Risk of capital flight high as many Nepalese throng Indian market

JANAKPURDHAM, Feb 18:

Threat of capital flight from Nepal to India has been mounting, owing to the increasing number of Nepali customers thronging the nearby Indian markets across the Nepal-India border area in Janakpur for shopping.

According to the Nepali businessmen in Janakpur, they have been witnessing the flight of capital to India in big amount since the Indian businessmen simplified the business procedure in their locality.

Since the price difference of the daily consumables at the markets of Nepal and India is huge, a big amount of capital has been flying to India as many people visit the Indian markets for purchases, leaving an adverse impact in the Nepal´s business atmosphere.

The markets here in Janakpur are virtually deserted these days due to the Nepali customers´ exodus to nearby Indian markets which has been witnessing a transaction worth Rs 200 million a day.

The Indian businessmen of Jayanagar, Harine, Umgaun, Madhuwapur and places at Indian border areas shared that Nepali customers come to them in bulk to buy goods, both in retail and wholesale.

Jaskaran Shah, an Indian retailer at Indian boarder area Jayanagar, admitted that the Indian markets are alive and kicking because of the Nepali customers.

Bhidamode, another Indian border town, has around 300 shops and receives more than 5000 Nepalese customers on a daily basis, according to Krishna Kumar Singh, a local businessman. The town sees transactions worth Rs 5 million a day.

Locals in Janakpur prefer to shop in Indian markets as both the countries share an open border and the price of goods are relatively lesser in the Indian markets, opined Shyam Prasad Shah, the former Chairman of Janakpur Chamber of Commerce and Industry.

He was of the belief that capital flight to India would significantly reduce if big industries would be brought into operation in homeland manufacturing the goods at a reasonable price.

Source: Republica