February 19: Nepali biscuit factories have been “forced” to lower their production by 50 percent due to smuggling of Indian biscuits into the country through the open border.

The industrialists say that their production used to be full-fledged when the border remained completely sealed owing to the threat of coronavirus. However, they complained that they have been compelled to lower the production to 50 percent because of the illegal entry of biscuits from India by smugglers taking advantage of the porous border. 

Until five years ago, there were 53 biscuit industries operational in Nepal. However, 21 of them were closed as they could not compete with the Indian products because they had been producing biscuit by importing sugar and flour from India.

Even the existing 14 industries that produce biscuit are in crisis as the government has not given them customs duty waiver for the import of sugar and flour, says Mahesh Jaju, operator of Goodlife Biscuit and the chairman of Nepal Biscuit Producers’ Association.

According to him, biscuits produced within the country had good access to the domestic market during the lockdown period. He says that the industries had excessive demand during the lockdown period and had to opt for adding new plant if they were to meet the demand. But now, biscuits produced in India are being imported to Nepal by avoiding customs duty and this has forced the local industries to reduce their production by 50 percent, says Jaju.

He says that the government needs to waive customs duty on import of sugar and flour by 20 percent if it is to protect the industries that have been producing biscuits within Nepal.

He added that the illegal entry of Indian biscuits has not stopped even though they drew the attention of the secretary at the Ministry of Industry, Commerce and Supplies and the Provincial Government.

Similarly, operator of Kwality Buscuits and central committee member of the Nepal Biscuit Producers’ Association Nawal Kishor Kabra says that the government must put an end to smuggling of Indian biscuit and also declare sugar and flour as raw materials so that the industries can import them at subsidized rate.

He said that the biscuit factories that give employment to thousands of people are on the verge of collapse due to the negligence of the government.

Spokesperson of Biratnagar Customs Santosh Yadav informed New Business Age that the customs office alone cannot stop smuggling of biscuits into the country and therefore they have been coordinating with security forces to stop the illegal entry of goods. He admitted that it would be difficult to fully curb smuggling because Nepal and India share 1800-kilometer border.

Meanwhile, Director General of the Industry, Supply and Consumer Protection Department Netra Prasad Subedi said that they will make attempts to stop smuggling in coordination with the local units. He said that they have received complaints of illegal entry of other goods besides biscuits when the border was reopened after the threat of Covid-19 largely subsided.

It is estimated that around 15,000 people have lost employment due to the closure of biscuit factories in the last five years.