Submit your Article

After three years of border closures and transportation disturbances, hopes that Nepal-China trade will gather momentum have rekindled as the two neighbors agreed to fully reopen two major border points for bilateral trade. Ever since the outbreak of the Covid-19 pandemic in early 2020, Nepal's trade with its northern neighbor hit a roadblock with frequent closing and opening of the Rasuwagadhi and Tatopani border points from where the majority of inland trade takes place. Senior Nepali and Chinese officials during the first meeting of Nepal-China Coordination Mechanism on Border Trade and Cooperation, agreed to fully reopen the Rasuwagadhi- Kerung border point for two-way trade and movement of people from April 1 and the Tatopani-Khasa border point from May 1. "The Chinese side has also agreed to consider setting up a multi-functional lab on the Nepal-China border," reads the statement issued by the Consulate General of Nepal, Lhasa after the meeting on Wednesday evening. Businessmen engaged in the Nepal-China trade have welcomed the development. “It is the news we had long been longing to hear,” said Ashok Kumar Shrestha, President of Nepal Trans-Himalaya Border Commerce Association (NTHBCA). “The reopening of the border points for movement of goods and people would help boost bilateral trade through the land routes.” The two sides are scheduled to organize a special event on the Chinese side of the border on April 1 to mark the reopening of the border. “Officials from Nepal's consulate general office in Lhasa, Nepali government officials, Chinese officials, and Nepali drivers of cargo trucks will attend the reopening ceremony,” said a senior official of the Department of Customs (DoC). Rasuwagadhi and Tatopani have not been fully operational since early 2020 after the outbreak of coronavirus. Initially, Nepal chose to close the border after the coronavirus spread in China but border points could not be fully operational due to the strict zero-Covid policy adopted by China. China on Dec 28 last year opened the Rasuwagadhi border point for exports of Nepali goods though it was already reopened for one-way import of goods from China to Nepal only. The Tatopani-Khasa border point has remained closed for a long time though it was occasionally reopened since the pandemic hit the world. Even after the reopening of the Rasuwagadhi border point for two-way traffic of goods, China has been imposing a quota system for the export and import of goods which has prevented the full realization of export and import through this border point. According to the DoC official, the Chinese side has been releasing just 14 containers a day currently. “They have also allowed containers of Nepali goods three days a week with a maximum of 10 containers in a day,” said the official. Handicrafts, bamboo seats, carpets, and metal utensils are among the goods exported from Nepal to China through this route since the border was reopened for two-way traffic of goods. According to DoC, goods worth Rs 140.5m were exported to China through Rasuwagadhi- Kerung border points till mid-March this fiscal year. The customs official said that they expected the import of over 25 containers of goods and export of 4-5 containers of goods in a day. Due to uncertainty over the reopening of the border, the majority of Nepali importers of goods from China diverted to the sea route, which is less expensive though it is time-consuming compared to bringing goods through land routes with China. NTHBCA President Shrestha said that full reopening could encourage traders to divert their shipment routes from the seas to the land routes. “It also depends on transportation costs and connectivity and other physical infrastructure in the bordering areas,” he said. Over the last several years, imports from China have grown steadily except for occasional hiccups such as in the fiscal year 2019/20 when the government in Nepal imposed a lockdown in March 2020 to curb coronavirus transmission that went on for nearly four months. On the other hand, Nepal’s exports to its northern neighbor have dwindled leading to a massive trade deficit in the trade between the two countries. Nepal’s exports to China in the last FY 2021/22 stood at just Rs 808m, with a consistent drop from Rs 2.1bn in FY 2018/19. During the same period, imports from China grew to Rs 264.78bn in FY 2021/22 from Rs 205.51bn in FY 2018/19, according to the Department of Customs statistics. “The closure of borders has cost dearly to Nepal’s exports to China as the majority of such exports take place through land routes,” said Purusottam Ojha, former Secretary of Commerce. As a result, the ratio of exports to China compared to imports from the northern neighbor plunged to just 0.3 percent in FY 2021/22 from as high as one percent in FY 2018/19. This ratio was 3.1 percent in FY 2013/14 when the country had exported goods worth Rs 2.84bn to its northern neighbor. Nepal exports more goods to China through land routes. Since the coronavirus pandemic began, Nepali exporters have been forced to use air routes to export certain goods to China which is expensive. The DoC official said that Nepal’s export growth would also depend on whether Chinese authorities would continue to impose non-tariff barriers. “Though Nepal was allowed to export a number of goods since late December last year, Nepal’s food items have not been allowed to enter China so far,” said the official. Nepal-China Bilateral Trade (first 8 months) (in Rs, in bn)

The competition in the 100kW segment of electric vehicles (EVs) in the domestic market is all set to heat up with Paramount Motors, the authorized importer and distributor of MG vehicles in Nepal, announcing the pre-booking for the new SUV MG ZS EV. With government policies favoring the sales of 100kW EVs in the market, Nepali EV importers are now importing more vehicles of this motor capacity. First, Cimex Inc, the authorized dealer of BYD imported Atto-3 EV, and now Paramount Motors has also imported vehicles below 100kW. The success of NETA V and Tata Nexon in the market along with the government tax policy has forced EV dealers to go for 100 kW vehicles. The EV importers have been forced to prioritize below 100 KW EVs as the government in the current fiscal year budget levied excise duty on top of the existing customs duty on electric vehicles above 100 kW capacity. This, according to automobile importers, has made electric vehicles costlier for buyers. The changes in tax arrangements forced Nepali EV importers who'd been selling above 100KW EVs, to request their Chinese manufacturers to manufacture EVs below 100 kW for the Nepali market. The MG ZS EV is equipped with 99KW motor peak power and 51 KW battery capacity. The electric SUV gives a range of 320km on a single charge. The SUV can be charged up to 80 percent within 30 minutes and has an 8-year warranty for battery. The MG ZS EV comes up with safety features such as six airbags, ESP, EAB, HDC, Auto hold, features a premium panoramic sunroof, a 10.1-inch infotainment system with DAB radio, and Bluetooth. The SUV has a 7-inch driver’s digital instrument cluster, wireless phone charging, keyless entry and start, six-speaker 3D sound system, six-way driver and four-way front passenger electrical adjustable leather power seats with heating, 60/40 folding rear seats, roof rails, and power-folding. The new MG ZS EV with 99KW Motor and 51kwh battery capacity will come in two variants - Comfort and Deluxe at Rs 48,49,000 and Rs 52,49,000 respectively. Customers can pre-order and reserve their favorite electric vehicle with a deposit of Rs 100,000. The EV market has seen huge growth in the current fiscal year. The country has imported electric vehicles worth Rs 6.16 billion in the first eight months of FY 2022/23. The data from the Department of Customs shows Nepal imported 2198 units of electric vehicles till mid-March 2023. The imports of EVs having a motor capacity of 100KW has surged massively in this fiscal. Of the total EVs imported, 2139 are of 100KW capacity. During this period, most EVs (1571 units) have been imported from India.  

While officials at the Ministry of Finance (MoF) are busy formulating the next fiscal year federal budget, the finance minister is absent in this process. Due to the changes in the government, the post of finance minister has remained vacant for the past one month. The Finance Ministry was left without proper leadership after Bishnu Paudel resigned as finance minister on February 28. The ruling alliance is taking a long time to agree on the ministerial portfolio due to disagreements over power-sharing. Since then, Prime Minister Pushpa Kamal Dahal has been holding the Ministry of Finance. The MoF officials say they are facing difficulty in the process of budget formulation due to the absence of a finance minister. As the end of the fiscal year is approaching, the MoF has given priority to the preparation of the budget for the next fiscal year 2022/23. The constitution of Nepal requires the government to bring the budget on May 15 before the fiscal year starts on July 17. MoF has formed nine sub-committees for the formulation of necessary revenue policies that will be included in the budget. A senior official of the ministry said that the work related to the writing of the budget has intensified based on the suggestions received through the sub-committees. A sub-committee formed under the coordination of Dirgharaj Mainali, Director General of the Inland Revenue Department, is working to formulate policies on inland revenue. A sub-committee has been formed under the coordination of Chakra Bahadur Budha, Director General of the Department of Customs to formulate a policy on customs revenue. Similarly, a sub-committee formed under the coordination of Baburam Gautam, Joint Secretary of the Ministry of Industry, Commerce, and Supplies, is working for formulating revenue policy related to industry, trade, and investment. Likewise, a sub-committee under the coordination of Rajendra Poudel, Joint Secretary of the National Planning Commission (NPC), is working to formulate policies on agriculture, energy, and tourism revenue. Also, a sub-committee has been formed under the coordination of Jhak Prasad Acharya, Joint Secretary of MoF, to take suggestions from the stakeholders about the revenue policy of banks and financial institutions, insurance, cooperatives, and capital market. Meanwhile, a sub-committee formed under the coordination of Anand Kafle, Joint Secretary of MoF, is working to take suggestions on non-tax revenue policies of the government. In addition, a sub-committee has been formed under the coordination of Ishwari Prasad Aryal, Joint Secretary of MoF, for formulating policies related to intergovernmental revenue. Also, a sub-committee has been formed under the coordination of Arjun Khadka, Joint Secretary of MoF, to improve the laws related to revenue. According to the ministry officials, the revenue policy will be formulated based on the suggestions received through the sub-committees that are currently working on collecting suggestions from stakeholders. The Revenue Advisory Development Committee, which earlier used to be tasked with the formulation of revenue policies and programs, has been replaced with the Revenue Advisory Committee established under the chairmanship of the Revenue Secretary. Issuing a public notice, MoF has called for suggestions related to revenue policy to be submitted by April 3. According to the ministry sources, the budget is being prepared within the ceiling of Rs 1688 billion set by NPC for the next fiscal year. The ceiling is Rs 105.43 billion less than that of the current fiscal year. The government had earlier brought the budget of Rs 1793 billion for the current fiscal year which was trimmed by Rs 244 billion to Rs 1599 billion through the mid-term review of the budget. NPC reduced the size of the budget ceiling analyzing the contraction in government revenue, the decreasing trend of foreign grants, the possibility of pressure on loan and interest payments to international lenders due to volatility in the foreign exchange rates, and the growing burden of internal debt payments. MoF officials say that the budget for the upcoming fiscal year is being prepared considering these factors. NPC has estimated that a total of Rs 1430 billion will be collected in revenue in the next fiscal year. Similarly, the commission estimates that Rs 201 billion will be raised from foreign aid (loans and grants) and Rs 230 billion from internal loans.

The Ministry of Physical Infrastructure and Transport (MoPIT) has started the process to use the Devanagari script on the embossed number plates of vehicles. Currently, Latin script is used on embossed number plates. The Department of Transport Management (DoTM) has installed embossed number plates on around 40,000 vehicles. DoTM is also facing criticism for costly fees for the installation of embossed number plates. Given the criticism and linguistic experts questioning the use of Latin script, the ministry has now said it would make the necessary policy decision to use the Devanagari script on the embossed plates. An embossed number plate is a camera-readable plate that contains a microchip connected to the vehicle’s GPS system. This makes it efficient in terms of maintaining digital records of the vehicles, collecting revenue on time, monitoring vehicles, and controlling vehicle thefts. MoPIT Spokesperson Bhimarjun Adhikari said that a process has been initiated to keep the name of the country and province in Devanagari script on the embossed plate. He further said that the cost of installing plates will also be reduced. "We are making a policy decision to keep the name of the country and province in Devanagari script," said Adhikari. "The ministry is also in discussion with the contractor which has been given the contract of installing embossed number plates." According to Adhikari, the ministry has advanced the discussion to reduce the fee for embossed number plates. Currently, the DoTM charges two-wheelers Rs 2,500; three-wheelers (tempos) Rs 2,900; light four-wheelers including cars, jeeps, vans, and tractors Rs 3,200; and heavy vehicles Rs 3,600 for installing embossed number plates. MoPIT is also preparing to issue the driver's license within three days of the trial. At present, there are almost 800,000 people waiting for their licenses. The ministry plans to issue them a license within eight months. After that, the ministry plans to give a smart license within three days of the trial. For that, it is said that smart card printing machines will be installed in the transport management offices of all provinces. Currently, there is a daily demand for 6,000 licenses across the country, but DoTM has been printing only 4,000 licenses on a daily basis.