The Nepal Instant Noodles Industries’ Association (NINIA) has warned of raising the prices of instant noodles if the government does not annul the excise duty imposed on instant noodles and reduce the import duty on packaging material and palm oil.

Speaking at a press meet organized in the capital Saturday, they also claimed that the provision would adversely affect Nepali instant noodle’s competitive edge in the South Asian market.

The budget for the coming fiscal year 2006-07 presented by finance minister Dr Ram Sharan Mahat last Wednesday imposed excise duty of Rs 10 per kg on noodles and hiked import duties on palm oil and packaging materials by five percent each.

Addressing the program, chairman of NINIA Ganesh Bhakta Sakha demanded the withdrawal of the provision saying that a similar practice had already been revoked in India.

“The excise duty and hike on import duty on raw materials would directly hit consumers, as instant noodles has already become an important daily food item of Nepali people,” he added.

Despite rising inflation and rise in transportation charges, the price of noodles has remained constant for the last one decade, mainly due to cutthroat competition, Sakha added.

Rabindra Man Shrestha, CEO of Himalayan Snax and noodles, said that the proposed excise duty and hike on raw materials could cause an accumulative hike of 25 percent on finished products.

According to him, the price could go up by 75 paisa to Re 1 per packet, if the government remains firm on its decision.

Nepal’s instant noodle industries employ about 10,000 people and pays about 600 million rupees to the government in revenues. The government expects to raise additional revenue rupees from the new provision.