Export from Nepal to India in the last three years, has significantly jumped from Rs 41 lakhs in 1996-97 to Rs 2,285 lakhs in 1999.

The unchecked surge in Nepalese plastic goods imports in India, has been around 76 items within just two years.

According to Organisation of Plastic Processors Of India (OPPI), president, VK Taparia, over 30 plastic processing units in various states have already shut down, and a large number of other plastic good manufacturing units all across the country are on the verge of closure, as they are unable to compete with Nepalese exporters who enjoy the twin benefits of duty free import of raw material in Nepal, and duty free imports of Nepal's finished products in India. Only the countervailing duty (CVD) is charged on the borders and that too on substantially under-invoiced items. As a result, Nepalese manufacturers are able to sell their material at a substantially discounted price, than their Indian counterparts.

Nepalese exporters are catering to a major part of the eastern and northern markets, and it will not be long before they penetrate the entire country.The Indian plastic processing industry is already reeling under the impact of cheap chinese imports, depreciation of the Indian rupee by 7 per cent since April 2000 and import duty of 38.5 per cent on polymers particularly in HDPE, LLDPE, PP and PVC are finding its very survival at stake.

Mr Taparia said, manufacturers will be left with no option but to shift base. As done by Colgate, Hindustan Lever and others from the FMCG sector, who have subsidiaries in Nepal for supplies to India, are now being followed by some of the domestic plastic processors. Under the Indo-Nepal Trade Treaty-1991 duly amended in 1996, India provides duty free access to the Indian market, without quantitative restrictions, on a non-reciprocal basis, to all Nepal manufactured articles.

OPPI along with other associations, urged Mr Yashwant Sinha, finance minister through a joint representation, to lower the import duty on polymer raw materials to 15 per cent from the current level of 38.5 per cent.Finally Mr Taparia said: " that the closure of plastic processing units all over India, is the final wake-up call for the government and wondered whether the authorities were waiting for something more disastrous to happen"In fact, most of the processors has found a new export market in China and Nepal, due to low duty structure. They have regular interaction with the importers of these countries, for more orders as compared to other domestic competitors.

Domestic market has split into two, one sides that section of the community who has received the export order from these countries and will not speak anything, and on the other side are those who have not. Hence, why a section of the processing community is showing ill-will towards their fellowmen, was a question raised by a leading plastic processor.