The coronavirus pandemic devastated economies around the world. The situation isn’t any different in Nepal. But the border closure and other restrictions imposed in the wake of Covid-19 brought temporary relief to a problem that the Nepal government had long struggled to rein in: the illegal import of mobile handsets costing loss of taxes. 

According to a report on The Kathmandu Post, the country recorded a whopping, around 84 percent year-on-year increase, jump in the amount spent on the purchase of mobile handsets. A total of $206 million were spent on it despite a flattened economy. The figures are for the first seventh month of the current fiscal year.

In the same period, the government earned around $32 million from the sale of these mobile phones. The border closure and the travel restrictions eliminated the grey market that runs through land and air smuggling channels.

“There was a significant rise in government revenue collection after the grey market was snuffed out following travel and transportation bans,” Sanjay Aggrawal, the vice-president of the Mobile Phones Importers Association, was quoted as saying by The Kathmandu Post. 

A rough estimate suggests around 40-50 percent of total mobile phones sold in Nepal come illegally, through smuggling channels from India, Sanjay said.

The number of devices sold in the period also saw a 200 percent jump in the same period, largely due to the growing trend in online classes amid the pandemic.

For a long time, the government has been working to reduce the illegal import of smartphones. A system -- the Device Identification Registration and Blocking System -- is yet to come into effect in the country.

“We have been putting pressure on the Nepal Telecommunications Authority to implement the provision, and it has said that it will be done within three months,” Sanjay said. Not only the government but the traders also suffer from it, he added.