Increase in export of customs exempted goods

Export of 77 indigenous goods exempted by the US has been increasing. Exports are rising due to the high demand for domestic products in the US market. According to the data from Trade Promotion and Export Center has shown that the export of goods exempted from customs duty has been increasing for the last three years. Although exports initially increased and then declined, it has been steadily rising for the past three years.

Nepal has been exporting luggage such as bags, suitcases, luggage products, floor covering products, blankets, products of various fibres and head coverings. According to the Trade Promotion and Export Center, the total export to the United States from July to June of the current fiscal year was Rs. 15.75 billion. In the fiscal year 2021/22, the total export to the United States was Rs. 13.79 billion, while the export of 77 items exempted from customs duty was Rs. 387.1 million.

The United States has provided duty-free access to 77 items to Nepal from 2015 to 2025. The United States had introduced a special trade preference law, stating it would help Nepal's economic recovery after the 2015 earthquake, and provided tariff exemptions on 77 items. Accordingly, 77 items are being exported with customs exemption.

Secretary of the Ministry of Industry, Commerce and Supplies Dr Ganesh Pandey said that the export of duty-free goods to the United States could be further increased if the production of indigenous goods could be increased. Secretary Pandey said that if the production could be increased by bringing new technology to increase exports, then the export of indigenous goods could be increased by using the facility of customs exemption given by other countries like the USA.

Former Secretary at the Ministry of Industry, Commerce and Supplies, Chandra Ghimire, said that the export could not increase as per the target due to the inability to modify the products and the inclusion of other items in the customs exemption. "Exports of some items that have been exempted from customs have increased and some have not. Earlier, customs duty was levied at 17 to 33 percent on the export of Nepali goods to the United States and the demand for felt products in the United States is high, exports can be increased by increasing production," Ghimire said.

He said that there was an agreement to increase the production of indigenous goods which could not be implemented. "If the country can produce large quantities of goods, exports to the US market can be increased. Weakness of institutional coordination among the agencies has prevented us from using even the facilities provided for export," said Sanju.