With the government's decision to waive 90 percent customs duty on the import of sanitary pads, domestic manufacturers are worried their sales will be hit. They fear that their customers will gravitate towards foreign brands. Anushka Nepal of ApEx talks to Punit Sarda, the CEO of Jasmine Hygiene, which has been manufacturing sanitary pads, baby diapers, and face masks for the past 15 years, about the effect of this import duty waiver.
How will this waiver affect the domestic production of sanitary pads?
One thing we can be sure of is that our market will be flooded with imported goods. People are already reluctant to buy domestic products. With this reduction on import duty, there is a chance that the customers we already had might also shift towards foreign products because of the reduced price. This causes a ripple effect in the production of sanitary pads. When we are not given space in the market, there is no way we will be able to profit, let alone break even. This will make it impossible for the domestic manufacturers like us to sustain.
Why do you think people are reluctant to buy Nepali products?
I would pin it down to three things. First is the lack of branding. While multinational companies already have well-established brands, domestic companies are not given the space to place their products. This disparity makes it difficult for domestic companies to stay in the game. Secondly, it is the ‘imported goods are always better’ mentality that all Nepalis grew up with. We blindly believe that the quality of all Nepali products is inferior, without even giving them a try. Yes, I do admit that sometimes the quality of domestic products might not be up to the standard of imported products. Then again, how will domestic manufacturers improve their products if they are forced to bankruptcy? And lastly, I believe that the government itself is not being supportive enough to uplift local businesses.
What should be done to convince people?
Local manufacturers should be given a proper space to sell their products in the market. Right now, they don’t even get a properly space to keep their items in stores. And even if they do, it will be because of the profit percent they have increased for the storeowners. This shows how domestic companies are already at loss from the start. Not many of us know the sanitary pads that come from India are not certified, whereas ours are. But this fact gets ignored since branding has played a major role to push the sales number of imported products. Meanwhile, domestic companies are simply not given a proper platform to advertise their products. Customers should be given the opportunity to try both Nepali and foreign products and decide for themselves. But this is not the case in our country.
What should government do to help local businesses?
The only solution that I see government can do is increase the customs duty, not just on sanitary pads but all simple daily use products. We as a country have become reliant on other countries for everything, even for a product as simple as toothpastes and soaps. These products are simple enough to manufacture within the country and there are companies that have been manufacturing them. But these companies are not getting the platform to sell their goods. Government should create that platform, so that these locally manufactured products can find customers.
Will this waiver also affect other domestic products other than sanitary pads?
If a chain has a weak link, there is definitely going to be some sorts of trouble. It causes a ripple effect. While we are continuously being weaker in one part of our production, multinational companies are benefiting from this loss. While we are struggling to sustain our industry, they are getting a chance to improve on their other products. For them, selling their products won’t be a problem since they are already well-established brands. Domestic companies like ours have been put at a disadvantage by this waiver. We might one day lose our customers for baby diapers and face masks as well.
