Smartphones Import Drop By 61% in Nepal While Grey Market Flourishes

Smartphone import drop by 61 percent in Nepal Grey market imports increasing

21st May, Kathmandu

The number of mobile phones coming to Nepal this year has surprisingly decreased. The governmental data showed that the number of mobile phones coming to Nepal from various countries has reduced to half as compared to the previous year.

Business data for nine months from Shrawn to Chaitra, published by the Department of Customs, showed that mobile imports had been diminished compared to  61 percent compared to the last fiscal year. Both the import number and value of the mobile has decreased.

According to the department, 32 lakh 12 thousand 427 mobiles have been imported in nine months of the year. In the previous year, there were more than 52 lakh mobile imports. The cost has also decreased by 33 percent in comparison to last year. Last year, phone with a net price of Rs. 19 Arab 34 crores were imported whereas this year, the cost decreased to Rs. 14 Arab 45 Crore. This fall of mobile import is unusual in a country like Nepal. In the developing countries where the rapid expansion of communication is taking place, the drop in mobile imports isn’t natural.

According to the Nepal Telecom Authority, the number of GSM mobile users in Nepal has increased by 13 lakh since last year. The increase in the number of mobile service users despite the drop in mobile imports is a great contradiction. At the same time, the government has been preventive about the phones being brought by people through Tribhuvan International Airport.

Earlier, there were arrangements to bring 2 new mobile phones, but they were not followed. But now the rules are strictly enforced properly. According to officials of the customs office, the import should have increased after this action but that’s not the case.

Recently smartphones have been replacing cheap bar-phones. Phones costing Rs. 1000-Rs. 1500 are rarely seen in the market these days. Due to this reason, the import value shouldn’t have decrease although the number of imports decreased. The increasing use of high-value phones in Nepal is aided by another fact. The number of mobile broadband internet users is growing rapidly. According to the Telecommunications Authority, 14 lakh subscribers of Nepal Telecom have been added during the period from Shrawn to Falgun. Similarly, about 3 lakh new subscribers have been known to use Ncell in the same period.

The businessmen have said that mobile traffickers have entered Nepal and the government could not cope with it. They have expressed their concern about the recent drop in mobile imports due to the policies taken by the government. The government had taken back the provision of tax exemption. According to the businessmen, mobile phones are being brought in Nepal by fooling the customs. Some businessmen have filed a complaint to the Nepal Telecommunications Authority saying that the business of importers paying tax is in trouble due to the illegal smuggling of phones.

Until last year, the government would give up to 40 percent of the returnees from 13 percent tax exemption at customs point on mobile import. From the current fiscal year, Finance Minister Yuvraj Khatiwada has removed the facility and added 5 percent tax at customs for mobile import. Businessmen claim that the Ministry of Finance’s officials are concerned about revenue and it has led to an increase in illegal acts to bring mobile phones to Nepal.

Custom officials are not ready to accept it. For the same reason, the demand of mobile phones in Nepal has come true since this year.

A system to track illegally imported mobile phones has been under preparations for 2 years. But Nepal Telecom hasn’t been able to successfully start the system yet. Such technologies that can be used to block the service provided to illegal mobile phones in Nepal can easily prevent smuggling. Authorities spokesperson Min Prasad Aryal said that now the complaint regarding the illegal import of mobile and selection of the company to properly implement the proposed is at a final stage. He said, “If this technology is started, import of illegal mobile phones can be stopped in Nepal.”

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