies requesting the government to take diplomatic initiatives with India to arrange the supply of 200,000 tons of rice immediately to prevent rice shortage in Nepal.

Dugad said that Nepal needs to import 1 million metric tons of rice annually to meet the country’s domestic demand.

India exports paddy only to Nepal while it exports rice to other countries. New Delhi has imposed a ban on the export of rice citing the risk of food security. After this news spread, the price of rice in Nepal has already increased.

Dugad says that 200,000 metric tons of rice should be imported immediately as the country will harvest a new lot of rice only in November. He says that importing rice from India will benefit Nepal. "When rice is brought, 40 large and 500 small rice mills will be operated here, which will increase employment and revenue," Dugad said. India had previously imposed a 20 percent duty on paddy exports.

The people of Nepal consume around 2.5 million to 3 million metric tons of rice annually. According to the Ministry of Agriculture, Nepal had produced 5.5 million tons of paddy last year. Data how that the country imported rice/paddy worth Rs 33 billion last year.

So far this year, paddy plantation in the country is 25 percent less compared to last year. Experts say that if the weather is not conducive, paddy production might decrease.

A statement issued by the Nepal Rice, Oil and Lentil Industry Association on July 30 mentions that the association’s Annual General Meeting (AGM) has passed a resolution to request the government to take immediate diplomatic steps to import rice in order to prevent a shortage in Nepal due to India's ban on rice exports.

The General Assembly has also passed a resolution demanding only 1 percent duty on rice imports. The government has been imposing agricultural reform fee of 5 percent on rice imports. As a result food is becoming more expensive for the general public, the statement argued.

Last year, the Government of India had decided to allow the export of 600,000 tons of rice at zero percent export duty upon the request of the Government of Nepal. The 600,000 tons of rice have already arrived in Nepal.