200 Nepal-bound imported autos stuck at Kolkata port

KATHMANDU, JUN 08 - 2013

Indian authority’s notification to Nepali importers of third country ( other than India) vehicles that they should either use rail wagan or container to deliver the vehicles to Nepal   has  resulted in piling up more than 200 Nepal-bound vehicles  at Kolkata port for one and half months.

Officials of the authorised dealers of cars made in countries other than India said that imports from brands like Toyota, Skoda, Mazda, Ford, Kia, Nissan, Mitsubishi, Hyundai and Chevrolet, among others, have been stranded at the port since April 23. They said that the delay had caused them massive losses.  

Normally, vehicles imported from third countries arrive at Kolkata port by ship and are driven to Nepal. After they clear customs at the border, they are again driven to their respective showrooms or godowns. “We have been in talks with the government and the Indian Embassy to resolve the issue as soon as possible. We have learnt that the Ministry of Finance has written to the Indian Finance Ministry,” said Suraj Vaidya, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Vaidya’s firm United Traders Syndicate imports Toyota automobiles from Japan.

A Commerce Ministry official confirmed that a letter had been sent to the Indian authorities through the Ministry of Foreign Affairs.

Meanwhile, according to Vaidya, around 80 Toyota vehicles have been stranded at Kolkata port . “It is very difficult to bring vehicles to Nepal by using carriers. The existing system of driving imported vehicles to Nepal must be continued.”

Similarly, Saurabh Jyoti, president of the Nepal Automobile Dealers Association (NADA), said the harsh directive from the Indian authorities is difficult to follow since Kolkata port lacks essential equipment like cranes and ramps.  

“From the perspective of both cost and infrastructure, I think the current way of importing vehicles should be continued,” Jyoti added.

“If we were to transport cars to Nepal by vehicle carrier, the cost would go up by at least Rs 150,000 per unit.” He said that customers, who are already paying 248 percent import duty on motor vehicles, would be hit hard by the additional cost.

As imported vehicles are stuck at Kolkata port , Nepali dealers are having a hard time explaining things to their customers. “If the situation continues any longer, we might not be able to deliver vehicles on time to customers who have booked them,” said Mahesh Dhakal, senior sales and marketing officer of the Padmashree Group, the authorised importer of Mazda cars from Japan. According to him, around 16 Mazdas are stuck at Kolkata port .

Source: The Kathmandu Post

Trade deficit with India increases

KATHMANDU, DEC 13, 2012

In the first three months of the current fiscal year, total trade deficit with India has increased to 42.7 per cent.

“Trade deficit with India has increased by 42.7 per cent during the review period in contrast to a decline by 1.2 per cent in the same period last year,” states the central bank data.

Meanwhile, total trade deficit with other countries increased by 37.5 per cent as compared to an increase of 27.7 per cent during the same period the previous year. Total trade deficit during the first three months has increased by 40.8 per cent to Rs 115.75 billion.

According to the central bank’s review of the first three months, total export to India increased by six per cent as compared to an increase of 12.9 per cent the previous year. The export of GI pipes, jute sackings, polyester yarn, textiles, juice and pashmina, among others, increased to India. Whereas the export of handicraft goods, readymade garments, paper, pulses, etc, observed a fall during the first three months.

Meanwhile, total imports from India went up by 36 per cent during the review period as compared to an increase of 1.1 per cent in the same period last fiscal year, states the central bank data.

According to it, imports from India has increased primarily owing to an increase in the import of petroleum products, MS billet, chemical fertilisers, cement and rice, among others.

Exports to other countries increased by 31 per cent as compared to a slight increase of 0.6 per cent in the same period of the previous year. Likewise, exports to other countries went up primarily due to an increase in the export of pulses, tanned skin

and readymade leather goods, among others.

Imports from other countries increased by 36.3 per cent as compared to an increase of 21.9 per cent in the corresponding period of the previous year.

Imports from other countries increased mainly because of an increase in the import of pipe and pipe fittings, telecommunication equipment, gold, readymade garments and edible oil, among others. Due to the increase in imports, the ratio of exports to imports declined to 15.2 per cent in the review period from 18 per cent a year ago.

Source: THT

Nepal to raise trade deficit issues in secy level meet

KATHMANDU, AUG 13, 2012

Nepal is expected to raise the issues of reducing trade deficit between Nepal and China with top priority during a meeting of the Nepal-China Foreign Secretary Level Mechanism scheduled to be held in the capital on Monday.

Talking to RSS, Joint Secretary at the Commerce and Supplies Ministry Ngaindra Prasad Upadhyay said at the meeting, the Nepali side is expected to raise the issues regarding how to minimize an enormous trade imbalance between the two countries.

The Chinese side will be requested to make arrangements for smooth export of Nepali products to China, said Joint Secretary Upadhaya.

The State is responsible for ensuring duty free market and market facilitation, he said and stressed that the business community also pay a heed towards trade diversification since the conventional products are not sufficient for the development of trade sector.

According to Trade Promotion Center, annual trade deficit of Nepal with China stands at Rs. 45 billion. Nepal exports goods worth Rs. one billion to China every year.

Nepal imports cement, iron rods and noodles from Tibet, whereas it exports handicraft items, carpet, pashmina, silver ornaments, vegetable ghee and incense sticks to China.

Expansion of mutual contact, development of physical infrastructure, investment in hydropower sector, reopening of Kathmandu-Lhasa Bus Service, direct flights between different cities in the two countries and construction of a ring road in Kathmandu are other agendas of the meeting, it is learnt.

Providing soft loans for the Upper Trishuli-3 'A' Hydro Project and international airport in Pokhara are in the agenda of the meeting, the ministry said.

The Nepali team to be led by Foreign Secretary Durga Prasad Bhattarai will be accompanied by senior officers of the Ministries of Finance, Agriculture, Energy, Industry, Commerce and Supplies, Health, Home, Local Development, Education, Tourism and National Planning Commission (NPC).

As the meeting of the mechanism is regular, it will not take any decision and no agreement will be signed. It is learnt that the issues raised in the four- yearly meeting will be included in the future action plan by the officials of both the countries.

Source: THT

Trade deficit with China higher than overall rate

KATHMANDU, APR 28, 2012
Nepal’s trade deficit with China is growing faster than the country’s overall trade deficit, said South Asia Watch on Trade Economics and Environment (Sawtee).

According to a study conducted by Sawtee, the trade deficit with China has been growing at an average rate of 27.1 percent annually over the last seven years while the overall trade deficit has increased by 21.9 percent.

In the seven years since 2003-04, China’s share in Nepal’s global export and import has diminished to 1.4 and 11.7 percent respectively. This shows that Nepal’s exports to China have decreased by an average of 3.1 percent annually during the period. Likewise, the country’s imports from the northern neighbour has been increasing by an average of 3.6 percent annually over the same period. Earlier in 2003-04, China’s share in Nepal’s total exports and imports was 4.5 and 8.1 percent respectively.

The research study carried out by Tula Raj Basyal, former senior economic adviser to the Finance Ministry, blames various non-tariff barriers for the lower exports despite the special preferential tariff treatment for 4,721 products. “The value addition requirement of 40 percent is one of the major non-tariff barriers,” said the report. According to experts, a criterion of 40 percent value addition is unreasonable for an LDC like Nepal given its industrial capacity. “With our industrial structure and capacity, it is difficult to produce goods with 40 percent of value addition,” said Ratnaker Adhikari, an international trade expert. “Trade barriers in China like quarantine are pretty unpredictable.”

The report also attributes the deeper constraints in the supply capacity like reduced production and limited exportable surplus for Nepal’s growing trade deficit with China. It also blamed other factors including delays and higher transportation costs, delivery complexities like hassles at customs points, rising uncertainties and non-transparency of quarantine requirements, production of lower appealing items both in price and quality, and the government’s apathy towards improving trade relations.

The report recommends expanding production of products having higher value addition and possessing higher export potential to China. As per the report, vegetables, tea, iron and steel products, herbs, lentils, ghee, ginger, aluminium products, handicraft items and ornamental ceramic products, among others, have a higher market demand in China, and the export of these products should be increased.

The report has also recommended that the government ensure necessary infrastructure like roads, transport arrangements, container yards, quarantine facilities and technological improvements to minimize the trade deficit.

Tanka Karki, former Nepali ambassador to China, said that Nepal could benefit immensely from China if it promoted Buddhism and trade. He said the government should try to increase Chinese aid to Nepal and  encourage the Nepali private sector to work in cooperation with Chinese investors to invest in Nepal.

Source: Kantipur

Remittance flow climbs up 43pc to Rs 143b

Nepal saw a huge 42.5 percent rise in workers' remittances in 2007/08, as more Nepalis went overseas to work amid shrinking employment opportunities at home.
According to Nepal Rastra Bank's (NRB) annual report, the country's migrant workforce sent back Rs 142.7 billion during the last fiscal year. As swelling remittances boosted consumption, Nepal's imports grew 16.1 percent in 2007/08, overtaking the figure for the previous year.
"In total, Nepal's imports grew by more than Rs 30 billion and touched Rs 226 billion in the last fiscal year," says the NRB report released Friday. Of the total imports, purchases from India expanded by 24.7 percent, while imports from other countries rose by 3.5 percent.

The country's exports, however, continued to flounder as a result of internal and external problems. Consequently, total exports inched up a mere 2.4 percent to Rs 60.78 billion.

Moreover, exports to India declined by 7.4 percent in 2007/08. Exports to other countries increased by 25.5 percent. Higher imports and slowed exports widened the country's trade deficit to Rs 165 billion. The trade deficit with India alone amounted to Rs 105.9 billion.

A downturn in sales and restrictions imposed by India resulted in the production of vegetable ghee and oil, plastic products, garments and domestic metal products falling during the year. "That dragged down the country's manufacturing production index by 1.4 percent in 2007/08, compared to a growth of 2.6 percent in the previous year," says the report. The report added that prices of consumable goods and services soared 12.1 percent in mid-July 2008 compared to mid-July 2007. The average annual consumer inflation remained at 7.7 percent.

Among major products, oil and ghee prices went up by 21 percent, grain and cereal by about 15 percent and pulses by 14 percent. The prices of rice and rice products rose by 14 percent. The annual average prices of non-food items and services increased by 5.1 percent in 2007/08. With the improved law and order situation in the country, Nepal received Rs 9.8 billion worth of foreign direct investment commitments in 2007/08. Increased remittances also expanded the gross foreign exchange reserves to Rs 212.6 billion in mid-July 2008. Between mid-July 2007 and 2008, the Nepali currency depreciated by 5.33 percent vis-à-vis the US dollar. A year before, it had appreciated by 14.26 percent, according to the report.

Moreover, in 2007/08, NRB purchased Indian currency worth Rs 70.6 billion by selling US$ 1.37 billion, as the Indian rupee ran short in the market due to a widening current account deficit with India and the higher amount of payments made to the Indian Oil Corporation.