Indian Duty Hurting Pashmina Export .

KATHMANDU, Feb 23: India has continued to impose countervailing duty (CVD) on Nepali pashmina items, despite promising to revoke it a year ago, severely hurting export of this prime Nepali product to the southern neighbor.

“Indian customs continue to charge 10 percent CVD or Rs 180, whichever is higher, per piece of pashmina shawls, scarves, mufflers and other wool and fine animal hair products," said Pushpa Man Shrestha, president of Nepal Pashmina Industries Association (NPIA).


Unfortunate for the industry, the duty continues to remain in place despite the fact that India had promised to revoke CVD on all Nepali exports in a bid to give boost to bilateral trade, as promised in the bilateral trade treaty. The Indian government had expressed commitment to remove CVD during the visit of the former prime minister Madhav Kumar Nepal last year.

India, however, has waived off duty on readymade garments, another product which was hit hard by such a barrier.

Given the situation, pashmina entrepreneurs have knocked on the doors of Ministry of Commerce and Supplies (MoCS) to take initiative in raising the issue in the upcoming Nepal-India inter-governmental sub-committee (IGSC) meeting - a joint secretary level trade meeting. The IGSC is scheduled to be held from Feb 28 to March 1 in the Indian capital.

The NPIA made a formal request to MoCS last week, requesting the latter to take strong steps to make India live up to its promise by waiving off CVD on pashmina products, cashmere and jersey, swallow cardigan, waist-coat, pullovers and similar products.

According to Shrestha, India has slapped CVD on products that are covered in eight-digit harmonized system (HS) codes like 6214-20-10, 6214-20-20,6214-20-30, 6214-20-90, 6110-1100, 6110-1120, 6110-1190, 6110-1200 and 6110-1900. These codes include items produced from wool and fine animal hair.

NPIA General Secretary Vijay Kumar Dugar, who is involved in export of pashmina products to India, said Nepali pashmina has lost its competitive edge due to imposition of exorbitant charge in the name of CVD.

“Imposition of Rs 180 per piece CVD is very high as we supply pashmina muffler in the Indian market at Rs 800 per unit,” Dugar said, stating that exporters were paying as much as 22.5 percent of factory price as CVD.

“The duty has eroded our competitiveness, affecting our exports."

Records of Trade and Export Promotion Center (TEPC) show that Nepal´s pashmina exports dropped by 11.3 percent to Rs 683.71 million during the first half of the current fiscal 2010/11, compared to the figures of same period last year. Nepal had exported pashmina items worth Rs 1.31 billion during the fiscal year 2009/10.

Interestingly, Commerce Secretary Purushottam Ojha expressed surprise over the continuation of CVD on pashmina items. “The request of pashmina exporters took us by surprise, as there should not be CVD on any exportable items to India," he said.

Ojha said the Ministry would take up the issue with India seriously.

Source : myrepublica.com