Automobile sector in crisis due to import ban

Published On: October 11, 2022 01:00 PM NPT By: Nagendra Upadhyaya


KATHMANDU, Oct 11: Traders and business people have claimed that the automobile sector is in crisis as the government has halted the import of four-wheeled private vehicles for about six months. According to NADA Automobiles Association of Nepal, the automobile sector has lost billions of rupees due to the ban on the import of vehicles.

As the foreign exchange reserves were depleting, the government banned the import of private vehicles (jeeps, cars, vans) from last May. NADA President Dhurav Thapa said that the automobile sector is in crisis after the business was halted. "Due to the import ban for six months, there has been a loss of billions of rupees," Thapa said. "Hundreds have been displaced in the auto business and thousands have lost their jobs."

Thapa said that due to the ban on import and the strictness of Nepal Rastra Bank (NRB), people who had invested in this sector are at a loss. "Many dealerships have been closed," Thapa said. “As people were unable to pay back the bank loan, they had to sell their land.”

The ban imposed by the government on private vehicles including jeeps, cars and vans since April 27 has been in force till October 14 due to pressure on foreign exchange reserves. The automobile sector is one of the major revenue-paying sectors for the government. Traders are demanding that the restrictions imposed by the government be lifted.

The business of about 9,000 private vehicles has been halted when the import has been banned for six months. The government collected about Rs 39 billion in revenue from private vehicles in the financial year 2021/22. When the import of vehicles is banned for about six months, half of the revenue of about nine and a half billion rupees is lost. The automobile sector has been contributing about nine percent to the total revenue.

Thapa said that most of the showrooms are closed except for two/three companies due to the ban on import for a long time. Thapa said, "We had faced a worse situation than during the time of COVID-19. Now, we demand immediate lifting of the import ban as the economy is getting better."

Similarly, he also complained that he has passed through a very difficult situation due to the policies and directives of NRB and the government. NADA has requested the government to lift the ban on private purpose cars, jeeps, vans and two-wheeled vehicles after October 14.

The auto-mobile sector pays twice as much revenue as the price raised at the customs points. Among the thousands of items that are imported into Nepal, vehicles like cars, jeeps and vans contribute more than double the revenue compared to other items. NADA claims that although the share of the auto sector in Nepal's growing trade deficit and export deficit is small, its contribution is very high.


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