Bihar mill surge eating into Nepal rice industry

THE number of rice mills in Birgunj has drastically dropped because of the surge in the number of ultramodern rice mills in bordering Indian territory in the recent days. Around 100 big and small mills were in operation until a couple of years ago, out of which only 20 are in operation today. Bihar Chief Minister Nitish Kumar on Thursday inaugurated Ripuraj Rice Mills established at Aamodehi, Raxaul in April. Rameshwor Prashad Gupta, director of mills, said the factory besides supplying its products to different Indian states will also export to 10 countries. The Bihar state government has proposed to invest IRs 150 million in the Raxaul area to operate food plaza. Nabin Kumar, chief secretary at the Industry Department of Bihar government, and Rashmi Burma of Finance Department from the central government flouted the proposal to this effect on June 8 during their site visit of the Ripuraj Mills. Around a dozen rice industries with a daily capacity ranging from 200,000 to 300,000 tonnes have opened in the vicinity of Raxaul. This has also led to the closure of around 75 percent of mills in Bara and Parsa districts in Nepal. Even a major of the factories around are struggling to operate in full capacity. Tara Kalawar, director of Om Food Industry based in Allau, Birgunj, said the factory’s production has come down by 50 percent. The Bihar government has offered incentive and tax exemption for establishing such industries. Kalawar said a number of industries producing rice were established after the Indian government imposed a ban on rice exports a few years ago. The relaxed provision on the Indian side of the border has pile pressure on the Nepali factories. “The industrialists are now facing difficulties to pay interest on their loans,” said Kalawar. Officials at the Birgunj Chamber of Commerce and Industry said the domestic industries are facing challenges to survive as the government dœs not have different customs policy on the import of paddy and rice. The government charges five percent agriculture tax on the import of paddy and rice. The local industrialists said higher quality rice is being imported under low quality brands to evade tax. “We have asked the customs office to evaluate the rice as per its families,” said Ashok Vaidhya, president of the Birgunj chamber. Customs chief Ramhari Aryal said his office will revise the customs valuation rate of rice within a month. “We are discussing the problems of local industrialists. We will soon revise the customs valuation rate,” he said. Rice worth Rs 1.49 billion and paddy worth Rs 3.99 billion was imported through the Birgunj customs.