As per the recent unified circular issued by Nepal Rastra Bank (NRB), auto parts dealers in the country now have to keep a 100 percent margin on the import of brake pads, brake linings and clutches. Surprisingly, some of the essential spare parts have been included under the same import harmonic code of marble and granite. This provision includes brake pads, brake linings and clutches in the harmonic code 68.13.

‘This could lead to a shortage of these items and it can also foster counterfeit products in the market’, said one of the entrepreneurs on the condition of anonymity. He further added such provisions will encourage illegal traders in the market. Also, this could lead vehicle maintenance charges to increase. The NRB had made it mandatory to keep a margin of up to 100 percent on the import of certain items as per the policy of reducing imports.

Automobile importers in the country now have to maintain a 50 percent margin when opening the letter of credit (LC). Earlier, importers were allowed to keep a margin of 1 percent only. This amendment by Nepal Rastra Bank is expected to increase the price of vehicles and motorcycles in the market. However, this does not apply to electric vehicles and imports from government agencies, diplomatic missions and hospitals.

Read: Vehicle Import Becomes Costly; 50% Margin Now Compulsory To Open LC