Nepal's export of high-value products grew at a snail's pace in the first ten months of the current fiscal year.

According to the statistics from the Trade and Export Promotion Center, the export of high-value goods increased by 5.64 percent in the review period, which experts say is not a good sign for a country preparing to graduate from the “least developed” status by 2026.

They said that the government is least bothered about enhancing production and increasing exports.

As per the statistics, export earnings from goods identified by the Nepal Integration Strategy (NTIS) 2023 totalled Rs89.82 billion in the review period.

Nepal’s total exports amounted to Rs126.17 billion in the review period.

The performances of former NTIS-listed goods were not good, demonstrating that Nepal failed to develop the products’ value chain. “Making plans does not work if they are not properly executed,” said Purushottam Ojha, former commerce secretary and trade expert.

“There are problems in increasing and enhancing production, assuring quality and marketing Nepali products.”

Most of the goods on the NTIS list are agricultural products.

According to Ojha, there is a need to create a value chain—from farm to consumer.

The cash incentive in export, which was started in 2010-11, has not been able to give positive results. Experts say it is high time the export incentive provision was reviewed. “There are many products which are not originally produced in Nepal, but traders have been benefiting from export cash incentives,” said Ojha.

Nepal is graduating from the LDCs by 2026, and it should enhance its production and competitive capacity by improving the quality of potential goods.

After LDC graduation, Nepal may lose a huge European market as it might not get facilities under the Everything But Arms (EBA) initiative. This scheme grants full duty-free and quota-free access to the European Union Single Market for all products (except arms and ammunition).

"We might need to go for a generalised scheme of preference plus (GSP+) but it is not easy to get as some criteria like ratifying convention of ILO, which the country has yet to do, and the rules of origin criteria are also not easy,” said Ojha.

EBA is a special arrangement for LDCs made by the United Nations. It allows duty-free and quota-free access for all products (around 7,200) originating in LDCs, except for arms and ammunition.

GSP is a special incentive arrangement for sustainable development and good governance. GSP+ slashes these same tariffs to zero percent for vulnerable low- and lower-middle-income countries that implement 27 international conventions related to labour and human rights, environmental and climate protection, and good governance.

“So, it is important to focus on the development of competitive and comparative advantage goods, their value addition, and quality assurance. This will help in recovering the export to some extent,” Ojha said.

There are around 184 activities for the implementation of the NTIS and provision requiring monitoring and evaluation. But the monitoring mechanism does not seem to have done its work, a trade expert said. There should be a dedicated review after a certain time gap, which helps focus on problematic issues.

During the review period, the exports of iron and steel products, readymade garments, dog or cat food, fabrics, medicinal herbs, cement, ginger, footwear, and lentils increased.

The export of iron and steel products jumped by 58.4 percent to Rs14.06 billion in the first ten months of the current fiscal year until mid-May. The export of iron and steel contributed 11.15 percent to the total export share.

The export of readymade garments increased by 13.9 percent to Rs7.39 billion in the review period, contributing 5.86 percent to the export share.

The export of medicinal herbs increased by 32.3 percent to Rs1.81 billion in the review period.

Cement exports increased by 562.4 percent to Rs1.66 billion in the first ten months.

Ginger exports declined by 19.1 percent to Rs1.07 billion during the review period, while footwear exports increased by 16.7 percent to Rs1.04 billion. Fabric exports increased by 1.7 percent to Rs2.05 billion.

Lentil exports increased by 15.2 percent to Rs387.12 million.

Meanwhile, the export of yarns, woollen carpets, cardamom, jute and jute products, woollen and pashmina shawls, rosin and resin, handmade paper, fragrance oil, gold and silver jewellery, pasta, textiles, coffee, tea, mate, and spices has declined.

The export of yarns declined by 2.8 percent to Rs9.65 billion in the period, while woollen shipments fell by 6 percent to Rs8.79 billion.

Cardamom shipment declined by 5 percent to Rs6.91 billion, while jute and jute products increased by 7.1 percent to Rs5.99 billion.

The export of woollen felt products decreased by 5.9 percent to Rs3.84 billion, while pashmina decreased by 5.3 percent to Rs2.36 billion.

The shipment of textiles fell by 3.2 percent to RS5.88 billion and declined by 5.3 percent to Rs11.41 billion during the review period.