August 24: Nepal Telecommunication Authority (NTA) has started a feasibility study for assembling mobile phones in Nepal. NTA has initiated the study to reduce the country’s trade deficit by assembling mobile phones within the country in the context of smart phones worth billions of rupees being imported every year.

Imports of mobile phones in Nepal have skyrocketed after the Covid-19 pandemic. According to the Nepal Mobile Phone Association of Nepal, in the last fiscal year 2077/78 alone, more than 4 million sets of mobile phones worth Rs 37.40 billion have been imported in the country.

NTA has formed a seven-member committee led by NTA spokesperson Min Prasad Aryal to study the issue.

The committee has studied the prospect of assembling and refurbishing mobile phones in Nepal. Assembling means making mobiles in Nepal by bringing parts from abroad, while refurbishing means repairing damaged mobiles and making them new. The committee has suggested that mobile phones can be produced and refurbished in Nepal by providing necessary facilitation to mobile phone importers and industrialists.

However, this is only the first draft of the study. NTA is preparing to conduct a detailed feasibility study in the coming days in coordination with concerned industrialists.

NTA Chairman Purushottam Khanal said that a study has been started on how to facilitate taxes, how to set up industries, how many mobiles can be imported, how much manpower is needed, how many phones can be assembled and refurbished in Nepal and what are the possibilities and challenges of assembling.

"The report has recommended for a detailed study," said Khanal.

Although the authority has started the study, businessmen seem to be against the idea. At present, 2.5 percent excise duty in addition to 13 percent VAT is levied on the import of mobile phones in Nepal and no other customs duty is charged. Businessmen argue that assembling parts here is more expensive than importing readymade sets because of the 5 percent customs duty on importing parts. For this reason, businessmen are not in favor of assembling mobile phones in Nepal.

Deepak Malhotra, president of the Nepal Mobile Phone Importers' Association, says that the mobile assembly industry is not possible in Nepal due to various reasons including the high cost of importing parts, lack of investment, manpower and market.