Handicraft entrepreneurs have complained that the new budget statement does not contain any measures to promote the handicraft industry even though it is a high revenue generating sector. They are upset that the government’s annual financial plan has not addressed their demands for hiking subsidies, identifying handicrafts as priority products, building training camps and developing technology. 

“The current 2 percent export subsidy is not enough to boost the sector and attract new entrepreneurs,” said Dharma Raj Shakya, president of the Federation of Handicraft Association of Nepal (Fhan), “There are more than 42 handicraft products, but only a few of them have been listed in the National Trade Integration Strategy.”

According to Shakya, the budget does not say anything about building training schools to produce skilled human resource so that production can be expanded to fulfil swelling demand.

“Moreover, the government has not addressed our demand to provide soft loans to set up small production plants,” said Shakya.

According to official data, the handicraft business is worth Rs20 billion annually, out of which exports account for Rs10 billion. Nepali handicrafts are shipped to 80 countries including the US, France, Germany and Japan.

Handicraft exports play a key role in balancing the country’s trade deficit and it is a major source of foreign exchange, Fhan said.

“The budget is likely to make imported goods dearer, leading to an increase in the total trade deficit. The only way to reduce losses is to promote exports,” said Fhan. “However, the budget is silent on increasing productivity, subsidizing exports and duty drawbacks.”    

Exports of handicraft products made of wood and metal swelled 4 percent while pashmina, paper products, silverware and jewellery saw growths of 4, 20.5, 15 and 79 percent respectively during the first nine months of the fiscal year. Meanwhile, the government has added a few of the many handicraft products to the list of high export potential products. 

Nepal earns a fair amount of revenue by exporting pashmina, wool, felt, silk, cotton, hemp, allo, dhaka, glass, bone and horn and crystal. Likewise, textiles, silver jewellery, metal craft, handmade paper, wood craft, ceramics, incense, paintings, beads, stone craft, bamboo products, gold ornaments, gems and herbal products are other high export potential products.

Handicraft traders also complained that the budget was silent on establishing a Saarc-standard handicraft development centre and providing equipment as promised by the Saarc Development Trust.

“Nepal lost many heritage structures during the earthquake. The reconstruction of these artistic buildings requires many labourers from the handicraft sector, and the budget has not addressed such concerns,” said Sangita Dhakal, assistant director of the association. “The government must bring polices and programmes to fulfil the sector’s growth target.”