Nepal jute mills demand incentives

16 Jun '11

2 min read

The Nepal Government has been called upon by nine jute mills belonging to Morang-Sunsari Industrial Corridor (MSIC) to sanction a 10 percent cash incentive to boost export of jute items. The mills have also submitted a five-point demand for revival of the ailing mills.

Nepal Jute Industries Association (NJIA), during a recent press meet in Biratnagar, had also cautioned that if the Government does not pay heed to their demands, all the mills would be forced to close down.

The NJIA revealed that NPR 80 million has been invested in the nine mills in MSIC which employ over 10,000 workers.

The Government's indifference towards their demands was greatly lamented by the NJIA, which held that the industry is experiencing severe problems due to extended power outages, and higher wage rates as compared to the wages prevailing in countries like India and Bangladesh.

The Association has put forth a demand before the Government to grant a 70 percent subsidy in electricity rates and 10 percent incentive on export of jute items.

The Association also urged the Government to extend VAT and custom duty exemption on import of spare parts, and also to make provision for providing diesel to the industry at subsidised rates. It even asked the Government to constitute a Jute Board to promote and boost jute cultivation.

The NJIA stated that the Biratnagar mills are not in a condition to withstand the competition from Indian and Bangladeshi jute industries. The Government's move of hiking the minimum daily wage of workers to NPR 231 from the month of May has intensified the woes of the domestic jute mills.

According to Champalal Rathi, a jute entrepreneur, it is not possible for the Nepali jute mills to withstand competition from jute mills in Bangladesh and India, as mills there draw several subsidies from the Government.

Fibre2fashion News Desk - India

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