The private sector has urged the government to fully lift the import restrictions as soon as possible stating that a long-term ban may impact domestic and foreign investments.

“The prices of commodities and petrol are declining in the international market. The balance of payment, the tourism sector and the labour market are improving,” said Vishnu Agrawal, president of the Confederation of Nepalese Industries, speaking at Kantipur Conclave organised by Kantipur Media Group in Kathmandu on Sunday.

“In such a situation, restricting imports will not send a good message,” he said.

Agrawal said that if the ban is prolonged, it will impact businesses and discourage investors from investing in Nepal. “This could hurt the economy and increase the unemployment rates.”

Shekhar Golchha, president of the Federation of Nepalese Chambers of Commerce and Industry, said there is a stagflation-like situation in the country as the prices of goods are increasing and at the same time there is no demand at all.

“The situation has become alarming and it seems like it is not going to be resolved in a short time,” he said.

“We are an import-based economy. We earn from remittance and spend on imported goods,” Golchha said.

“This is the main challenge of the economy. To solve this fundamental problem, a long-term solution like increasing the value addition in trading business and gradually displacing imports with domestic production is required.”

Rajendra Malla, president of Nepal Chambers of Commerce, said that the government has an ambitious target of achieving 8 percent economic growth and taming inflation at 7 percent this fiscal year, which seems difficult.

“The entrepreneurs are not getting loans. Traders have to keep a 100 percent margin to import goods due to which the price on all goods has been increasing,” he said.

The agriculture sector and women entrepreneurs are still facing problems getting loans from the banks despite the government’s mandatory provision, he said.

The government, on August 30, lifted the ban on six goods including diamonds, television sets larger than 32 inches, toys, cards, snacks and tobacco and tobacco-related products.

An embargo on 10 types of products deemed as “luxury goods” has been in place since April 26 to conserve foreign currency. On July 17, the Nepal government extended the embargo till August 30.

Amid criticism that the government has allowed imports of playing cards, Ganesh Prasad Pandeya, secretary of the Ministry of Industry, Commerce and Supplies, said that it was opened following the request of the Tourism Ministry.

“The casino entrepreneurs, the Department of Tourism and Tourism Ministry had requested us to lift the ban on cards as it was hurting the casino business,” he said. A casino requires 3-4 packets of cards a day and they cannot be reused, he said.

“The import of cards, however, is not making a negative impact on the foreign currency reserve.”

Neelam Dhungana Timisina, deputy governor of Nepal Rastra Bank, said that the current restriction would help the country to import goods in the future.

“Attempts need to be made to bring remittance through legal channels. There is also a need to increase foreign direct investment to help boost economic growth,” she said.