Nepalese traders bear brunt of demonetization

The demonetisation drive in Indian has also hit traders in Nepal, who import raw materials and readymade products from India, and now they are waiting for the situation to normalise.

"We procure our materials from India. At present, we are not able to import new materials and other things due to the scarcity of new Indian notes," said Prabesh Agrawal, who is supplier of buttons and chains here.

"We cannot analyse situation in India after demonetisation by sitting here in Nepal, but we will get relief when it improves in India. Till then, we will have to wait," said Agrawal.

The Nepali market is mostly dependent on India for agricultural products and readymade items, including clothes, and it will face scarcity of goods in a one month when all stocks are cleared.

"We don't have new Indian currencies even for a medical check up in India due to the demonetisation move," said Mayur Goyal, a shoe trader on New Road, here.

"I want to request the governments of India and Nepal to provide some Indian currencies to Nepal residents here. I also request them to change the Indian currencies into Nepali or into new Indian currencies" said Goyal.

The Central Bank of Nepal (Nepal Rastra Bank) is awaiting the Reserve Bank of India's response on the supply of Rs. 500 and Rs.1000 currency notes to the Nepalese market. The demonetisation has not only affected the import to Nepal, it has also hit Hundi agents here.

Earlier, the Ministry of External Affairs (MEA) had on November 24 said both Nepal Rashtra Bank and Royal Monetary Authority of Bhutan are in touch with the Reserve Bank of India (RBI) regarding the facilitation of collection and deposit of old currency of high-value denominator that are already in stock in Nepal and Bhutan under existing provisions.

"The matter has been raised by both the governments of Nepal and Bhutan as well. The government is considering the matter and the RBI will remain in touch with their counterparts in Nepal and Bhutan," said MEA official spokesperson Vikas Swarup here.

Swarup said the inter-ministerial task force formed by the Centre is looking into issues relating to foreign nationals and tourists in India, NRIs/PIOs holding old currency notes.