Counterfeit Products Rampant in Market Years after Closure of Industry that Produces Genuine Product

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Counterfeit Products Rampant in Market Years after Closure of Industry that Produces Genuine Product

September 15: It has been five years since Arvind Udyog Pvt Limited of Birgunj stopped its production. However, the products of this industry are still easily available in the market. But those products are not manufactured by Arvind industry. Counterfeit products imported illegally from India have taken over the market in the name of Arvind Udyog. Taking advantage of the closure of Arvind industry, Indian industries have been sending fake products that look the same like the ones manufactured earlier in Nepal.

The Department of Industries has registered the trade mark of `’Tinku Supari’, a tobacco-free aromatic betel nut (sweet supari), in the name of Arvind Udyog. The Indian sweet betel nut that looks like the betel nut of Aravind Udyog seems to be produced under the name of KM Marketing in Delhi, India.

The domestic industry has been shut down due to the government policy, while fake products are being imported from India illegally. Industrialists complain that the domestic market is occupied by such products imported from India through smuggling.

Arvind Udyog’s operator Niranjan Agarwal says that the production was stopped because the industry could not compete with foreign products due to the government's revenue policy. He said that even though the production was stopped five years ago, the industry has been renewing its company registration and trademark consistently.

“I am renewing the registration by spending Rs 300,000 every year,” said Agrawal, adding that he did not stop renewing it in the hope that one day the policy will be improved and he will be able to do business again.

Fake products are being smuggled from India rampantly. However, the customs offices do not have data on the illegal import of such products. Ramchandra Dhakal, Information Officer of Birgunj Customs, says that there is no official data of sweet betel nut being imported into the country.

According to the Department of Customs, only eight kilograms of sweet betel nuts were imported in the last fiscal year. However, the local businessmen estimates that around 2,000 tons of sweet betel nuts are consumed in the domestic market every year.

The government levies an excise duty of Rs 365 per kg and a health tax of Rs 40 per kg on domestic products. A customs duty of Rs 100 per kilo is levied on betel nuts used as raw material.

The government has been increasing the excise duty since FY 2069/70, which started at Rs 50 per kg. Altogether, 17 industries have stopped production due to high costs as a result of hefty taxes imposed by the government. They argue that readymade products from India is cheaper than their products.

The industrialist said that the retail price of domestic sweet betel nuts is Rs 145 per packet. They say that fake products manufactured in India are available at a retail price of Rs 48.

Similarly, eight of the industries have canceled their industry registration. Others are renewing it every year.

Due to the high revenue to be paid to the customs, such products are imported through illegal means. Government revenue is also lost due to this. Industrialists say that due to the high rate of revenue, both the investment of the domestic industry and the government revenue have gone down the drains.



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