Monday, November 12, 2012

China extends privilege to more Nepali exports

China is ready to fulfill its commitment to extend privilege to 95 per cent of the total tariff lines as a follow-up to the 60 per cent facility to Nepal, said Chinese ambassador to Nepal Yang Houlan, after signing an agreement to provide Nepal more duty free access to the Chinese market, here today.
However, domestic exporters have to wait for some time to get the facility as the Chinese government has to review the lists of all the Least Developed Countries (LDCs) including Nepal. The agreement would come into effect from 2013.
Nepal has to increase its limited manufacturing base and increase supply capacity to take benefit of the facility, he said, adding that the new facility will allow Nepal to export 7,787 items which will cover all the major Nepali export of Nepal to China that has increased the list to 7,787 items from earlier 4,721 products for easy access to its market.
"We believe that the duty free facility will play its role as a leverage policy in boosting Nepal's economic growth by expanding coverage of the zero duty facility in the coming days," the envoy added.
According to Trade and Export Promotion Center (TEPC) data, Nepal has been under-utilising the facility and had exported around 368 products from the zero-duty list to China in the last fiscal year 2011-12. China had offered duty free access for 4,721 export items in 2010.
Nepal's trade deficit with China has been constantly increasing as the country does not have a strong product basket as it lacks the capacity to export due to supply side constraints. Nepal's trade deficit with China in 2010-11 was Rs 45 billion and increased to Rs 52 billion in fiscal year 2011-12.
"The facility might help bridge trade deficit gap between Nepal and China, said commerce secretary Lal Mani Joshi. "Some of the products — in the list — that attract 35 per cent duty currently will come down to zero, which will definitely encourage domestic exporters," he added.
Apart from the duty free access of 7,787 items, Nepali exporters will also get duty free access, if one exports over 8000 RMB — except some products like liquor and cigarette — in a day, informed joint secretary at the ministry Naindra Upadhaya.
Tibetan Autonomous Region of China has a lots of potential of primary products — compared to manufactured products — export from Nepal, he said, adding that the exports, however, demands quarantine and certification.
Nepal's major exports to its The northern neighbour are jewellery, citrus fruits, cardamom, vegetable ghee, agri-products and handicrafts.
Though there is an increasing demand for agro-based products in China, land connectivity coupled with bureaucratic hurdles, apart from power crisis and labour troubles are the key bottlenecks in increasing exports to the Chinese market.
Data of the Trade and Export Promotion Center revealed that Nepal suffered a trade deficit of around Rs 52 billion with China in fiscal year 2011-12, when Nepal had exported goods worth Rs 985.6 million and imported goods worth Rs 52.92 billion from China.

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