The Rising Nepal, September 11: Birgunj companies are objecting to India's decision to impose 20 percent export duties on paddy and rice from September 9.

Indian authorities have announced a 20 percent export tax on rice to ensure domestic supplies. According to the announcement, from Friday, export duties will be imposed on hulled rice (paddy or coarse rice), semi-milled rice or whole milled rice, whether polished or glazed or not (except steamed rice and basmati rice).

Federation of Nepalese Chambers of Commerce & Industry (FNCCI) Birgunj chairman Subodh Gupta said that previously, export duties were zero when paddy and rice were imported from India. Now, there is a 20 percent export tariff. There is also a complete ban on exports of shredded rice. Speaking on India's export duties at the FNCCI press conference on Friday, Gupta said India's rice production was affected this year due to poor rainfall in states such as West Bengal and Uttar Pradesh and the export duties were subsequently imposed to secure its domestic supply. The FNCCI held the press conference to draw India's attention to Nepal's difficulties and asked the Nepalese government to hold bilateral talks at an early date to resolve the issue.

India is the second largest producer and exporter of rice after China, Gupta said. Nepal has been importing large quantities of paddy and rice from India for many years. The imposition of export duties will have a negative impact on Nepal. Nepal imported paddy and rice worth nearly 48 billion rupees last fiscal.

FNCCI officials stressed that paddy and rice prices in Nepal would go up following the imposition of export duties. In addition, they argue that if the decision is not reversed, some rice industries will inevitably close.

Gupta, who is also the central chairman of Nepal Rice, Oil and Beans Production Association, added that the decision would also greatly affect the Nepali liquor and livestock feed production sectors.