Entrepreneurs are unwilling to set up industries in the Special Economic Zone (SEZ) in Bhairahawa. Due to the export criteria brought by the government, industrialists are not attracted to SEZs.
There is a provision that industries established in SEZs should export at least 60 per cent of their production. So far, six industries have been set up there but one of them has met the export criteria.
Disputes between the SEZ and the industrialists have been rising due to non-export as per the standards, because of which other industries that have signed an agreement to set up industries have not started construction work.
According to the industrialists, the provision that the industry to be established in the SEZ should export 60 per cent of the total production is not practical.
Similarly, the customs policy of the government has also caused difficulties to the industrialists, they said.
The customs duty on imported raw materials is more expensive than some manufactured goods, so the products here cannot compete with the imported finished goods. Exports are not encouraged as production costs are high.
Only four months ago, the SEZ management banned Shakti Minerals from selling its products in the local market citing that it could not meet compliance.
As per the Article 6 of the Special Economic Zones Amendment Act 2075, the industry should export at least 60 per cent of its production.
Shakti Minerals had exported only 23.84 per cent of its production in the fiscal year 2019/20. Similarly, it has exported 2.56 per cent in the last fiscal year 20120/21 and about 12 per cent in the current fiscal year 2021/22.
The Bhairahawa office had stopped the sale and distribution in the domestic market and directed to export 60 per cent of the goods as they were not exported as per the SEZ Act.
Project manager of Shakti Minerals Deepak Jha said that the expected export could not be done as the SEZ became depressed without providing the required service.
However, Executive Director of SEZ Chandika Prasad Bhatt said that all the necessary services have been provided.
Apart from Shakti Minerals, Brilliant Lightning Industries, Vistar Global, Panchakanya SS Export, S Polyform and Jai Buddha Metal Craft Private Limited have started the production.
The SEZ Act has the facility to sell in the domestic market for one year after the establishment of the industry.
Industries other than Shakti Minerals, Brilliant Lightning Industries and Vistar Global have not been completed one year after the start.
Among other industries established in the SEZ, Brilliant Lighting Industry exported 58.73 per cent and Vistar Global exported 100 per cent of their production in the last fiscal year 2020/21.
President of the Siddhartha Chamber of Commerce and Industry Bhishma Prasad Neupane said that the export standard of 60 per cent of the production should be reduced.
“Industrialists do not want to set up industries due to strict provisions of export standards,” he said.
Industrialist Nawaraj Shrestha said that if the SEZ is to be run in a systematic manner, it should be business friendly in terms of policy.
Source : TRN,