They complained that the provision fixed by the Nepal Rastra Bank (NRB) that only certain goods could be imported by using foreign convertible currency has caused difficulties to them."We are paid in dollars when we export the same goods to third countries but in the case of Nepal we have to accept Indian currency," Mukesh Saha, who runs a food manufacturing factory in Gujarat, said. This provision discourages the businessmen who want to carry out transaction in foreign currency to export goods to Nepal, he added.
The NRB has issued permission for opening LC in the convertible foreign currency in the export of 161 different goods from India to Nepal. NRB Deputy Director Pitambar Pokharel said the NRB has issued directives to carry out transaction in the Indian currency while importing goods other than these 161 items from India.
The NRB has specified that LCs could be opened in convertible foreign currency for the import of various goods including chemicals used in clothes and detergents, rubber, and the chemicals needed by the liquor industry as raw materials which can be borne by up to 50 per cent of the export company's convertible foreign currency earnings.
Proprietor of the Amida Pharmaceuticals Company and the chairperson of the International Trade Committee of the Gujarat Chamber of Commerce and Industry, Bhagyash Soni, said that since Nepal and India have many commonalities, trade and commerce should also be based on commonality.
"Prime Minister Narendra Modi has written a new history by visiting Nepal after 17 years since his predecessor's visit, and his visit should be utilized to the maximally for the development and promotion of trade and other bilateral ties between the two countries," Soni said.
President of the Gujarat Chamber of Commerce and Industry Rakesh Saha said that Nepal could benefit much from the economic progress made by Gujarat, adding that the Indian business community was willing to partner with the Nepali counterpart in boosting trade between the two countries.
He stressed on the need of channeling the centuries-old relations between Nepal and India towards joint investment. Saha also suggested the Nepali business community to take initiatives for increasing the threshold of the payment in the convertible foreign currency.
As per this provision of NRB, the Indian side would be benefited by the transaction in Indian rupees at a time when the exchange rate is stable and would bear losses in case of fluctuation in dollar rate.
Former President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Anandaraj Mulmi, said that it was not at all surprising for the Indian businessmen to wish for carrying out transactions in convertible foreign currency in exports to Nepal, in the context of their importing in convertible foreign currency from third countries.
Mulmi also clarified that it was the first priority of Nepal to pay attention regarding the likelihood of the country's foreign currency reserves plummeting if all ask payment in dollars at a time when Nepal has been bearing a huge trade deficit with India.
Bindu Kumar Thapa, President of Pokhara Chamber of Commerce and Industry, who came to visit and study about the industrial development in Gujrat, urged the Indian side for the investment as there was immense possibility of different sectors including hydropower, tourism and tourism related sectors in Nepal.
He stressed that both sides should pay attention to increase the trade rather than thinking about in which currency the payment is made.
India occupies 66 per cent of the total goods imported to Nepal from third countries. A statistics released by the Nepal Rastra Bank states that Nepal has been bearing trade deficit of 1.4 billion US dollars every day with India.
At a time when the trade deficit rate is 5.9 per cent with other countries, Nepal is bearing the deficit rate of 14.2 per cent with India. RSS
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