Nepal’s Export Competitiveness: The Fastest Means of Trade Integration

Updated: Aug 13

Trade deficit is a bigger problem in Nepal. Huge import from the country has been digging the gap between export and import. This has narrowed the volume of foreign exchange reserves. Because of this, fiscal deficit has not been sustainable. As Nepal has a greater scope of export, it has potential of products in the local, regional and international trade. But export, and export capacity is very less and have limit. The big issue in the country Nepal is we do export less only we do import more. Even if export led economy is best than demand led growth in the economy. India and China are exporting more. But in the regional context, South Asia’s export performance is low. Apparently, what a surprising that South Asian region and the country Nepal sustaining their growth from domestic demand and slow economic growth rate.

The main thing is that the capacity building and its utilization to boost export in the country. However, the country has limited change in structural development. Nepal has prioritized its competitive product as a major exportable item. But it has lacking to the use of technology, incentives, and the access of market. Nepal has faced hindrances of export trade. Nepal has sustained its growth by service sector growth. Despite that Nepal can produce agricultural goods for short term. The problem regarding to this is pertaining to the quarantine which has not been solve for longtime. Policy makers of government sector and private sector are realizing that is also a bigger threat for exports.

Agriculture sector could be an opportunity to generate export volume more in short term and long term. But it depends upon thought and attitude of reform in export trade. A long with this, exchange rate is another problem to correct but it could be possible only when productivity within the country and integration to the diverse open market. Only remittances have sustained national economy. In order to rise competitiveness, low level structural development is a kind of limitations. When competitiveness is increased, export performance of the south Asian region might be increased.

Nepal is in the transformation process. It has stable government and its focus is to call local and foreign investors. Effort of business startup has been growing which will rise competitive and comparative advantage to their service and product. Knowing this thing, Nepal should harness exportable items adopting competitive measures mounting from the regional integration and global trade integration. Therefore, Nepal should not take any time to increase pace export trade. All of the organ of government, private organizations, Universities and Colleges and every individual should make agenda of production and export trade promotion. And they should incubate to initiate small, medium and large-scale startup which can boost the independent and competitive export which could be the best policy of import substitution.

This time is digital so Nepal should use its scope from local business to international integration. Mare, hiking a higher tariff in import is not a solution to promote export. Nepal and South Asia region integrate export promotion policy to reduce import and cut off trend of demand. But rather it should divert towards demand for domestic goods and services. For this, one cannot grow export. All should have to make positive thought, attitude and ideas for export promotion that does have trade penetration to have bond in terms of integration extensively.

Hence, inter link between trade and industry policy should have continue to get competitive capacity of all sectors. The best idea should have to be built the export led economy. Every individual should have trade law, quality goods & export literacy which enables them to resist external competitive pressure for the sustainability and integration. Thus, an opportunity of export is a fundamental element to reduce unemployment, accelerate economic growth and strengthen economic integration.


Authors: Rudra Pd Ghimire & Mihail Kitanovski

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