SAWTEE, IFPRI workshop explores informal cross-border agri-food trade

Dikshya Singh, Programme Coordinator of SAWTEE, highlighted in her presentation that evasion of tariffs and duties, variation in prices and bans on import and export serve as key drivers of informal trade. Singh said that informal trade is highly responsive to India’s ban on exports and price variations as the result of different production costs on the Nepali and the Indian sides and tariffs in the case of products such as rice and vegetables. The study found that prices of rice across the border markets could be as high as 20%.

Posh Raj Pandey, Chair Emeritus, SAWTEE, highlighted that obstruction in the entry and exit of products, policy disruption at the domestic level and weak law enforcement at the border contribute to informal trade in Nepal. Pandey emphasised the necessity of reducing trade transaction costs to mitigate informal trade, advocating for measures such as enhancing trade facilitation, improving border infrastructure, and minimising tariff barriers.

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