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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

09/03/2002

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

NULL

CATEGORY

HEADLINE

INDIA LIMITS DUTY FREE IMPORTS OF VEG OIL FROM NEP
KATHMANDU, March 6 (Reuters) - India has put a limit on duty free importsof some commodities, including hydrogenated vegetable oil, from Nepalunder a renewed bilateral trade treaty, officials said on Wednesday.Under the pact, signed between officials of the two countries at theweekend, imports of hydrogenated vegetable oil exceeding 100,000 tonneswill attract tariff, they said.Earlier, India allowed all Nepali products except alcohol, cosmeticsand tobacco, unlimited duty-free access under a treaty signed in 1996.India will annually allow from Nepal 10,000 tonnes of acrylic yarn,7,500 tonnes of copper wire and 2,500 tonnes of zinc oxide duty-free intoits market."The export of these goods to India in the excess of prescribed amountwould be subject to normal Indian customs duties as applied to othercountries," Nepal's Commerce Secretary, Bhanu Prasad Acharya, toldReuters.Indian industry has been protesting against duty free imports,especially of hydrogenated vegetable oil or vanaspati, which it says ishurting the interests of domestic industry.India, the world's largest vegetable oil importer, left customs dutieson edible oils unchanged in its federal budget last week but imposed afour-percent special additional duty on imports of vanaspati from NepalNepal's vanaspati was singled out because production costs of the oilare lower as the country levies no import duty on raw materials, mainlycrude palm oil, compared with a 65-percent duty in India.This makes Indian vanaspati manufacturers uncompetitive on their hometurf, traders say.Nepal exported 125,000 tonnes of vanaspati in 2000/01 (mid-July tomid-July).All Nepali products must also have at least 25-percent domesticmaterial or labour content to enjoy the duty free facility in India."This new provision is in the long-term interest of Nepal and will helpsustained growth of our industries," Acharya said.India, Nepal's largest trading partner, accounts for nearly 40 percentof the kingdom's total trade.Officials said following the treaty exports to New Delhi increased to27.30 billion Nepali rupees ($351.48 million) in 2000/01, a more thantwo-fold increase from 12.53 billion rupees two years ago.New Delhi had a surplus of 19.5 billion Nepali rupees in its trade withKathmandu last year.