CSI fears reducing Customs Duty on goods from third countries will affect their business

Small and Cottage Industries in the country fear that reduction of customs duty to 10 per cent on goods imported from third countries will affect the already struggling local businesses.

The CSI market in Changzamtok is a platform for about 400 entrepreneurs to market their local products. With the Customs Duty revised, the products there will now have to compete with goods imported from the third countries. They said it will be difficult for them to sustain a business when imported goods become cheaper.

“The moment we allow imported products coming in at reduced customs duty, there will be lots of traders who will want to bring in products. If you walk in Thimphu town, there will be more foreign goods than Indian goods. And CSIs are equally participating in this market,” said Sonam Chophel, Chief Executive Officer of CSI Market.

“If we look at the current situation, the turmeric products from agricultural groups in villages are there. But if we look in the market, it is filled with turmeric from India. If the tax is imposed, it will be difficult to compete,” added Ugyen, General Manager of Bio Bhutan Private Limited.

The government reasoned that the revised Duty will help the Small and Cottage industries in importing raw materials and packaging materials for the local produce. But the local producers say it makes no difference for them.

“Tax on raw materials is already exempted. So, what difference does it make for us after the customs duty is reduced? I don’t think it’s giving us much value,” said Sonam Chophel, CEO of CSI Market.

According to the CSI annual report 2019-2020, more than 95 per cent of the industries in the country are in the category of small and cottage industries. There are around 22 thousand active licensed CSIs in the country. They generate more than 100 thousand job opportunities. Local producers say they would not be able to employ many people if businesses are affected.

Both National Assembly and National Council passed the Customs Amendment Bill 2021. Now it is up to the small and cottage industries to see how they can compete with imported goods to thrive in the market.

Sangay Chezom 

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