Nepal’s handicraft export earnings rose 13 percent in the last fiscal year driven by higher demand for felt products, metal craft, cotton goods, glass products and woollen goods in the international market.

Nepal exported handicraft products worth Rs5.4 billion in the fiscal year 2016-17, which ended on July 15, shows the latest report of the Federation of Handicraft Association of Nepal (FHAN). In 2015-16, Nepal’s handicraft export earnings stood at Rs4.8 billion. 

Nepali handicraft products are exported all over the world, especially to the United States, Europe and other countries in the Asia-Pacific. Of all the goods exported, felt products made the biggest contribution to handicraft export earnings in 2016-17.

Nepal exported felt products worth Rs1.5 billion in 2016-17, up 38 percent than in 2015-16. With this, felt products made a contribution of 27.5 percent to total handicraft export earnings in 2016-17.

“Felt products are high in demand as they are rapidly gaining popularity as gift items in Europe and the US,” FHAN President Dharma Raj Shakya said.

Another handicraft product that made biggest contribution to export earning was metal craft. Nepal exported metal crafts worth Rs1.4 billion in 2016-17, up 10 percent than in 2015-16. The product made a contribution of 25 percent to total handicraft export earnings in 2016-17. 

Metal crafts are more in demand in countries like Bhutan, Vietnam and China, where Buddhism is practiced. 

Another major contributor to handicraft export earnings in 2016-17 was woollen goods. Exports of these items grew 6 percent to Rs460.6 million in the year, making a contribution of 8.5 percent to total handicraft export earnings.

The biggest increment in export revenue, however, was recorded by glass products. Exports of glass products surged 169 percent to Rs319.7 million in 2016-17. The hike was powered by exports of hookah jars, according to Shakya. “They look exotic and are liked by many in the international market,” Shakya added. But exports of paper and pashmina products dropped 8 percent and 26 percent, respectively to Rs429 million and Rs217 million in 2016-17. “Paper products, for instance, are exported by countries like India and China. But they use modern technology to produce them while Nepal still uses traditional methods. Our products, thus, cannot compete with Indian and Chinese goods in the international market,” said Shakya. “This is the same with pashmina products.”

Shakya, however, said Nepali handicraft products could gain an edge in the international market if the government raises cash incentive on exports.

The government is currently offering cash incentive equivalent to 2 percent of the value of exported goods with domestic value addition of at least 30 percent. It is currently mulling over raising the incentive to 4 percent. 

“We think the incentive should be raised to 10 percent. This will improve handicraft exports,” Shakya said.