The government has asked China to provide duty-free access for 512 Nepali products as the existing facility has not benefitted Nepali exporters much.

China provides duty-free, quota-free market access for 8,030 Nepali goods. They include cooking utensils, outfits, footwear, tooth paste and brush, beauty products and toiletry, printing paper, buttons made of animal bone, animal products, medicinal oil and products, pen, daily goods made of feather and plastic products, among others.

China provides this duty-free privilege to other least developed countries too.

According to the Ministry of Industry, Commerce and Supplies, the government submitted the new proposal as Nepali exporters have not received significant benefits from the provision implemented by China.

“As China has been offering duty-free access to these products according to the eight-digit Harmonised System (HS) code, we have asked the northern neighbour to allow access to new products lists under the six-digit HS code,” said ministry spokesperson Rabi Shankar Sainju.

As per the ministry, the eight-digit HS code is applied mainly to specific products. “If China provides duty-free access as per the six-digit HS code, it will apply to a wide range of products including pashmina products, woolen carpet and handicraft that are currently not included in the list,” Sainju said.

Pashmina, woolen carpet and handicrafts accounted for 15 percent of the country’s total export earnings of Rs73.12 billion last year. According to Sainju, the proposed products under the six-digit HS code make up almost 90 percent of the tariff lines.

Nepal’s exports to China reached an all-time high of Rs2.98 billion in 2013-14. In the following years, performance slipped before exhibiting a slight recovery this year.

In the first 10 months of the current fiscal year, Nepal’s exports to the northern neighbour almost doubled to Rs2.66 billion, as per Nepal Rastra Bank statistics.

Over the period, wheat flour, tea, noodles, pashmina, woolen carpets and handicraft items accounted for a large share of the shipments to China. 

During Prime Minister KP Oli’s recent visit to China too, Nepal made a request to the Chinese government to grant an enhanced level of market access for 512 tradable products. In 2007, China provided duty-free access for 4,721 goods from the least developed countries including Nepal. The list was expanded to 7,787 goods in 2012, and then to 8,030 in 2014.