KATHMANDU: Nepal's export growth in high-value commodities has been weak in the first ten months of the current fiscal year, increasing concerns for the country aiming to exit the "least developed" category by 2026. According to data from the Trade and Export Promotion Center, there was a marginal 5.64 percent increase in the export of high-value products during this period, a figure that experts find insufficient for the country's developmental aspirations. This slow growth trend highlights the government's apparent lack of emphasis on bolstering production and expanding exports.
Export earnings from goods categorized under the Nepal Integration Strategy (NTIS) 2023 amounted to Rs89.82 billion, constituting a significant portion of Nepal's total exports valued at Rs126.17 billion during the review period. However, the performance of goods listed under NTIS was underwhelming, indicating a failure to develop robust value chains for these products. According to trade expert Purushottam Ojha, effective execution of plans is essential, emphasizing the need to address challenges in production enhancement, quality assurance, and marketing of Nepali products.
Nepal's reliance on agriculture is evident in the NTIS list, with most goods falling under this category. Ojha underscores the importance of establishing a comprehensive value chain from production to consumer access, suggesting a need for focused efforts to bolster competitiveness and quality standards. Despite the implementation of export cash incentives since 2010-11, their effectiveness has been questioned, prompting calls for a review of these incentive schemes to address inefficiencies and promote genuine export growth.
With Nepal's looming graduation from the category of Least Developed Countries (LDCs) by 2026, there is increased urgency to enhance production capacity and competitiveness in anticipation of potential trade challenges. The possibility of losing preferential access to the European market under the Everything But Arms (EBA) initiative post-graduation underscores the need for strategic planning and diversification of export products. Transitioning to alternative schemes like the Generalized Scheme of Preferences (GSP+) requires compliance with international conventions, presenting additional hurdles.
The detailed breakdown of export performance highlights both positive and negative trends across various product categories. While some sectors, such as iron and steel products, experienced notable growth, others witnessed declines, indicating the need for targeted interventions and sector-specific strategies. Amidst these challenges, effective monitoring mechanisms and periodic reviews are essential to identify and address impediments to export growth, ensuring sustained progress towards economic development and global competitiveness.
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