Lack of branding, quality certification facility affecting exports: Study

KATHMANDU, Jan 2:

Nepal is seeing slow export growth in the absence of strong branding exercise and internationally-accredited quality certification lab for exportable goods, an internal study conducted by the government showed.

The study commissioned by the Ministry of Commerce and Supplies (MoCS) shows it is becoming difficult to boost export of farm products like coffee, tea, honey and medicinal herbs in the lack of effective promotion and problems in securing international quality recognition.

“Our products have huge export potential. But our trade deficit is widening as we have been failing to remove hurdles existing in foreign trade,” Toya Narayan Gyawali, joint secretary of MoCS, said. “The study has identified some hurdles that need to be removed immediately to facilitate our foreign trade.”

Nepal has been suffering trade deficit of around Rs 1.5 billion a day in this fiscal year. Daly trade deficit stood at an average of Rs 1.45 billion in the last fiscal year.
According to the study, Nepal is failing to expand its market in foreign markets because of weak branding of exportable products.

Uday Raj Pandey, executive member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said Nepali entrepreneurs have been suffering problems in exports of farm produces as Nepal lacks internationally recognized quality certification labs.

“The government should take serious initiative to address this problem,” he added. Though Nepali readymade garments, carpets, Pashmina and other handicraft are already established in international market, entrepreneurs have felt the need of branding exercise due to increasing competition in foreign markets.

The trend of supplying carpets and Pashmina of inferior quality using ´Made in Nepal´ tag has increased over the past decade. Such counterfeit products have squeezed international market for Nepali products.

Realizing this fact, Nepali Pashmina entrepreneurs introduced ´Chyangra Pashmina´ - a collective trademark of Nepali Pashmina products - in collaboration with the government. Entrepreneurs said the introduction of collective trademark has started to show positive impacts as the export of Nepali Pashmina products is increasing.

“The improvement in export of Pashmina products has encouraged us. We have initiated branding exercise for black cardamom and tea as well,” added Gyawali.
The study also found that lack of modernization in Nepali factories is the other reason behind decline in export of industrial goods.

Some handcraft producers have failed to modernize their industries to produce the goods in line with the international market phenomenon. Though Nepali products are comparatively expensive than products of other countries, entrepreneurs still lack promotional strength in overseas markets.

The study also suggested that Nepali entrepreneurs need to focus on increasing value addition of exportable products so that they can enjoy better profit margin on exports.
Pandey also said price of Nepali products can be made competitive in international market by reducing cost of production by adopting modern technology and bringing down shipping cost by developing alternative transit routes.

Nepal has been relying on ill-equipped Kolkata port as a sole shipping point for overseas trade.

Source: Republica