Nepal’s Export Potential
International Trade Center(ITC),
Geneva
Researcher: Andreas Lendle
1
Nepal’s
Examined 18 products and services
Great Export Potential:
• Large cardamom
• Lentil
• Tea
• Instant Noodles
• Medicinal herbs and oil
2
Nepal’s
Tourism and Labor: Services found to
show much promise
Labor: Largest export worth US $ 2.4 billion
and will remain in future too.
Tourism: US $ 352 million in 2008.
Lentil: US $ 22 million followed by
pashmina products and large cardamom
3
Nepal’s
Potential was determined on the basis of:
• Existing level of export
• Size of the world market and conditions of
• market access (tariff structure)
• Domestic supply condition.
Medium-level export potential (Other
sectors)
Ginger, honey, silver jewellery, pashmina products,
wool products, information technology and business
process outsourcing(BPO) services and engineering
services
4
Nepal’s
Low Potential
Handmade paper, health services and
educational services
Examined 18 sectors: 12 goods and 06
service sector
Comparative Advantage
9 products in terms of tariffs being imposed on
Nepal against its top five competitors
5
Nepal’s
Advantages in (Tariffs)
Ginger, honey, tea, Instant Noodle,
Medicinal herbs, silver Jewellery,
Transformer, Pashmina and Wool products
in terms of tariffs.
Disadvantage Against Other Competitors
Handmade paper, Lentil
6
Nepal’s
Suggestions
Reduce high dependency on India for
export of:
• Cardamom, ginger, Lentil and Tea.
• Brand these products including Noodles
Offshore Business
• Significant potential but hardly utilized
• Some sectors needed government support despite
their low potentials as they can have a significant
impact on poverty reduction
7
Nepal’s
Socio-Economic Impact
1. Instant Noodle
2. Handmade Paper
3. Medicinal Herbs and wool products and
4. Services like tourism and labor
8
Business Environment: Nepal
Environment Scaring Away Investors
• Security
• Law and Order
• Load Shedding
• Credit Difficulties and continuous poor
performance environment in the World Bank
Ranking
• No Loan, high interest rate(14-15%) not
feasible
• Labor problem
9
BE: Nepal
World Bank(2010). Logistic Performance
Index(LPI)
• Nepal: One of the top poorest performers in
the world in terms of:
• Logistical support while exporting and
importing goods
• Worse than other South Asian Countries
• Stands at 147th position out of 155 countries rated
• Somalia: Worst Performer
• Germany: Best Performer
10
BE: Nepal
Reasons
• Freight cost due to landlocked nature
• No easy access to sea port like Switzerland
• No railway
• No fast track road
• Existing road infrastructure is also poor and
frequently obstructed
• Syndicate system and increase in transportation
cost
11
BE: Nepal
World Bank: Doing Business 2010
Nepal’s Position 123 from 121 in 2009
Deteriorating Areas:
• Starting business
• Dealing with construction permits
• Paying taxes
• Level of Labor Rigidity
• Getting Credit
• Trading Across boarder
• Protection of investors
12
BE: Nepal
• Nepal’s position is the worst in South Asia
regarding labor rigidity, one step ahead of
Afghanistan in trading across boarder
• Remained same in the areas of enforcing
contracts and closing business
• Did better in Ease of registering property
in which Nepal performed the best in
South Asia
13
BE: NEPAL
CONCLUSION
‘One after another report about the
worsening situation in Nepal to do
business scares away the potential
investors from within the country
and outside.’
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