The government's inability to make duty drawback payments on time has frustrated exporters, mainly three major Indian joint ventures: Nepal Lever, Dabur Nepal and Colgate-Palmolive, the largest sellers of Nepal-made goods in India. Nepal Lever alone has Rs 163 million blocked in the form of duty drawback, about 14 percent of its total exports, the company says. The money payable to the three companies is over Rs 400 million.

The Department of Industries and the Ministry of Finance arrange the payments. Lever officials say that of the claims submitted so far, only Rs 17 million has been settled. Some of the claims date back to 1997-98. The government introduced the new duty drawback system to remedy a situation where exporters could import goods after paying 50 percent customs duty and claim refunds after exporting finished goods.