Nepal's export potential hindered by Indian trade barriers

India, Nepal's largest export destination, accounts for nearly two-thirds of Nepal’s trade. However, according to experts and traders, tariff and non-tariff barriers imposed by India have restricted Nepal’s export potential.

India should provide tariff preferences on agriculture and primary goods on a reciprocal basis as per the bilateral trade treaty between two countries. “However, the imposition of non-tariff barriers (NTB) is high as far as Nepali products are concerned,” said Purushottam Ojha, former Commerce Secretary, presenting a paper at a workshop on “NTB in Saarc region: Issues and Challenges” organised by the Confederation of Nepalese Industries (CNI) in Kathmandu on Wednesday 30 March.

The need for quarantine and food safety tests is another factor impeding exports of agricultural products, including tea, ginger, cardamom and green vegetables. “Although there have been calls for cooperation in standard harmonisation, it is yet to be done,” said Ojha.

He said the bilateral trade agreement (Protocol-I.3) mentioned the Indian government will assist Nepal in increasing its capacity to trade through improvement of technical standards, quarantine and testing facilities and related capacity development. “Similarly, the Protocol II.6 talks about granting recognition to sanitary and phyto-sanitary certificates based on the capabilities of the laboratories,” he said.

Shishir Dhungana, director general at the Department of Customs, said issues related to accredited laboratories have been hitting both import and export. “Recently, the department itself took initiatives to set up laboratories at customs points to resolve these problems,” he said.

The participants also raised concerns about consumers being compelled to pay high prices for goods due the NTBs. They criticised the lack of commitment from Saarc countries to eliminate the NTBs.


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