Nepal resumes import of onions from India after halting it for 2 weeks

Traders in Nepal have resumed importing onions from India, more than two weeks after they stopped buying from it following govt's move to impose a hefty 13% VAT on vegetables last month.

Traders in Nepal have resumed importing onions from India, more than two weeks after they stopped buying from the neighbouring country following the Nepal government's move to impose a hefty 13 per cent Value-Added Tax (VAT) on vegetables last month.

Vegetable vendors started bringing onions to the Kalimati Fruits and Vegetable Market, Kathmandu's main vegetable trading centre, on Monday, with the largest consignments of onions being poured in on Tuesday and Wednesday.

Onions have started arriving in the Kalimati Fruits and Vegetable Market, said Arjun Prasad Aryal, Deputy Executive Director of the market's Development Committee.

"In total, 145 metric tonnes of onions arrived in Kathmandu's major vegetable wholesale market on Tuesday and Wednesday, Aryal said, adding that there is a smooth supply of the vegetable in the market as traders have started bringing onions by paying VAT.

According to the financial bill introduced in the Himalayan country's Parliament on May 29, imported onions, potatoes and other vegetables and fruits will now be subjected to a 13 per cent VAT.

Onion, sold in the wholesale market for Rs 48 per kg, costs Rs 70 in retail markets.

We have started bringing onion from India for three, four days, said Bharat Upreti, a vegetable vendor at the Kalimati market.

Before paying 13 per cent VAT, we also need to pay 9 per cent vegetable import tax and 5 per cent advance tax, he said.

Our demand for removing VAT is still there, but we have started importing onions in the interest of the customers, added Upreti, who brought 21 metric tonnes of onions from India on Wednesday.

I brought 25 tonnes of onions on Wednesday after paying VAT, said Ram Bilash, another trader, adding that the sellers are stuck on their demand of removing VAT from onions.

We want (the) government to allow trading onions under PAN (Personal Account Number), he said, adding that imposing VAT on vegetables such as potato and onion is "ridiculous".

Although the supply of onions in Kathmandu's markets is relatively smooth now, the market price has soared to Rs. 70 from the previous price of Rs. 50, a straight 40 per cent increase.

Nepal imports almost all its onions from neighbouring India. Last year, it imported 173,829 tonnes of onions from India.

Nepal grows potatoes that cater to around 60 per cent of local demand, while the rest of the vegetables are also imported from India.