In Nepal, betel nut consuming industries are limited. But the government has opened the way for unlimited betel nut import. What is this for? Stakeholders say, 'directly for smuggling.'

Nepal's customs policy in the matter of importing betel nuts from third countries and smuggling them into India has long been infamous. The government banned the import of betel nuts from March 24, 2076 after the illegal entry of betel nuts into India. A year later, on 9 Chait 2077, the complete ban was lifted and quotas were set for imports. After four years, the import quota of betel nut, banana and pepper has been removed by publishing a notice in the gazette on February 1. 

Now any trader can import as many betel nuts as he wants. But domestic demand for betel nut has not increased. Therefore, it is alleged that the government is trying to institutionalize smuggling. 

Four years ago, a limit was set for an industrialist to bring only 25,000 tons of betel nuts per year for industrial purposes. According to that, the import permit was given according to the 'procedure for managing the importation of betel nut, banana and pepper, raw materials required for industrial purposes by the manufacturing industry 2078'.  The

procedure was revised last August to cover the situation of imported betel nut consumption, value addition, and revenue. Now this procedure has also been abolished. In order to import betel nut there is a requirement that the industry has been operating for at least 5 years, the government will now allow anyone to import it. 

Even during the period when the government imposed quantitative restrictions, betel nuts used to be smuggled from Nepal. On June 18, 2018, the police seized 2,378 kilos of betel nuts from Mechinagar-6 in Jhapa, which were about to be illegally exported to India. On July 5, 2079, 8 betel nut trucks which were about to be exported to India were seized by the police through Biratnagar Customs. 

Navin Ghimire, the owner of the exporter Mankamana Traders, filed a writ in the Biratnagar High Court, demanding an interim order to release the betel nuts. But later he withdrew the writ . 

The government does not have accurate data on the demand and consumption of the domestic industry. 

The Sustainable Development and Good Governance Committee under the National Assembly, a sub-committee formed three years ago under the chairmanship of the then MP Rameshjung Rayamazhi, prepared a report that 7 thousand tons of betel nut per year would be enough.

According to the Ministry of Agriculture and Livestock Development, betel nut is cultivated in about 4,100 hectares in the country and 14,500 tons are produced from it. It seems that the betel nut produced by the farmers of Nepal will meet the local demand and be exported. But every year a large amount of betel nut is being imported. 

According to the Customs Department, 5,644 tons worth 1.5 billion rupees were imported in the fiscal year 2080/81. In the 7 months of the current financial year, 3,385 tons of betel nuts worth 450 million have been imported. Betel nuts are mainly imported from Indonesia, Malaysia, Canada and other countries. 

Stakeholders say that betel nut imports will increase after the removal of quantitative restrictions. Imported betel nuts are more likely to be smuggled than domestically consumed. Even though the import is shown on the paper, the goods do not come to Nepal but go to India," said the joint secretary of the Ministry of Industry and Commerce. 

Giving certificate of origin to imported betel nuts from third countries increases smuggling, now when quotas are open middlemen are encouraged

- Keshav Acharya, Economist

Former joint secretary of the Ministry of Industry and Commerce Ravi Sainju claims that traders import betel nuts from different countries for smuggling. When Indian traders import betel nuts, they incur a customs duty of at least 351 baht per kilo. When importing from a third country to Nepal, the customs duty is only 100 rupees. That's why smuggling happens," he said, "Nepali businessmen and businessmen are not the only ones involved in smuggling, Indians are also involved." He said that it is ironic that political parties are also involved in this game.

Former Assistant Secretary Sainju says that betel nut smuggling may worsen trade relations between Nepal and India. This could damage bilateral trade relations. "When the then Industry, Commerce and Supply Minister Romi Gauchan Thakali went on a visit to India, the Indian officials complained about betel nut smuggling," he said. India can take it negatively and tax other items that are exported. He says that betel nuts produced in the country can be exported. 

The certificate of origin of goods produced in Nepal is given by Federation of Commerce and Industry, Federation of Industries and Chamber of Commerce. Trade and Export Promotion Center has also been giving certificates. But experts say that these agencies issue certificates of origin without sufficient study. Economist Keshav Acharya says that giving a certificate of origin to betel nuts imported from third countries will encourage smuggling. "Now when the quota is open, the middlemen are encouraged. The government is in the hands of the middlemen. "Swadeshi farmers can't pay money, they can't get certificate of origin," he said. 

Economist Acharya said that the government will get little revenue from the export of betel nuts and only the middlemen will benefit. According to him, betel nuts from third countries go directly to the Indian market from Kolkata without Birganj. "There is a possibility that the goods will come only on paper, and reach India somewhere else," Acharya said, "Customs officials of both countries need to be careful." Kamlesh Agarwal, president of the Chamber of Commerce, said that the certificate of origin of betel nuts has not been issued recently. 

Neelkanth Tiwari, President of Supari Produkti Kisan Sangh, said that Nepali farmers will be upset when the government opens imports completely. “Betel nut plant gives income for 30 to 40 years. Betel nut cultivation has also increased since 4/5 years. Nepali farmers are killed when betel nut import is left open,' he said, 'import should be stopped immediately.' "We had instructed to conduct a DNA test on the recovered betel nuts, but the test was not done, and now the import quota has been cancelled," he said.