List of exports to India changing every year
KATHMANDU, July 20:
Nepal´s trade deficit with India is increasing with every passing year as the country has failed to develop sustainable export products.
In the first eleven months of the fiscal year 2013/14, Nepal exported goods and services worth Rs 81.82 billion. Exports to India accounted for 66.6 percent of the country´s total exports during the review period. Nepal exported goods and service amounting to Rs 54.5 billion in the 11-month period.
Iron and steel products, agro products, herbs and herbal products, pashmina, biscuits, plastic utensils and vegetable products have remained the country´s leading export products to India in recent years. However, Nepal´s export list keeps changing every year because of the lack of sustainable export products.
Medicinal herbs, ginger, vegetable ghee, rosin, plastic utensils, turmeric, wire and zinc sheet were the country´s top exports to India in 2012/13. However, mustard and linseed, sand and aggregates, vegetables, readymade garments (RMG), pulses and biscuits were the major items exported to India in 2013/14.
India provides duty free access to all Nepali products except alcohol, tobacco, perfumes, and arms and ammunition as per the Trade Treaty which is amended every five years.
According to experts, exporters look to reap benefit from tariff advantage will exporting goods to India instead of building a sustainable export base. For example export of biscuits to the southern neighbor jumped in 2013/14 when production of biscuits fell down heavily in India.
India provides excise duty exemption on biscuits with maximum retail price up to Rs 100 per kg.
Likewise, export of agro products depends on agro production in India, according to Jib Raj Koirala, joint secretary at the Ministry of Commerce and Supplies (MoCS). “We are promoting agro products with competitive edge like ginger, cardamom, lentils and other few products for selling them in international market,” he added.
There are always risks for entrepreneurs involved in production of manufacturing and agricultural products targeting the Indian market. For example, Nepal exported ginger worth Rs 1.18 billion in 2012/13. But ginger export fell heavily to Rs 405 million in the first 11 months of 2013/14.
Similar is the case with manufacturing goods. The export of GI pipes to India increased by 111.2 percent to Rs 3.33 billion in 2012/13. Export of GI pipes, however, fell in 2013/14.
Export of plastic utensils also fell by one-third in 2013/14 compared to 2012/13. In 2012/13, Nepal had exported plastic utensils worth Rs 909 million which fell to Rs 328 million in the first 11 months of 2013/14.
Between 1996 and 2002, vegetable ghee, zinc oxide and acrylic yarn were Nepal´s major export commodities to India. However, the list started changing after India increased tariff in 2002.
“Producers and exporters should change the mentality of reaping tariff advantage,” Hari Bhakta Sharma, senior vice president of Confederation of Nepalese Industries (CNI), told Rebublica. “India is well aware of this approach. That is why it had urged Nepali to develop sustainable products during the visit of former Indian Prime Minister I K Gujral in 1997,” Sharma said.
He also suggested to the producers and exporters to reap the benefit of duty free market access offered by India by producing quality products.
Source: Republica
