China to provide duty free access to more products

China has increased the list of Nepali products that will get zero tariff facility in its market.

"China has increased the list to 7,787 products from the earlier 4,721 products for easy access to the Chinese market," said commerce secretary Lal Mani Joshi.

The northern neighbour will sign a bilateral facility agreement for more Nepali products tomorrow at the Ministry of Commerce and Supplies , he added.

Chinese ambassador Yang Houlan and secretary Joshi will sign the agreement, but the modality will be finalised in about a month.

China has offered duty free entry facility from Least Developed Countries (LDCs) including Nepal but the country has been failing to take advantage from the earlier list because most of the products in the zero tariff list were not products of Nepal's export interests.

China had offered duty free access for 4,721 export items in 2010.

According to data, Nepal had exported around 368 products from the zero-duty list to China in the last fiscal year 2011-12.

Nepal's trade deficit with China has been constantly increasing as Nepal does not have a strong product basket, and also 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.

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 (TEPC) 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.