India is the major market for Nepali Jute. After India imposed a huge Countervailing Duty (CVD) on jute, it has affected six jute industries of Biratnagar. However, imposition of CVD on jute products is against the Nepal-India trade agreement, said jute traders. As per the Nepal-India trade agreement, jute industries of both the countries should be treated equally.

The Indian government started imposing a 12 percent tax on jute imported from Sri Lanka, the Maldives and Nepal from December 15. Before December 15, India was charged only 1 percent tax on Nepali jute.

Around 12 to 15 truckloads of jute products were being exported to India on a daily basis until December 15. The export, however, has come down to zero after CVD was imposed.

Ramesh Rathi, president of Nepal Jute Mills Association, said that the Indian decision has hit jute industries hard. Jute exports have been affected since the day the decision was taken.

According to Rathi, six industries of Morang-Sunsari Industrial Corridor has been exporting jute to India which is their big market. They cannot run the industry paying such a huge tax.

The Indian government has imposed 12 percent tax on ready-made jute products, Asian cloth and jute sack. But it has not imposed any tax on sutari thread which is made from jute.

SB Sinha, senior superintendent of Indian Customs Office at Jogbani, said that the Indian government was making preparation to lift CVD imposed on Nepali jute. The decision is actually made for Bangladesh, Sri Lanka and the Maldives.

Jogbani, further said that the Indian government has issued the same circular for all countries. They have not blocked export. The export has been affected due to the circular by Indian government. However, they are working to remove it. The delay in the process to lift the CVD imposed on jute products is due to the Christmas and New Year holiday

The Nepali traders have visited the Indian Finance Ministry to discuss about CVD imposed on Nepali jute products.