Friday, November 18, 2011

Corruption (rate) at Raxual custom

Corruption at custom check points between Nepal and India border is an accepted practice now—just ask the traders how much they have to pay extra money per truck. Now, it looks like the cost of import of goods has increased because the commission rate on 71 products entering Nepal via Raxual custom has been increased. It is reported that almost 60 percent of goods imported from India come through this custom point. Almost 1000 truck enter through this point each day.

According to this media report, Indian agents revealrf that commission (corruption) money is added to the normal fare for truck/vehicle service. It is reported that around 50 lakhs Indian rupee per day is collected as commission by Indian officials, who then let trucks enter the Nepal side of the border. This means Nepalese consumers will have to pay even for the amount illegally raked in by Indian border officials because the final retail price of imported goods includes all formal and informal costs incurred by importer.

Here are the rates:

  • Corruption rate for import using cart, truck and rail is different.
  • For small quantities, the corruption rate is IRs 800 per cart.
  • For each truck full of potatoes, the corruption rate is IRs 2000, onion IRs 3000, and maize IRs 3500. For coal it is IRs 3000.
  • Commission equivalent to one percent of total cost of machinery.

These are institutional non tariff barriers to trade!

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