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The racket surfaced after Siddharthanagar Chamber of Commerce and Industry (SCCI), which received an order from the Ministry of Agriculture and Cooperatives (MoAC) to issue a certificate of origin (CoO), a mechanism that certifies that the goods in question are produced in Nepal, declined to comply. [break]
MoAC, allegedly under direct instructions from the minister, asked SCCI last month to issue a CoO for 3,000 tons of betel nut of unspecified origin and owned by the trading firm Excel Trading Concern (ETC). At the present market rate, the consignment’s value is estimated at Rs 900 million.
“A trader approached us along with the letter from the ministry and sought a CoO, but we declined to comply as he failed to disclose the origin of the beetle nut,” Mahendra Kumar Shrestha, president of SCCI, told Republica over the phone.
SCCI had sought clarity over the origin of the betel nut mainly in view of the fact that Rupandehi, where Siddarthanagar is located, is not a beetle nut producing district.
Senior officials at MoAC, who are familiar with the development, acknowledged that the ministry had issued such a letter as per the instruction of Minister Datta.
When Republica contacted him, Datta flatly denied having any links with the racket or assisting it in smuggling betel nut to India. But he did not deny that he had instructed officials to send a letter to SCCI urging it to issue a CoO to a private firm. “I sign more than 100 letters a day that come to me and I hardly get time to go through them,” he said.
However, at the beginning of his conversation with this reporter, he declined to admit that he had issued any instructions in this regard to the officials concerned.
“I believe officials at the ministry do things as per the established norms and laws,” he said when asked why he had bypassed the normal process for issuing the CoO.
“After receiving the request from the private firm, I had just instructed the officials to take necessary action as per the established practice, which means that the officials were free to take a decision as per standard practice,” Datta said.
Illicit outflow of imported betel nut from Nepal to India has been on the rise in recent years as India imposes customs duty of 108 percent on its import from Indonesia, the main exporting country, whereas the duty on betel nut imported from Nepal is just 25 percent.
In Nepal betel nuts are produced only in the eastern districts, including Jhapa, Morang, Ilam and Sunsari. Statistics at MoAC show that total production of beetle nut in the country in 2010/11 was recorded at 7,247 tons, and in the same year Nepal had imported more than 108 thousand tons of beetle nut.
Dr Hari Dahal, joint secretary at MoAC, said, “There is no data available showing the amount of domestic betel nut consumption.” He further added, “When we don’t know the amount of domestic consumption, we can’t say how much of the total import is consumed in the country.”
India has constantly raised the issue of illicit export of beetle nut from Nepal at Inter-Governmental Committee (IGC) meetings. India had claimed at an IGC meeting held in 2010 that Nepal exported 165 thousand tons of beetle nut in 2008/009.
Moreover, India had requested Nepal at an IGC meeting held in Delhi in March 2011 to increase the tariff rate on betel nut imports.
Indonesia, Thailand, Malaysia and Turkey are the main countries from where Nepali traders import beetle nut.
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