The countervailing duty (CVD) that was imposed on Nepali jute products exported to India has been lifted by the Indian government. The exemption of CVD is likely to enhance the export of these jute products to India substantially, thus proving beneficial for the jute sector of Nepal. The notification has been issued by the Indian Embassy in Kathmandu.

"The Government of India has abolished imposition of CVD on the Nepalese jute products," reads the notification.

The Government of Nepal had requested the Indian government to lift CVD as the Nepali jute industries was already suffering from constraints of various kinds and imposition of CVD on Nepali jute products completely halted the export of the Nepali jute products to India.

The Government of India favourably considered the request of the Government of Nepal and issued a notification to lift the duty.

"The abolition of CVD is likely to substantially enhance export of Nepalese jute products to India and thereby help the people engaged in the jute industry of Nepal," added the notification.

Indian government had imposed an excise duty of 12.5 per cent on Nepali jute yarn, fabric and jute bags. The restriction had attracted a lot of criticism from the private sector and the Government of Nepal, who believed it violated the Nepal-India Trade Treaty that offers duty-free access to Nepali jute products to India.