KATHMANDU, Aug 2: India has imposed 5 percent excise duty on metal products making it difficult for Nepali metal products to compete in the Indian market.
The decision goes against the Indian budgetary announcement of imposing 1 percent excise duty on metal products.
In its budget for fiscal year 2011/12, the Indian government had announced one percent excise duty on 102 items, including metal products. The decision affects export of Nepali brass, copper and aluminum products to India.
Hit hard by the unexpected duty hike, metal exporters have approached the Ministry of Commerce and Supplies (MoCS), seeking the latter´s initiative to resolve the issue. Bijay Metal Industry (BMI) -- one of the leading exporters of metal products -- has formally requested the ministry for diplomatic initiative to end the problem, a high level source at the MoCS told Republica on Monday. The Nepalgunj-based firm has been producing metal utensils from its four manufacturing units in Surkhet Road.
“We have received information about India imposing additional excise duty on other commodities as well. We will raise the issue in the upcoming Inter-Governmental Meeting (IGC) with India," said the source.
Kanhaiya Lal Baidhya, proprietor of BMI, said fresh rise in excise duty by India will has discouraged Nepali metal producers. “My firm had exported metal products worth Rs 200 million to India last year. But rise in excise duty has made our products expensive in the Indian market,” Baidhya added.
According to Baidhya, Nepali metal producers have been maintaining value addition of more than 30 percent. Nepal exported copper and articles worth Rs 1.46 billion during the first eleven months of the fiscal year 2010/11, a rise of 1.5 percent over the corresponding period last year. Nepal had imported copper and articles amounting to Rs 2.3 billion and aluminum worth Rs 2.41 billion during the first eleven months of the fiscal year 2010/11, a rise of whopping 78.4 percent and 37.5 percent respectively over import figures of the same period of 2009/10. Nepal had imported aluminum and articles worth Rs 2.2 billion in 2009/10.
Source : www.myrepublica.com