Increase Import Duty to 10% to Strengthen Nepal’s Pharmaceutical Industry

Nepal is facing increasing imports, slow industrial growth, unemployment, and growing dependence on foreign products. In this situation, the pharmaceutical industry can play an important role in strengthening the economy, promoting industrial development, and achieving self-reliance. Although Nepal has 84 pharmaceutical industries with good production capacity, around 55% of medicines and pharmaceutical products are still imported from neighboring countries.

One major reason for this dependency is the extremely low customs duty imposed on imported medicines. Although the official customs duty rate is 5%, various rebates and concessions under different categories reduce the effective duty to a negligible level. As a result, imported medicines become comparatively cheaper, while Nepali pharmaceutical industries face production costs that are 15% to 20% higher than those of imported products.