What Are The List Of Items Prohibited For Import Into Nepal?

Owing to a fiscal deficit of 28.47 percent for the first nine months of the fiscal year 2078/79, the Nepal government has formally banned the import of certain items, which were initially banned through verbal instructions to commercial banks.

Through a formal notice in the official gazette, the government imposed restrictions against certain types of goods, they are mainly classified as luxurious goods.

1. Motorcycles above 250 cc
2. Mobile phones greater than $600
3. Televisions over 32-inches
4. All kinds of ready-made liquor
5. Cigarettes and tobacco products (other than raw materials)
6. All kinds of toys and playing cards
7. Diamonds (other than industrial raw materials), and,
8. Any type of private vehicle except ambulance and hearses

The imposition is said to last till mid-July, 2022. However, it can be extended to a longer period if the trade deficit continues widening at a high rate and foreign exchange reserves continue to decline. As of now, the government has stopped the import of 300 items from 47 groups through commercial banks. Due to the notice served by the government, some banks have stopped importing luxury items including cars but others were opening letters of credit. Out of the imposition on private vehicles, the car dealers' union had demanded a date for the closure, following a verbal order from the National Bank.

Though gold and silver fall under the luxurious category, the import of said goods has not been banned. However, NRB had verbally instructed the commercial banks not to open terms of credit for importing gold and silver.

Previously, NRB had banned the import of everything from dry feet to cosmetics. In fact, the import of homemade marble and tiles were also banned. However, now there will be no obstacle to importing these goods.

The reason behind such a haste decision from the government side is the decline in the foreign exchange reserves. It had reached Rs. 1.56 trillion at one time but continued to decline from the first month of the current year to Rs 1.171 trillion in mid-February. At present, the balance of payments deficit has reached Rs. 258.64 billion while the current account deficit has reached Rs. 462.93 billion. This is more than 10 percent of the size of the total economy (GDP). A current account deficit above 8 percent is considered a critical situation.