Nepali products like vegetable, ghee, jute products and fast moving consumer goods like noodles will now invite a 4 percent duty while being exported to India.
According to the Indian embassy in Kathmandu, a decision has been made to bring all imported products to India at par with the excise duty being charged on Indian products in the same categories.
According to the source, "the current widening of the net" is part of the Indian budget plans and it does not violate the trade treaty between India and Nepal.
"Products that are being exported to India are subject to the 4 percent incise duty, which is to be levied on all imports to India from all countries," the official said.
The duty is being charged in terms of sales tax, transportation tax and value-added tax, he added.
"Under the trade treaty signed by the two governments in 2002, Nepal is to get preferential treatment from India. The recent development does not adhere to the commitments," president of Federation of Nepalese Chambers of Commerce and Industry Chandi Raj Dhakal told reporters here on Sunday.
"Nepali agricultural products, that are being exported to India from Nepal, will find more difficulties to compete on the Indian market," Dhakal said.
"Though the Indian government had assured us that they will not create a bottleneck for Nepali products that are being exported to India, the recent pronouncement will mean a disaster for Nepali industries," he added.