Export of Nepal’s high value goods drops in Q1 on India’s restrictions

Nepal: Exports of Nepal’s high-value products have fallen for the first time in many years, largely due to the restrictions imposed by India. Nepali manufacturers predict more trouble ahead amid souring relations between the two countries.

 

photo: RSS

According to the Trade and Export Promotion Centre, export earnings from the goods identified by the Nepal Trade Integration Strategy (NTIS) 2023 totaled Rs24.19 billion in the first quarter of the current fiscal year, down 6.74 percent relative to the same period last fiscal year.

 

Nepal’s southern neighbour has set a new requirement for Nepali products to be eligible to enter its territory.

 

Nepali exporters say they haven’t been issued the Bureau of Indian Standard (BIS) certificate for a long time from India, putting their business into a state of uncertainty as New Delhi wants to control goods made from Chinese products to enter their country, multiple industrialists the Post talked to said.

 

The last time export of the NTIS products dropped was in 2020-21, due to the Covid pandemic.

 

According to the NTIS data, the export of iron and steel fell by 27.1 percent to Rs3.36 billion during the review period. Iron and steel commands the highest share of the export at 8.76 percent.

 

“Our sheet products worth Rs700 million that were ready for export to India have been stranded in the warehouse for two months with India not renewing the BIS certificate,” said Sunil Manot, chief finance officer of Hulas Steel Industries. “We submitted required documents timely, four months ago. It has been two months since our BIS certificate expired.”

 

Manot said that the company targeted to export 20 percent of the total Hulas Steel sheets production to India. “The export is completely halted now. If this trend continues, we have to stop production and lay off workers.”

 

Hulas Steel Industries, located in Simara, Birgunj has 1,000 people employed directly and indirectly. The company exported sheets worth Rs2 billion in the last fiscal year.

 

“Our target is to export around Rs5 billion this fiscal year. We have imported raw materials worth over Rs2 billion but things are looking difficult,” said Manot.

 

The company said it has reduced the production capacity by 15–20 percent after exports halted.

 

“We recently started exporting sheets to Indian markets and we were gradually setting the business up as our products were doing well specially in Kanpur, Assam, Guwahati and Siliguri, among other places in India,” said Manot.

 

Other zinc sheets are being exported but once their BIS certificate expires, export will grind to a halt if India continues to deny the standard certification, steel manufacturers said.

 

As the major market of NTIS listed products is India, the BIS certificate issue is going to have a negative impact on Nepal’s overall export if the Nepal government does not intervene in the matter as soon as possible, exporters said.

 

The export of footwear, cement, sanitary pads and diapers has already been stopped for the past 3–4 months with India not issuing BIS certificates to Nepali manufacturers despite completing the due process to get the one.

 

Besides industrial products, shipment of cardamom fell by 33.2 percent to Rs1.26 billion in the first three months of the current fiscal year compared to the same period last fiscal year.

 

Large cardamom prices have reached near-record levels, crossing Rs2,500 per kg and traders expect that the export will rise in the second quarter due to the rise in value.

 

Large cardamom traders said that as production has dropped in the major producing countries, demand has grown exuberantly in the global market pushing the price up.

 

Shipment of woollen carpet declined by 2.8 percent to Rs2.85 billion in the first three months of the current fiscal year. Nepal exported 98,654 square metres of carpet in the first three months compared to 111,985 square metres in the same period last fiscal year. Carpet export contributed 7.44 percent to the total export share.

 

The export of readymade garments declined by 8.2 percent to Rs2.80 billion during the period.

 

Shipment of jute products declined by 4.1 percent to Rs1.76 billion in the first three months of the current fiscal year.

 

The export of fabrics decreased by 4.6 percent to Rs631.94 million during the review period.

 

Shipment of Nepali paper declined by 1.1 percent to Rs362.05 million in the first three months of the current fiscal year compared to the same period last fiscal year.

 

Export of medicinal herbs decreased by 56.6 percent to Rs307.25 million during the review period.

 

Shipment of ginger fell by 40.8 percent to Rs235.36 million in the first three months of the current fiscal year compared to the same period last fiscal year.

 

Nepal’s lentils export decreased by 55.3 percent to Rs100.51 million during the review period.

 

Shipment of vegetables fell by 32.8 percent to Rs111.35 million during the review period.

 

Spice export from Nepal decreased by 79.7 percent to Rs25.21 million in the first three months of the current fiscal year compared to the same period last fiscal year.

 

Nepal’s export of listed goods including yarn, tea, felt products, pashmina, dog chew, footwear, cement, rosin and resin, gold and silver jewellery, coffee, pasta and honey increased in the first three months of the current fiscal year compared to the same period last fiscal year.

 

Yarn export increased by 1.3 percent to Rs3.26 billion during the review period.

 

Shipment of tea jumped by 44.3 percent to Rs1.86 billion in the first three months of current fiscal year.

 

Felt export increased by 3.5 percent to Rs1.67 billion during the review period.

 

Shipment of pashmina went up by 10.5 percent to Rs889.43 million in the first three months of the current fiscal year.

 

Nepal’s dog chew export inclined by 3.3 percent to Rs786.23 million during the review period.

 

Footwear exports jumped by 97.8 percent to Rs474.33 million in the first three months of current fiscal year.

 

Shipment of cement increased by 1.7 percent to Rs390.52 million during the review period.

 

As India has recently restricted cement and footwear imports from Nepal, manufacturers say that the repercussions of the restriction will be visible in the upcoming export data.

 

Rosin and resin exports from Nepal surged by 45.2 percent to Rs357.72 million in the first three months of the current fiscal year.

 

Shipment of silver and gold jewellery increased by 9.6 percent and 4.5 percent to Rs52.89 million and Rs9.12 million, respectively, during the review period.

 

Nepal’s coffee export jumped by 110.3 percent to Rs26.83 million in the first three months of the current fiscal year.

 

Pasta shipment increased by 119.3 percent to Rs462.34 million in the review period.

 

Nepal’s honey export jumped by 895.7 percent to Rs8.37 million in the first three months of the current fiscal year.