Once Nepal's most glamorous export and high-fashion product besides being a major foreign exchange earner, pashmina is slipping down the charts because manufacturers have not been able to keep in sync with market trends.

Pashmina exports dropped 9 percent to Rs168 million in the last fiscal year that ended mid-July, continuing a downward spiral that began a few years ago despite being listed in the Nepal Trade Integration Strategy. Shipments of the fine wool product plunged 26 percent to Rs216.99 million in 2016-17 and 15 percent to Rs185.1 million in 2017-18.

Pashmina traders say the industry is battling for survival as Nepali producers lack new designs and technologies. The most crucial issue is that Nepali manufacturers are increasingly using imported raw materials and branding them as Chyangra Pashmina. Traditional pashmina is made of the wool of the mountain goat known as Chyangra in Nepal.

According to a report entitled Pashmina Enhancement and Trade Support Project prepared by the International Trade Centre, Nepal's pashmina faces a reputational risk because almost all manufacturers use imported pashmina yarns from overseas having no traceability to Nepal's Chyangra wool production areas.

The report said Nepal needed to do rigorous market research to diversify markets, create new designs and enhance the capacity of enterprises in raw material sourcing.

Exports of pashmina and woollen products have been declining each passing year as manufacturers are not able to update their products with new design, said Dharma Raj Shakya, past president of the Federation of Handicraft Associations of Nepal.

According to Prachanda Shakya, senior vice-president of the association, there is huge demand for Chyangra pashmina in the global market, but Chyangra populations have been declining which has affected production. Another issue is that Nepali pashmina is not able to compete with lower-priced products from India and China.

Pashmina exporter Swayambhu Ratna Tuladhar said the cost of production of Nepali pashmina was significantly higher compared to neighbouring countries. "This is largely due to the higher cost of labour and raw materials."

Tuladhar, who has been in the business for 40 years, said that he had not obtained any cash incentive from the government due to bureaucratic hassles. This fiscal year, the government hiked the cash incentive for exports to 5 percent from 3 percent based on domestic value addition. Export incentives are provided for pashmina, woollen products and felt products.

Pashmina manufacturers and traders say paperwork hassles prevent them from getting the cash incentive.

Krishna Prasad Pandey, owner of Pashmina in Nepal, said exports had fallen in recent years due to the decreasing quality of pashmina. "Some traders import readymade mixed pashmina from China and re-export it which has created a negative impression of Nepali pashmina in the global market," he said. "Exporters have failed to attract buyers also because of lack of new designs."

Pandey, who has a pashmina factory in Lubhu, Lalitpur, said he manufactures 4,000 pieces of pashmina products monthly and exports most of them to Europe, Australia and the US.

Many pashmina manufacturers are small scale operators, and they are not able to promote their products and brands in the international market, said Puran Chhetri, owner of Shawl Store in Kathmandu. "A lot of money is needed to brand products and market them."