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Open Border Increasing Unofficial Trade

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Open Border Increasing Unofficial Trade
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May 3: Unofficial trade is occurring due to open border with India and time-consuming customs procedures.

According to a research recently conducted by South Asia Watch on Trade, Economics and Environment (SAWTEE), the unofficial trade between Nepal and India is equivalent to a large portion of the official trade between them. The research shows that the import of agricultural products is very high in such official trade.

 This was revealed in the report released at a programme on May 2, which said that 35-40 percent of the total unofficial trade is covered by import of agricultural products alone.

According to Dr. Posh Raj Pandey, President of SAWTEE, various types of agricultural products are being imported such as seeds, chemical fertilizers, equipments in Nepal in an unofficial manner.

Pandey said, “After the government restricted import of many agricultural products, such products are being imported unofficially. Agricultural seeds are being imported in large amount from India in this way.”

The report shows that out of the total import of seeds, around 20 percent is imported through unofficial channel. Similarly, the speakers of the program said that every year, agricultural equipments worth Rs 10 million are being imported unofficially in the country.

Yogendra Kumar Karki, Spokesperson of the Ministry of Agriculture Development informed that due to the high cost in import of goods through official medium and problems of quarantine test, unofficial trade is rising.

“Due to lack of storage, agricultural products are going out of the country after the production and these very products are being imported later from other countries”, he added. He admitted that due to lack of government grant in Nepal unlike in other countries, the agricultural products are being imported from India in low prices.

Rabi Shanker Sainju, Spokesperson of the Ministry of Commerce said that despite strong government policies related to agriculture sector, the unofficial trade is taking place as the implementing agencies are not strong. Sainju says, “Unofficial import is increasing also due to weak distribution channel as well as unavailability of quality and competitive products in Nepal.”

According to expert Purushottam Ojha, the main reason behind increasing unofficial trade is open border between Nepal and India. “If the government provides grants in agricultural products, unofficial trade in the border will be automatically minimized”, he added.

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