Palm oil tops the export basket

Export of high-value products – identified by Nepal Trade Integration Strategy (NTIS) – dropped by 6 per cent year-on-year to Rs14.8 billion in the first five months of the current fiscal year, though government has prepared the NTIS list with much hope and expectation.
The government – with the help of development partners – has prepared NTIS 2016, the third-generation trade integration strategy, with nine high-value products and three services to bridge the ballooning trade deficit. However, a non-NTIS product – palm oil – has topped the list of export basket failing the government’s home work of years. 
According to the Trade and Export Promotion Centre (TEPC), palm oil exports contributes to 25 per cent of the total exports as it rose to Rs 11.5 billion – in the first five months – also nearly eight times the amount shipped in the same period last year.
Tariff exemptions on Nepali exports to India under the South Asian Free Trade Area (SAFTA) Agreement have domestic traders an incredible advantage. As countries outside of South Asia are slapped with tariffs of 54 per cent on palm oil and 45 per cent on soybean oil, Nepali traders took the advantage of tariff difference to push exports of palm oil and soybean oil to India, according to the World Bank Nepal Development Update released in December. “Nepal capitalised on the arbitrage opportunity and significantly increased exports of the two products,” it reads, adding that it might, however, not be a sustainable option in the long run. “The export performance of products under the NTIS including all fabrics, textile, yarn and rope, cardamom, carpet, footwear, ginger, leather, medicinal and aromatic plants, pashmina, and tea was dismal in the last fiscal year, contracting by 4.8 per cent year-on-year compared with an expansion of 17.9 per cent year-on-year in the fiscal year 2017-18.”
The high-value products – under NTIS – also dropped due to a fall in production, eroding competitiveness of Nepali products because of lack of inspection and quality checks. Though, large cardamom exports soared by 50.7 per cent to Rs 1.86 billion, shipments of all other products including ginger, tea, medicinal and aromatic plants, fabrics, yarn, textiles, rope, leather, footwear, pashmina and carpets were down, compared to the same period last fiscal year.
Exports of pashmina – one of the ‘pride products’ – declined by 17 per cent to Rs 1 billion due to a lack of effective branding and promotional activities in the international market.
The TEPC data reveals that ginger exports slipped by 14.65 per cent to Rs 236 million, whereas tea plunged by 24.88 per cent to Rs 1.45 billion despite 5 per cent cash incentive on exports of processed tea, large cardamom, ginger, leather goods, processed medicinal herbs and oil products with value addition of at least 50 per cent.
According to the World Bank, Nepal’s export value to GDP ratio reached 1.1 per cent, lower than the 4 per cent target set for 2020, due to a lack of raw materials, skilled manpower and required infrastructure like processing centres, lab testing and storage facilities.
The sharp rise in exports of palm oil, which has no ‘value addition’, could largely impact Nepali farmers as it could offset the demand for Nepali products but traders keep exploiting easy loopholes on foreign products that yield them higher profits, and the incumbent government is also encouraging them to show off the increased exports during its tenure.
Time and again, traders have been taking advantage of the duty difference but it has not been sustainable business as there have been instances of betel-nut, vegetable ghee, and many more. 

Revenue collection growth rate plunges

The government witnessed slump in revenue mobilisation in the first four months of the current fiscal year 2019-20 due to fall in imports.
The revenue mobilisation growth rate stood at just 3.56 per cent in the first four months, compared to the average growth rate of 20.85 per cent in the same period in the last five fiscal years, according to the Finance Minister.
The Finance Ministry has been able to mobilise Rs 256.77 billion – an increase of 3.56 per cent from Rs 247.94 billion last year’s four months – in the four months of the current fiscal year due to failing imports as the key source of revenue is imports.
The revenue mobilisation dropped due to reduced imports of diesel, petrol, cement clinkers and vehicles, which in the previous fiscal years contributed massively to the state coffers. According to the Trade and Export Promotion Centre (TEPC), import of petroleum products decreased by 15.4 per cent, iron and steel by 26.5 per cent, and transport vehicles and their parts by 6.3 per cent in the first four months of the current fiscal year. “These account for three of the top four products, alongwith cement, in terms of import value,” the centre said, adding that overall imports during the first four months decreased by 6.9 per cent.
Due to fall in imports – which the government claims to be its success – customs duty also decreased by R 2.43 billion and import-based value-added tax (VAT) mobilisation also dropped by Rs 3.94 billion. The heavy slump in average growth rate in revenue mobilisation will be a serious cause for concern as it will force the finance minister to down size the budget alongwith revenue mobilisation target like in the last fiscal year. Despite massive imports in the last fiscal year, finance minister Dr Yuba Raj Khatiwada faced a revenue shortfall of Rs 114.34 billion.
Apart from government failing to meet revenue mobilisation target, the reduced imports of construction materials and equipment also suggest that the economy is not performing well as the construction – that can create not only employment but also help capital formation in future – is slowing down.
The slowdown will lead to a vicious cycle of undergrowth, according to the economists. The government has projected 8.5 per cent economic growth in the current fiscal year but economists claim that the shrinking economic activities – also due to government policy failure – will bring the economic growth down. The World Bank has projected a more modest growth rate of 6.4 percent, though other development partners have also projected the growth rate to be around 5 per cent to 6 per cent.
However, revenue secretary Sishir Kumar Dhungana claimed that the reduced imports will ultimately help reduce the ballooning trade deficit. “The government is focusing on boosting domestic revenue and controlling leakages in customs-based revenue,” he said, adding that the government is focusing on increasing non-tax revenue including royalty, rent, property income, dividends, sales of goods and services, and administrative fees.
Dhungana, however, claimed that the fall in revenue mobilisation has not hit the government’s capacity to finance development projects. “There has not been much pressure on the government due to slow spending of grants provided to provincial and local governments and low expenditure in post-earthquake reconstruction.”

Nepal and Bhutan to sign trade agreement

Nepal is planning to sign a trade agreement with Bhutan hoping to expand trade between the two countries.
According to the Ministry of Industry, Commerce and Supplies, Kathmandu and Thimpu are holding a series of joint secretary-level meetings starting from August 29 to discuss a trade protocol, after a Bhutanese delegation arrives in Kathmandu.
Though, both the countries are members of various multilateral trade regimes including South Asian Association for Regional Cooperation (SAARC), Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMST-EC) and Bangladesh-Bhutan-India-Nepal (BBIN), they have not yet signed any bilateral trade agreement till date.
They will discuss ways to simplify trade barriers and finalise the rules of origin (RoO) before signing the trade protocol, according to the ministry. “Nepal will ask Bhutan to provide duty-free access to local products with a value addition of 25 per cent and above under the rules of origin,” the ministry informed. But Nepal is, currently, receiving preferential treatment from a number of countries on exportable goods that have a minimum 30 per cent to 40 per cent value addition.
Nepal has signed trade agreements with 17 countries including India, China, Bangladesh, South Korea, Pakistan, Sri Lanka, the US and Mongolia. And Nepal has also signed bilateral preferential treatment arrangement with India while it receives preferential treatment from China, the US and European countries.
China provides duty-free, quota-free access to more than 8,000 Nepali products, though Nepal does not produces most of the products in the list. Likewise, the US also offers access to 77 tariff lines under the Trade Preference Programme (TPP), while the European Union (EU) provides duty-free access to products imported from the least developed countries (LDCs) including Nepal under the ‘Everything but Arms’ scheme. But Nepal has very few products to export to these countries, as the country is import-based economy and has never promoted exports.
Nepal has not been able to exploit the preferential treatments from trading partners also due to lack of exportable items. Thus, signing the trade agreement with Bhutan also seems not beneficial to Nepal as Nepal has not much to offer to Bhutan either.
Likewise, Bhutan is a small market dependent on imports from India and Bangladesh. Nepal will have to compete with Indian and Bangladeshi products in the Bhutanese market. Nepali products have been not able to compete with Indian, and thus the Nepal-Bhutan trade agreement could not bear much expected benefit for Nepal. “If Nepal needs to take advantage, Nepal and Bhutan must enter into a transport agreement first to benefit from bilateral trade,” according to trade experts.
Nepal will also have to provide similar facility to Bhutanese products on a reciprocal basis after signing a trade agreement with Bhutan, which might not be in Nepal's favour as it has been facing a widening trade deficit even with this SAARC member country.
Nepal has been facing a growing trade deficit with Bhutan, according to the Trade and Export Promotion Centre (TEPC). “Nepal exported goods worth Rs 162 million to Bhutan against imports of Rs 1.67 billion, resulting in a trade deficit of Rs 1.51 billion,” the TEPC data revealed, adding that the trade deficit with Bhutan stood at Rs 284.41 million in the fiscal year 2014-15.
Nepal imports gypsum, coal, heavy equipment, boring machinery, juice and industrial equipment, among others, from Bhutan, whereas it exports iron rods and alloy of aluminium, transformer, snack, soap, furniture, woollen carpet, farm products, jute bag and cooking appliances to Bhutan.

Trade deficit touches Rs 1.21 trillion per cent

While Nepal has exported goods worth Rs 87.83 billion, it has imports Rs 1.29 trillion worth goods widening the trade deficit to Rs 1.21 trillion in the 11 months. The trade deficit – of the 11 months of the last fiscal year – stood at Rs 1.03 trillion.
According to Trade and Export Promotion Centre (TEPC), the contribution of exports in the country’s foreign trade reached 6.3 per cent in the first 11 months of the current fiscal year, which is up by 19.2 per cent compared to the same period of last fiscal. “In the first 11 months of current fiscal year, Nepal exported goods worth Rs 87.83 billion,” the centre informed, adding that the country had exported goods worth Rs 73.69 billion in the same period of last fiscal year. Nepal had exported Rs 67.60 billion worth goods in the fiscal year 2016-17.
Nepal’s top exports include polyester thread, palm oil, woollen carpets, iron and steel products, readymade garments, jute and jute products, juice, cardamom, tea and pashmina, according to the TEPC report that further reads that Nepal exported polyester and other threads worth Rs 9.03 billion, which is 19.4 per cent more in the 11 months of the current fiscal year compared to the same period of the last fiscal year. “The export of iron and steel products stood at Rs 5.97 billion, while Nepal exported carpets worth Rs 6.77 billion.”

Nepal International Trade Fair from March 28

Federation of Nepalese Chamber of Commerce and Industry (FNCCI) is organising the eighth Nepal International Trade Fair in Bhrikutimandap from March 28 to promote the international market for Nepali products.
The fair – supported by the Ministry of Industry, Commerce and Supplies – will showcase 225 stalls featuring domestic and imported goods and services like handicrafts, tourism, information technology, agri products, energy, real estate, and education. "Ninety stalls will be from China," informed the FNCCI. The event is promoted by the Trade and Export Promotion Center (TEPC). Likewise, the Lalitpur Chamber of Commerce and Industry (LCCI) and Federation of Handicrafts Associations of Nepal (FHAN) are the co-organisers of the event.
The five-day event is bringing together entrepreneurs and traders from India, China, Bangladesh and Pakistan, according to FNCCI that organised a press meet today.
Handicraft items and domestic products like ginger, tea and Pashmina which are included in the Nepal Trade Integrated Strategy- 2016 will be the major attractions of the fair that will see greater interactions with business delegates from China, business talks and the signing of an agreement for joint-venture.
It is expected that high-level foreign delegations scheduled to arrive here to participate in the Nepal Investment Summit 2019 (March 29-30) will visit the event, further increasing its importance, according to FNCCI president Bhawani Rana. "Bilateral and multilateral meetings with business delegates have been scheduled on the sidelines of the fair."
Some 100 thousand people from home and abroad are expected to visit the fair which will conclude on April 1. 

Experts urge revision of trade agreements with Bangladesh

Nepal needs to revise its trade- and transit-related agreements with Bangladesh to address the growing complexities between two countries in their trade relations to benefit domestic exporters that see potential for their goods in the Bangladeshi market, according to the participants of an interaction programme 'Nepal-Bangladesh Trade: Opportunity and Challenges' jointly organised by the Ministry of Industry, Commerce and Supplies (MoICS); South Asia Watch on Trade, Economics and Environment (SAWTEE) and Morang Merchant Association (MMA) in Biratnager today.
Minister for Industry, Tourism, Forest and Environment of Province 1 Jagadish Prasad Kusiyat, on the occasion, said that Bangladesh is an important trade partner of Nepal due to its proximity, but the trade potential is under-exploited and the province government is committed to improve Nepali exports to Bangladesh.
Likewise, president of Morang Merchant Association (MMA) Pawan Kumar Sarda said that Nepal’s duty for Bangladeshi products are less compared to the tariffs imposed by the Bangladeshi government for Nepali products. "In addition, Nepali products face number of non-tariff barriers in Bangladesh due to which our export to Bangladesh is in decline while Bangladesh’s export to Nepal is increasing," he said, adding that Nepal is importing goods which are domestically produced such as juice and potatoes, and suggested we stop importing such goods from Bangladesh.
"The government is in process of renewing trade treaty with SAARC countries including with Bangladesh," joint secretary at the Ministry of Industry, Commerce and Supplies Rabi Shankar Sainju said. "Nepal and Bangladesh have agreed to provide preferential market access to some of their identified products, and Nepal is in process of identifying such products to be included in the list."
SAWTEE chair Dr Posh Raj Panday, on the occasion, made a presentation on Nepal-Bangladesh trade relations and avenues for collaboration. He stated that Nepal’s trade with Bangladesh takes place through Trade and Payment Agreement between Nepal and Bangladesh, Transit Agreement between Nepal and Bangladesh, and also through the regional, sub-regional and multilateral, international agreements signed by the two countries. He pointed out that the Most Favoured Nation (MFN) treatment Nepal gets under these agreements is not adequate to address growing trade deficit with Bangladesh. Pandey also suggested concluding a preferential market access agreement with Bangladesh to address market access issues – including transit, para-tariff and non-tariff barriers – for exportable products and protection of domestic sector, industry.
Trade Facilitation Advisor at Nepal-India Regional Trade and Transport Project (NIRTTP) of the Ministry Himal Thapa also pointed out that for the smooth transit traffic to Bangladesh, tripartite transit agreement needs to be signed between Nepal, Bangladesh and India for rail and truck movement to each other’s countries. Suggesting to establish institutional arrangements representing Nepal at the port and transshipment hub of Bangladesh, he said that Motor Vehicle Agreement (MVA) between Nepal and Bangladesh needs to be finalised and signed.
"The entrepreneurs should come forward with concrete products to promote in the Bangladeshi market," executive director at the Trade and Export Promotion Centre (TEPC) Sarad Bickram Rana, said, on the occasion.
Likewise, vice president of Federation of Nepalese Chamber of Commerce and Industries (FNCCI) Kishore Pradhan stressed a strong need for identifying products with market potential in Bangladesh along with prudent negotiations with the Bangladeshi government for our easy access in their market.
Participants of the interaction suggested agricultural and dairy products such as spices, fresh fruits and vegetables, ghee are products with high export potential to Bangladesh. They also highlighted that their province – Province no 1 – can be the gateway to export trade with Bangladesh due to its proximity with Bangladesh. Participants also stressed the need to improve border customs in both sides and shortening the documentation process while exporting to Bangladesh. They also stressed the need for simplifying the visa obtaining process to go to Bangladesh without having to go to the Bangladeshi embassy in Kathmandu.

Trade deficit widens to Rs 570 billion

Trade deficit widened to Rs 569.50 billion in the first five months of the current fiscal year due to a meager exports and increasing imports.
"Soaring imports of petroleum products, construction materials, machinery, automobiles, electric appliances and airplane parts pushed the trade deficit high up," according to Trade and Export Promotion Centre (TEPC).
These products accounted for 49 per cent of the country’s total import bill, the data further states, adding that the country's largest import –petroleum products – stood at Rs 88 billion. "The trade deficit increased by 35.5 per cent year-on-year and reached Rs 115.03 billion last month (mid-November to mid-December)."
The import to export ratio jumped to 16.2:1, which means Nepal spent Rs 16.2 on imports for every rupee it earned from exports.
According to the TEPC, the exports inched up by just 12.3 per cent to Rs 37.5 billion by the mid-December compared to a 33.8 per cent jump in imports, for which Nepal paid Rs 607 billion.
After petroleum products, imports of iron and steel products that valued Rs 73.23 billion stood the second largest imports, whereas imports of machinery worth Rs 48.36 billion stood third largest item on imports bill. "Nepal paid Rs 44.12 billion for automobiles and parts, and Rs 23.23 billion for electrical equipments' imports. "Imports of aircraft and parts soared more than fourfold to Rs 18.26 billion while imports of apparel and clothing accessories swelled more than threefold to Rs 16.46 billion."
Nepal's imports of agricultural goods increased by 14 per cent to Rs 91 billion, despite being the country an agriculture country, according to deputy executive director of the TEPC Suyash Khanal. "On the contrary, export earnings from farm products increased by 26 per cent to Rs 11.44 billion making Rs 80 billion deficit in agriculture products trade only."
"Demand for non-agricultural goods like woolen carpets, readymade garments, pashmina and yarn has been encouraging in recent days," executive director of the Trade and Export Promotion Centre Sarad Bickram Rana said, adding that export earnings from polyester and cotton – the country’s largest exports – increased by 20 per cent to Rs 3.82 billion. "They were followed by woollen carpets and readymade garments with export earnings of Rs 3.3 billion and Rs 3 billion, respectively."
Nepal exported some 59 per cent – of its total exports – to India, whereas imported some 64 per cent – of the total imports – from India, whereas Nepal imported 22 per cent from China.

Nepal-Bangladesh to jointly promote trade, tourism

Nepal and Bangladesh could promote trade and tourism jointly, according to a higher Bangladeshi official.
Addressing a Round Table Meeting on 'Nepal-Bangladesh Relations: Exploring Trade and Commerce', in Kathmandu today jointly organised by the Asian Institute of Diplomacy and International Affairs (AIDIA) and Embassy of the People’s Republic of Bangladesh commerce secretary of Bangladesh Shubhashish Bose said that Nepal and Bangladesh could both develop a joint tourism package. "Both the countries can cooperate to formulate such policies that could offer a joint package to the tourists who can visit both the countries easily," he said
Saying that Nepal could be the chief exporter of commodities like tea, garlic, lentils, cardamom to Bangladesh, he also suggested that Export Function Bureau of Bangladesh and Trade and Export Promotion Centre (TEPC) of Nepal could sign a Memorandum of Understanding (MoU) to better facilitate trade and commerce between the two nations.
The visiting Bangladeshi commerce secretary Bose, on the occasion, said that both the nations need to cooperate to be self-reliant and support the South Asian market rather than wholly depend on their Western or European counterparts.
Likewsie, commerce secretary Chandra Kumar Ghimire, on the occasion, emphasised that the population of Nepal has great potential, if guided in the right direction and the utilisation of the demographic dividend will be in its full form if proper actions taken in the form of education and practice. He mentioned that partnership with our immediate neighbour like Bangladesh is necessary to achieve the estimated gross domestic product (GDP) of Nepal to be 8 per cent in the next fiscal year. "Liberal policies are necessary regarding tariffs and connectivity," he said, mentioning the agendas like generation and export of hydropower sector in Nepal, tariff related issues, and preferential market access, Rohan Singbad route, simplification of pharmaceutical products, etc will be put into action.
He also expressed the need of trilateral cooperation between Nepal-India-Bangladesh to better facilitate trade and commerce.
Likewise, president of Confederation of Nepalese Industries (CNI) Hari Bhakta Sharma, on the occasion, wished to see the trade agreement happen between both the nations regarding the hydropower sector. He talked about the acute deficiency of infrastructure regarding tourism which needs to be developed to better enhance revenue from tourism industry. Sharma also suggested that there can be a common visa for Bangladeshi tourists to India and Nepal. He mentioned that a lot of things need to be done in future but the most important thing to be done is the immediate implementation of the decisions made.
Ambassador of Bangladesh to Nepal Mashfee Binte Shams concluded the round table, which aimed at discussing the possible trading arenas between the two countries focusing on connectivity through which trade between the two neighbouring countries can flourish and benefit both the parties, according to the organisers.

Nepal claims to be self reliant in paddy in three years

The government has claimed that Nepal will be self-sufficient in paddy within three years.
Addressing an interaction in Kathmandu today, deputy spokesperson for the Agriculture Development Ministry Shankhar Sapkota, said that the government has brought various programmes to become self-sufficient in paddy within three years.
"The government has set a target of producing 5.4 million tonnes of paddy in 2017-18 against the total 5.23 million tonnes of paddy produced in the current fiscal year," he said, addressing the interaction organised by Nepal Agriculture Journalists Academy on the occasion of 14th National Paddy Day tomorrow.
According to the Agricultural Development Ministry, the government has projected a growth of 3.25 per cent in the production of paddy in the next fiscal year.
Sapkota also said that the government has implemented different programmes in key districts to increase production of paddy. "We had launched different programmes in 20 districts in the fiscal year 2014-15," he said, adding that the government had also introduced different programmes for 15 Tarai districts in the fiscal year 2015-16. "The government will hand over these programmes to the local units from the new fiscal year."
The government has also started Prime Minister Agricultural Modernisation Project from last fiscal year to increase the productivity of the agriculture. Under the Prime Minister Agricultural Modernisation Project, the government has put self-sufficiency in paddy production in high priority. "The 10-year project is estimated to cost Rs 130 billion."
Likewise, the government is also planning to increase off-season paddy production in 50 districts to 300,000 hectares from existing 118,000 hectares.
The plantation area of paddy in the country is increasing slowly and the market is receiving improved seeds. Despite record high production, the country imported 359,000 tonnes of rice worth Rs 20 billion from countries including India, Italy, China, Thailand, South Korea and Japan in the first 10 months of the current fiscal year, according to the Trade and Export Promotion Centre (TEPC). "In fiscal year 2015-16, Nepal had imported 539,000 metric tonnes of rice worth Rs 22.80 billion."
Paddy plantation was done in 1.5 million hectares land – 50 per cent of cultivable land in the country – in the current fiscal year. "Nearly 70 per cent of paddy is produced in Tarai districts, and remaining 30 per cent in hilly districts," according to the ministry.
Also speaking, on the occasion, chief of International Rice Research Institute (IRRI) Bhaba Tripathi said that the institute was developing different paddy varieties that can cope with extreme heat and submergence. "There already are different varieties of paddy that give high yields," he said, adding that the farmers are but yet to get hold of these varieties.
Agriculture sector contribute around one third to the gross domestic production (GDP).

Comparative data
Year Production (in metric tonnes)
2013-14 5.04 million
2014-15 4.8 million
2015-16 4.3 million
2016-17 5.23 million
2017-18 5.4 million (Projected)

Government launches NTIS 2016 trimming exportable items' list

With an ambitious target to double the export of NTIS products to around 4 per cent of the gross domestic product (GDP) by 2020, the government has today launched the revised Nepal Trade Integration Strategy (NTIS), putting 12 sectors in priority.
It has trimmed the list of goods and services having high export potentials to 12 from 19 in the NTIS 2010 on the basis of comparative and competitive advantages.
According to the revised NTIS or NTIS-2016, the list now has nine products and three services. The new list has prioritised medicinal and aromatic plants, black cardamom, ginger and tea under agriculture produces, and leather products, footwear products, readymade garment, pashmina and hand-knotted carpet under industry category.
Likewise, remittance generating services, IT, BPO and IT Engineering, and tourism are the service products in the NTIS-2016.
Launching the NTIS-2016 today, commerce minister Romi Gaucahn Thakali said that the government was trying to reduce the cost of production of agriculture and industrial products.
However, traders and exporters have complained that the government initiative was simply insufficient to give a boost to exports. Chronic energy crisis and labuor problem are some of the constraints to export growth, they added.
The Ministry of Commerce had revised the NTIS-2010 as per the suggestions of the exporters after export of key products declined continuously despite getting high priority.
NTIS is one of the ambitious programmes that the government launched to promote products and services having high export potentials since last six years. However, export of most of the 19 NTIS products has been disappointing in recent years.
According to the Trade and Export Promotion Centre (TEPC), export of NTIS products increased by a mere 2.08 per cent to Rs 27.41 billion in the last fiscal year. Export of NTIS products is around two per cent of the GDP at present.
Meanwhile, the strategy has set immediate targets that need to be achieved by 2017 and medium-term targets by 2020.
It will also clarify which authority will look after specific products, the ministry officials said, adding that the revised NTIS envisions creating an enabling environment for trade by strengthening the supply capacity as well as institutional capacity development of trade-related institutions. "Capacity enhancement of trade-related institutions could be highly supportive in reducing cost of trade through initiation of various measures."
Commenting that the NTIS 2016 is ‘realistic’, National Planning Commission (NPC) member Dr Swarnim Wagle, on the occasion, said that the country’s export has been slowing due to supply-side incompetencies, deficiencies on the regulatory front, and less than optimum cooperation from the government since the beginning of the new century. Citing examples of some ‘high value to weight ratio’ products like Kobold watches, Sherpa Adventure gear, organic tea, software and creative apps and ophthalmic lenses developed by Tilganga Institute, he said that some Nepali products have been doning amazingly well in the international market by efficiently branding their products
Nepal as a young populous country should not skip manufacturing and rather focus on reviving the manufacturing sector, especially along the Tarai belt, Wagle said, highlighting the possibility of creating mass employment by linking up the Nepali industries with Indian production networks as well as regional and global value chain.
Stressing on the need of complementary reforms, he said that reform and industrial enterprise development, foreign direct investment, labour reforms, logistic industry development, our ambition in tourism all need to be taken simultaneously. "Horizontal reforms or high quality improvements in entire sectors at the same time could be almost impossible for a country like Nepal, which is when anchor investment could be the next best option and Nepal is also focusing on the second alternative, like the special economic zones, targeted investment approaches."
Enhanced Integrated Framework (EIF) – the aid for trade mechanism of World Trade Organisation (WTO) and various other development partners for productive capacity enhancement of least developed countries – has been providing support for NTIS implementation.

National sector export strategies and NTM survey on cards

Ministry of Commerce(MoC) and International Trade Centre (ITC), Geneva are working jointly to develop Sector Export Strategy(SES) of 4 products and conduct a large-scale survey on exporters’ experiences with Non-Tariff Measures (NTMs) in Nepal and destination markets. These products have been selected from the Trade Policy 2016 and Nepal Trade Integration Strategy NTIS 2016.
The ITC team accompanied with the focal point Mina Aryal from the ministry and the two navigators Dr Pradyumna Pandey from Ministry of Agriculture Development and Bimal Nepal from Trade and Export Promotion Centre (TEPC) presented the preliminary results of the sector consultations and NTM Business Survey today.
While chairing the programme, officiating secretary of the Ministry of Commerce Toya Narayan Gyawali said that development of Sector Export Strategy and survey on Non-Tariff Measures are in line the trade policy 2016 and these initiatives are instrumental to enhance Nepal trade capacity building and competitive strength which have positive impact in socio-economic prospects of Nepal.
To develop export strategy in a participatory way, 4 stakeholders consultations were already conducted as part of the first phase of the SES design process between June 20 and June 30 in different regions including Jhapa for large cardamom, Ilam for tea, Pokhara for coffee and Kathmandu for handmade paper and paper products. The stakeholder consultations in the districts were managed by the Trade Export Promotion Centre in close coordination with the Ministry of Agriculture Development. Some 120 representatives from various government agencies, private sector and development partners took part in the different consultations.
The consultation meetings presented the stakeholders with an overview of the strategy design process, analysis of the sector specifics, including production, international market dynamics, and markets requirements. It also initiated discussions on the major issues to be addressed as well as define core teams to work for the second phase of the strategy design process. The results of the in-depth participative diagnostic will serve to develop the national export strategies documents and to design detailed plan of actions for the next five years.
The consultation identified some key critical export constraints concerning supplies capacities and the business environment. They also discussed on market entry issues like non-tariff and para-tariff measures' barriers.
The discussions have helped build consensus around the opportunities and challenges of the private sector, as well as the public sector support services. "We have discussed at length our respective constraints to export large cardamom and identify new opportunities to develop our sector," said Nirmal Bhattarai from Large Cardamoms Entrepreneurs Association of Nepal during consultation in Birtamod. "We are looking forward the core team meeting to develop the plan of action with ITC assistance," he added.
Similarly, president of Nepal Handmade Paper Association Mohan Khrishna Manandhar, on the occasion, said the consultation had helped build momentum for concerted action. "The interactions between the various actors of the public and private sectors helped build agreement on common challenges and need for a national sector strategy to develop the handmade paper sector," he added.
The second initiative, the NTM Business Survey has interviewed over 350 Nepali exporters on the difficulties they face with regulatory and procedural obstacles to trade. Initial findings of the survey show that SPS/TBT requirements of destination markets and the related conformity assessment requirements like testing and certification are the main concerns of companies – especially those exporting agricultural products. Lack of adequate testing and certification facilities in Nepal has made exporting difficult for companies due to higher cost and additional time required for testing abroad, the participants noted. The NTM business survey will continue until August with a target of covering 600 companies. The survey results will feed into the SES development process.
The SES document will be a common principle document for public and private sector. Product specific market constraints related to export to India expressed during the consultations were been transmitted to the MoC to incorporate in the agenda of the recent bilateral meetings between Nepal and India at the secretary level," according to focal person and under-secretary at the Ministry of Commerce Mina Aryal.
The SES design process will produce a set of four endorsed, coherent and comprehensive documents that will serve as action-oriented blueprints for enhancing trade performance in each sector.
The ITC is the joint agency of the World Trade Organisation (WTO) and the United Nations (UN). The ITC assists small and medium-sized enterprises (SMEs) in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade (AfT) agenda and the Sustainable Development Goals (SDGs).

Investment Board to approve Rs 25 billion cement factory

Investment Board of Nepal is going to approve Rs 25 billion cement factory.
The board meeting after the Tihar festival is going to approve India's Reliance Industries' Rs 25 billion cement factory for foreign direct investment, informed external affairs head of the board Ghanashyam Ojha.
The board – chaired by the Prime Minister Sushil Koirala – has received the proposal from the Reliance Industries that is owned by India's Ambani group, he said, adding that the company is planning to set up the cement factory in either the central region or the eastern region of the country. "The Department of Mines and Geology has already given its permission to the factory in mid-July."
The approval got delayed due to the board's busy schedule with the project development agreement (PDA) on Upper Karnali Hydropower Project with another Indian firm GMR.
After the board's approval – post Tihar festival that ends on October 25 – Reliance will conduct environmental impact assessment (EIA). The company will then submit the EIA report to the board, through Ministry of Environment.
After the clearance of the EIA from the board, Reliance will start the work to set up the factory, Ojha added.
Reliance has, however, demanded that the government provide 60 MW of uninterrupted supply of electricity to the factory, he said, adding that the company has demanded that it should be provided subsidy in the import of coal or other fuel for generating electricity, in case the government is unable to provide uninterrupted supply of electricity.
More cement companies both domestic and foreign investment are coming up lately as the demand for cement has increased due to construction of big infrastructure projects including hydropower projects lately.
The government – to encourage the cement industries – promised to provide access road and electricity to new cement factories. According to Trade and Exports Promotion Center (TEPC), import of cement has gone down by 19.2 per cent to Rs 3.18 billion in the fiscal year 2013-14 compared to a fiscal year ago in 2012-13, when the country saw Rs 3.94 billion worth cement import. But the country has seen rise in import of clinker as most of the domestic cement factories are dependent on imported raw material for cement that is clinker. Only few of the cement factories rely on domestic mines and majority of them have been importing clinkers.
According to central bank, in the fiscal year 2013-14, the country imported Rs 9.71 billion worth cement and clinkers that is some three per cent higher than that of a fiscal year ago in 2012-13, when the country imported Rs 9.42 billion worth cement and clinkers.

Trade deficit widens to Rs 289.62 billion

Trade deficit ballooned to Rs 289.62 billion in the first half of current fiscal year 2013-14.

The country imported goods worth Rs 334.83 billion, whereas exported only Rs 45.21 billion, according to the Trade and Export Promotion Centre (TEPC) figures.

Though, the overall trade volume stood at Rs 380.04 billion – that is an increment of 14.2 per cent compared to the same period a year ago – the exports increased by 17 per cent and imports grew 13.8 per cent, the TEPC data revealed.

Due to the government’s failure in boosting exports, it could neither arrest the ballooning trade deficit not boost internal production and exports.

The country imported gold worth Rs 12.51 billion in first six months, whereas as usual the highest import bill stood of petroleum products at Rs 61.62 billion.

Iron and steels (Rs 29.5 billion) stood followed the petroleum products, whereas automobile and spare parts (Rs 20.28 billion) stood third largest imports.

Likewise, the exports of lentils, ginger and silver jewellery dropped as lentils export slumped from Rs 2.01 billion to Rs 964.72 million, the data revealed, adding that the woollen garment exports has, however, increased by a whopping 40.3 per cent to Rs 3.63 billion, whereas readymade garment exports swelled by 50.4 per cent to Rs 2.72 billion.

India as always is the largest trading partner of Nepal both in terms of exports and imports as the country exported goods worth Rs 29.51 billion to India and imported Rs 221.89 billion.

Apart from India, US, Germany, China, UK and Bangladesh are the major export destinations of Nepali products.

The TEPC data also revealed dismal situation of exports under Nepal Trade Integration Strategy (NTIS) as the country exported NTIS products worth Rs 14.20 billion against Rs 14.68 billion in the six months of last fiscal year.

President awards 35 commercially important persons

President Dr Ram Baran Yadav today awarded some 35 Commercially Important Persons (CIP) for their contribution to the economy.

The 35 people and institutions – under 15 category – have been selected on the basis of their performance by Trade and Export Promotion Centre (TEPC) under the Ministry of Commerce and Supplies.

The President handed over the CIP emblem and certificate to the representatives of firms and organisations selected under 15 different categories.

The CIP awradees will get special facilities like they can use VIP lounge at the airport, get SAARC business sticker visa, and have easy access to the national and international leaders.

The award that is given every two years, has this year recognised the largest third country exporter, largest exporter to India and China, largest overseas importer, industry with largest employment generation, and largest taxpayers in the last two years.

President Yadav, on the occasion, said that the country can develop economically only through joint efforts of the government and the private sector. Stressing the need for better understanding between the government and the private sector to translate policies and programmes, he asked to effectively promote the domestic products and exports.

Stable government, investment-friendly environment a must: German envoy

Stable government, investment-friendly environment and long-tem foreign investment policy are prerequisites to attract more foreign investment, according to a diplomat.

"Nepal still has no stable government, no skilled labour and industrial peace, apart from Constitution writing process that has not ended," said German ambassador to Nepal Frank Meyke talking to Confederation of Nepalese Industries (CNI) president Narendra Kumar Basnyat at his office.

The political parties have to seriously take these issues and join hands with the private sector to boost confidence of foreign investors, he said, adding that the private sector should take a lead and help create conducive environment for investment.

Seeking the envoy's help in spreading the message that Nepal is an investment destination Basnyat, on the occasion, informed Meyke that the country has improved investment-climate. "The private sector is also slowly gaining confidence," he added.

The private sectors of both the countries should reach out to each other and expand bilateral trade and economic relations, he said, adding that both the countries have age old socio-economic relation and that needs to be further expanded. "German investors should invest more in Nepal and help boost Nepal's export to Germany."

Nepal is suffering trade deficit of around half billion rupees with Germany, according to the Trade and Export Promotion Centre (TEPC) figures.

Nepal's export to Germany – the third largest export destination of Nepal – has decreased to Rs 2.76 billion in the fiscal year 2012-13 from a fiscal year ago's Rs 2.96 billion, the data revealed. "In the last fiscal year 2012-13, Nepal imported Rs 3.21 billion worth merchandise from Germany, whereas a fiscal year ago in 2011-12, Nepal's import stood at Rs 2.56 billion only."