The government is mulling over making it mandatory for exporters, who receive cash incentives, to sell at least 20 percent of their products in the domestic market. The Commerce Ministry said on Thursday that the move was intended to expand the market for local products within the country.

Currently, the government provides 2 percent of the export value as incentive to companies that export goods with a domestic value addition of 30 percent or more. The grant is directed chiefly at export products.

Speaking at the 25th annual general meeting of the Garment Association of Nepal (GAN), Commerce Minister Meen Bahadur Bishwakarma said the government planned to endorse the policy this year in a bid to encourage exporters sell 20 percent of their high quality products in the domestic market.

“As most exporters sell only damaged or rejected products in the domestic market, they are not gaining a good market at the local level,” said Bishwakarma, adding that the step could help promote high quality products in the domestic market. The Commerce Ministry’s announcement coincides with the Finance Ministry’s move to raise the export cash incentive to 4 percent from 2 percent.

Exporters have long been demanding that the government increase the incentive claiming that the scheme hardly helped to make their products competitive in the international market.

GAN President Chandi Prasad Aryal blamed government apathy for the sharp fall in the export of Nepali readymade garments. “Due to lack of incentives, Nepali products are around 15 percent more expensive in the global market compared to products manufactured in leading export countries such as Bangladesh and Cambodia,” Aryal said.

According to the Trade and Export Promotion Centre, export earnings from readymade garments amounted to Rs5 billion last year. Receipts from readymade garments have dropped almost 10 percent in the past one and a half decades, Aryal said. “If the government extends its support, we can expand the export base threefold within three years.”

Dharma Raj Shakya, president of the Federation of Handicraft Associations of Nepal, said the government should focus on providing incentives to export goods.

“Helping exporters to sell 20 percent of their output in the domestic market will not provide them much relief. Instead, the government should hike the export cash incentive to bring down the trade deficit that has been rising every year,” Shakya said. According to Commerce Minister Bishwakarma, the ministry has recently allocated Rs18 million to train manpower engaged in making export products. “We have aimed to prepare 1,000 skilled workers this year,” said Bishwakarma. He urged the private sector to utilise the skilled manpower in their production business.

CIP honours to be revived

KATHMANDU: The Commerce Ministry on Thursday said the government would revive the Commercially Important Person (CIP) honours this year. The CIP scheme was launched in 2014 when 34 business organizations and individuals were feted for their contribution to the country in different categories of trade and commerce. In 2016, the government had chosen 38 CIPs to be honoured, but the plan was abandoned following controversy over the selection of the potential awardees. Commerce Minister Meen Bahadur Bishwakarma said they planned to honour CIPs in October. (PR)