Large cardamom traders and experts have urged the government to negotiate with Pakistan and Bangladesh to reduce “heavy taxes” on exporting one of the world’s most expensive spices. Nepal needs to diversify its products beyond India, they say.

In the context of Nepal graduating from the least developed countries by 2026, they say it was high time that Nepal negotiated with the countries where it could get high prices for its products.

Traders say that earnings from the large cardamom could double or triple if the spice reaches these Muslim-majority countries directly.

India is the biggest buyer of Nepal’s large cardamom, absorbing 99 percent of its exports. The spice is re-exported to Pakistan and the Middle East, where it fetches high prices because of local preference for Nepali products.

Pakistan is the largest importer of large cardamom, purchasing roughly 60 percent of India’s exports. Pakistanis use large cardamom pods in biryani, a famous fried rice dish, to symbolise prosperity and wealth.

Nepali traders have also been trying to export large quantities of cardamom to Bangladesh directly through the Kakarbhitta-Panitanki-Phulbari route as demand has increased.

The 44-km route provides the shortest access to the Bangladeshi border point of Banglabandha for Nepal’s trade with and through Bangladesh.

Nepali large cardamom or black cardamom has a distinct flavour profile due to a specific method of postharvest drying in bhattis (ovens), which explains the roasted smell and taste.

The smoky flavour would overwhelm a sweet cake or pudding, but in a spice rub for roasted meat or a full-flavoured stew, it imparts a smouldering depth no other spice can, according to experts.

Pakistan and Bangladesh are member countries of the South Asian Free Trade Area (SAFTA), under which there is a provision for zero duty on agricultural goods.

However, these countries impose tariffs and para-tariffs, including regulatory and supplementary duties that make exports expensive.

“As a result, tariff goes as high as 60 percent on large cardamom,” said Paras Kharel, executive director of the South Asia Watch on Trade, Economics and Environment, the Kathmandu-based trade think tank.

Indra Chand Bindal, senior vice president of the Large Cardamom Entrepreneurs Association of Nepal, said Pakistan imposes a 42 percent duty and Bangladesh 35 percent, among other charges, discouraging Nepali large cardamom from being exported to these neighbours.

“Pakistani traders ask to send the product by under-invoicing it, but we cannot do it as it is against our trade.”

On Monday, at a panel discussion during the “National Conference on Large Cardamom: Present Status, Opportunities and Challenges” in Kathmandu, Bindal said that Bangladesh’s demand for large cardamom has been increasing.

“But Bangladesh imposes 5-7 different duties resulting in a total of 89 percent tariff. That’s massive for any trade to thrive.”

According to the association, large Nepali cardamom is exported to Bangladesh via Bhutan due to zero tariff schemes for Bhutan.

The association said about 45 percent of large cardamom goes to Pakistan via Dubai through India. “Besides high duty, under-value LC (under invoice) and collective trademark are the key problems.”

Nepal is the world’s biggest producer of large cardamom, with a 68 percent share of the global market, but traders said it has yet to fully realise its export potential.

The traders said that transit is another major problem hindering significant cardamom export.

Exporting large cardamom to Pakistan through India is difficult.

Bindal said large cardamom takes 45-60 days to reach Pakistan via the Kolkata Port. “If we are provided with Mumbai port, our product will reach in 10 days.”

Large cardamom traders said the government needs to forward the issues and negotiate a reduction in duty charges through diplomatic channels to ease the export process.

During the discussion, the traders said that if the production and quality of large cardamom are increased, Nepal's export potential would easily reach Rs15 billion in the upcoming years.

Large cardamom is cultivated predominantly in four districts of eastern Nepal—Taplejung, Panchthar, Ilam, and Sankhuwasabha—which account for 87.04 percent of national production. Around 125,000 households are engaged in growing it.

In fiscal 2021-22, Koshi province harvested 13,904 hectares and produced 7,645 tonnes of large cardamom.

Rabindra Duwadi, information officer of the Trade and Export Promotion Center, said many of the targets set in Nepal Trade Integrated Strategies, 2016, and Nepal National Sector Export Strategy for Large Cardamom 2017-2021 have yet to be achieved.

Duwadi said that large cardamom contributed 5.2 percent of the total export share last fiscal year.

Duwadi said that Gulf countries are a huge potential market for Nepali large cardamom, but there is no export in those countries at all. “The traders are not willing to take risks by exporting to those countries as the Indian market is assured for them.”

Exporting large quantities of cardamom to European Union countries and the US market is not easy, as they have stricter rules regarding the import of food products.

The traders said that the production of large cardamom has been declining in recent years however, trade value is increasing due to rising prices.

According to the association, the price of ‘jumbo jet large cardamom’ was Rs90,000 per 40 kg on Monday. The price of jumbo jet large cardamom was Rs65,000 on December 1 last year.

In the past 10 years, the export of large cardamom has increased by 126.99 percent.

Nepal exported large cardamom worth Rs3.63 billion in the fiscal year 2012-13, which increased to Rs8.24 billion in the fiscal year 2022-23. Large cardamom produced in Nepal is entirely organic and provides income to mostly low-income families in rural Nepal.