India surprised by Nepal’s new ‘trick’! 1000+ trucks stuck on the border, will there be inflation now?

When the rules suddenly change, the first thing that shakes is the foundation of the market. At present a similar scene is being seen in Nepal. Nepal’s new custom rules on goods coming from India have shaken the entire trade ecosystem. Long queues of trucks at the border, jam of containers and sounds of inflation in the market – all these together are pointing towards a major economic crisis.

What is the new rule that increased tension?

Actually, the Nepal government has implemented a new order from April 28. According to this order, it has been made mandatory for every goods coming from India to have MRP i.e. Maximum Retail Price label before custom clearance. The government’s argument is that if the price of an item is more than 100 Nepalese rupees, then custom duty will be levied on it only if MRP is printed on it. In simple words, now it is necessary to write the price on every product in advance, only then it will get entry in Nepal.

Pile of containers at the border

As soon as this rule came into force, traders opened their front. Imports have stopped on a large scale for the last four days. More than 1000 containers are stuck at the border and miles long lines of trucks have formed. The situation is very bad at big custom points like Viratnagar. Custom officials clearly say that they are giving clearance only to those goods on which MRP is registered, everything else is stuck there.

Traders’ arguments and practical difficulties

Traders say that this rule is not practical. A large container contains thousands of different products and applying MRP labels to each one separately is a very difficult task. If the label is placed after opening the packet at the border, there is a fear of the goods getting spoiled and the packaging getting broken. This will not only increase the cost, but the daily ‘damage and detention charges’ will also break the back of the traders. If this situation continues, there may be a severe shortage of goods in Nepal’s markets and prices may skyrocket.

Government gave some relief, but controversy continues

After huge embarrassment and protest, the Nepal government has implemented a new system of duty exemption on personal belongings of passengers by making slight changes in the customs rules. It is a matter of relief that clearance of petroleum products, industrial raw materials and perishable goods like fruits and vegetables has been continued.

Nepal government was trying to implement this MRP system for the last 10 years. A notice regarding this was also issued in the year 2012. The aim of the government is to provide fair prices to consumers, stop overcharging and bring transparency in the market. But its sudden implementation has created controversy. This matter has now become a battle of policy versus practicality. If no solution is found soon, it will directly impact the pockets of the general public.