Local producers are worried that their market would be impacted severely if the customs duty on imports of goods from third countries is reduced to 10 percent.
The deliberations to reduce customs duty comes at a time when cottage and small industry (CSI) market outlet in Changzamtok is becoming popular among Bhutanese and it is benefiting about 400 local producers and roughly 4,000 employees working in production units.
CSI market today has about 30 to 50 walk-in customers daily and is generating about Nu 700,000 monthly. It was established as a platform for entrepreneurs to market their products to encourage local products.
The market’s chief executive officer, Sonam Chophel, said the reduction of customs duty would impact the 400 producers and many more local producers in the country. “The reduction of the customs duty will directly hamper the small producers.”
He said the local market for local produces was in the growing stage and most of the local producers were in an infant stage. “The government should protect infant industries and our own local market.”
According to Sonam Chophel, it is difficult for local products to penetrate the market and it will be even more challenging when third countries goods become cheaper.
A local producer said the government established CSI bank, national credit guarantee scheme, and CSI market to encourage local producers. “It will kill local producers with its contradictory proposal to reduce tax on imports.”
He said if the government conducted proper research before proposing the reduction of customs duty, as it was claimed that only 20 percent import was from third countries in the Parliament. “Many new commodities from third countries are in the country during the pandemic itself and further reduction will attract many more.”
Sonam Chophel said his company, Druksell, got the contract for CSI market for five years and their aim initially was to attract tourists. “Pandemic has hampered our business modality but we cannot give up.” Druksell’s target was to earn Nu 1.5M monthly.
He said Druksell is helping producers in packaging and advocating about the standard of local products to be compatible for export and looking into establishing hub for export, which would cost about Nu 20M.
Currently, CSI market is exporting local products to 15 countries.
Edited by Tashi Dema