Taking benefit of the duty-free facility provided by India to Nepal, traders first import betel nuts from third countries and re-export them to India by obtaining certificates of origin in Nepal.

The country produces far less quantity of betel nuts compared to what it exports to India.

Madan Shrestha, assistant director at the Regional Agriculture Directorate, said the DADOs were found to have certified a few betel nut trees planted around houses as commercial farming in Morang, Sunsari and Jhapa.

The export-quota is fixed based on the production. The DADOs write to the Agriculture Development Ministry through regional directorates about the production status.

The Agriculture Ministry then writes to the Commerce and Supply Ministry. And products are exported to India after local Chambers of Commerce and Industry issue the certificates of origin.

However, Basanta Aryal, member of Betel Nut Trees Monitoring Committee, said cultivations for household purposes are not counted in the national production, although they are counted as commercial farming.

Sources said fake production is stated to enable re-export of imported betel nuts. For example, the betel nut cultivation area was 31 hectares in fiscal 2008-09, which expanded to 198 hectares in 2009-10. In 2013-14, the area expanded to 800 hectares.

An official of at Morang DADO said cultivation for household use was counted just to calculate how much area betel nut farming covered. “It has nothing to do with the export quota,” he said.

A central member of Nepal Betel Nut Farming Development Institution Krishna Bhandari said the cultivation takes on 3500 hectares of land which produces 13,000 tonnes. A hectare of land has 1,370 plant, and a plant produces 440kg of betel nuts, he said.

There is huge demand of betel nuts in India for Gutka and pan masala industries. India has imposed a 113 percent import duty on betel nut imports from other countries, but for the imports from Nepal, the duty is just 13 percent.