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Nepal Traders have stopped importing onions, potatoes and other vegetables from India. Traders in Nepal said on Tuesday that the government had imposed 13 per cent VAT on these products last month, following which they had stopped importing them. Opposition lawmakers have criticized the Nepal government’s move, arguing that it will increase the burden of inflation on low-income families. Let us tell you that according to the Finance Bill introduced in Parliament on May 29, imported onions, potatoes and other vegetables and fruits will now attract 13 percent VAT.

Nepal takes all its imports from India

Nepal imports almost all the onions it needs from the neighboring country India. Last year, it imported 1,73,829 tonnes of onions from India. Nepal grows potatoes which meet about 60 percent of the local demand, while the rest is also imported from India. Opposition MPs criticized the Finance Minister, saying that his argument that VAT was implemented to protect local farmers has no merit as Nepal is almost entirely dependent on India for its onions. “Before the government introduced VAT, the Kathmandu Valley used to import 700 to 1,000 tonnes of onions daily from India,” said Keshav Upreti, a wholesaler at the Kalimati Fruits and Vegetable Market.

onion price doubled

“Onions have stopped coming from India in the last 10 days,” he said. Upreti said there were also legal problems while importing vegetables from India by paying VAT. Due to this the prices of vegetables have gone up. Onion price which was Rs 50 per kg till last month has now almost doubled due to acute shortage. According to local traders in Kathmandu, potato prices have also increased by about 25 per cent. Prakash Gajurel, general secretary of the Traders Association, said that the Nepal government currently collects nine percent agricultural service tax and five percent advance income tax. “Adding 13 per cent VAT on top of these taxes will make kitchen items very expensive,” The Kathmandu Post newspaper quoted Gajurel as saying.

India also imports these vegetables

Apart from onions and potatoes, Nepal also imports brinjal, peas, garlic, beans and spinach from India. Similarly, it also imports fruits like avocado, apple, apricot, cherry, raspberry, cranberry, kiwi and mango from India. According to the central bank of Nepal, the year-on-year inflation rate reached 7.41 percent in May.

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