Chapter I

 BACKGROUND

1.1INTRODUCTION

Nepal's foreign trade has always been observed at a deficit situation with an increase in demand every year for foreign goods for national development as well as for consumption and with a static trend in export growth. Export development and promotion should be considered as the most important measure to reduce the volume of trade deficit. His Majesty's Government of Nepal is committed to taking all such measures to support the private sector in its efforts to develop and promote export of various products from Nepal. The export promotion and development measures comprise:

1. policy and procedural measures to reduce the cost of production, increase competitiveness and expedite the flow of exportable products,

2. creation and maintenance of infrastructural and institutional facilities required for the development of export such as production centers, warehouses, transport and transit networks, insurance, information services, packaging units, etc. and

3. export promotion activities including product development and market promotion.

While the Government as a facilitator should take all policy and procedural measures to reduce the cost of export as indicated in a. above, the Government and the private sector have responsibility of creating and maintaining infrastructural facilities mentioned under point b. above, which are vital for the smooth flow of export. Moreover, the institutional role of Government Ministries, Departments and Agencies in supporting product development and market promotion are quite obvious in export promotion drive. The supports of the Ministry of Foreign Affairs, the Nepalese Diplomatic Missions abroad and the Trade Promotion Center in the promotion of external market and product development to suit the need of international markets should be of continued and sustainable nature.

The Ministry of Foreign Affairs with its long tradition and good experience in international matters is in need of a new dimension in the form of trade representation expertise to be effective and successful in export promotion in the present context of increased importance of global trade. No other agency seems competent enough to understand the market trend and situation and to develop contacts with the potential buyers and import promotion institutions than the Nepalese diplomatic Missions, which are quite close to the markets for Nepalese export products. Like the Missions of other countries the Nepalese Missions need to be pro-active in protecting and projecting national export interest through effective and purposeful activities. 

1.2 OBJECTIVE

In the above background this manual is designed to provide practical guide and assistance to the officials of Nepalese Diplomatic Missions abroad in achieving the following objectives:

• to create awareness and organize export promotion activities in the markets,

• to help the officials of the Royal Nepalese Embassies and other Nepalese Missions abroad in promoting export earning capability and foreign investments in export-oriented products of Nepal,

• to provide operational guidelines in trade related matters, and

• to strengthen the contacts and coordination between the Nepalese Mission abroad and the trade related agencies in Nepal as well as in foreign countries.

• Match making between potential importers and exporters of Nepalese products.

1.3 NEPAL'S TRADE SCENARIOS

1.3.1 External Trade Volume (in Billion Rupees)

1.3.2 Export Performance (in Billion Rupees)

1.3.3 Major Export Products 2001/02

• Woolen Carpet

• Ready-to-wear garment

• Hides and skins

• Handicrafts

• Silver jewellery

• Nepalese paper & product

• Cotton towel

• Pulses (Lentil)

• Vegetable ghee

• Jute goods

• Toothpaste

• Polyester Yarn

1.3.4 Export Destinations in Percentage

1.3.5 Import Performance in Billion Rupees

1.3.6 Major Import Products

• Machinery & Parts, Electrical Goods

• Textile

• Chemicals

• Fertilizers

• Raw Wool

• Transport Equipment

• Petroleum Products

• Medicine & Medical Equipment

• Telecommunication Equipment & Parts

• Computer & Parts

1.3.7 Import Sources in Percentage 2001/02

1.3.8 Trade Deficits in Billion Rupees

1.4 EXPORT PRODUCTS AVAILABILITY AND EXPORTERS

The main export products of Nepal are hand-knotted woolen carpets, cotton, woolen and rayon ready-to-wear garments, handicrafts, jewellery, hides, goat skin, leather products, pashmina, lentils, woolen products, Niger seeds, cotton and polyester fabrics. A complete list of potential export products of Nepal with Harmonized Commodity Description and Coding System (HS) is in Annex II. Description of major export products has been presented in Annex III and names and addresses of some of the leading exporters are listed in Annex IV.

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