With the existing trade law outdated, a new bill on import and export has been registered in the House of Representatives.

“The Export and Import (Control) Act, 1957, had limited provisions. The new bill has been prepared to make it more relevant and address key issues in international trade,” said Ramila Bhandari, under-secretary at the Ministry of Industry, Commerce, and Supplies.

“There are gaps in Nepal’s international trade due to outdated laws, and the proposed bill aims to make it more inclusive and integrated with trade and customs-related issues.”

Bhandari said the bill has provisions similar to those in the Customs Act, such as issuing EXIM codes. The existing Export and Import (Control) Act contains only eight articles and is limited in scope.

At the same time, the new bill introduces provisions for trade fairs and exhibitions, intra-port trade, export incentives, export houses, certificates of origin, and an export promotion fund, among others.

A key provision in the bill mandates obtaining an EXIM number for exporting goods, which was not required under the previous law.

The bill has been prepared by amending and integrating the Export and Import (Control) Act 1957 and the Customs Act 2007 to enhance transparency and efficiency in foreign trade. It aims to facilitate the export and import of goods and services more effectively.

The Cabinet approved the draft bill on December 13.

Once enacted, the law will streamline trade procedures, introduce modern trade concepts, ensure a clear separation of regulatory bodies, and enhance national economic growth through commerce.

The proposed bill, titled the Export and Import (Regulation) Act, 2025, includes measures to regulate the massive import of goods that negatively impact domestic industries and curb illegal trade practices.

The key provisions of the bill are as follows:

Goods partially or wholly manufactured, processed, or designed in Nepal using imported raw materials can be exported.

The Customs Department will approve imports and exports based on recommendations from relevant organisations for participation in domestic and international trade fairs.

Goods imported from one country can be re-exported to another after modifications, provided they remain in designated customs areas or dry ports within a specified period.

Intra-port trade will be conducted in line with Nepal's trade agreements with exporting countries.

The bill includes provisions to encourage exports by offering special facilities or subsidies for goods and services produced using domestic labour, skills, and raw materials.

Establishing export houses for purchasing, processing, and packaging locally produced goods will be facilitated.

Agencies under the industry ministry or legally established organisations will issue certificates of origin for Nepal-produced goods.

An Export Promotion Fund will be established to provide necessary financial support for export growth.

The new law aims to facilitate foreign investment and trade.

Foreign companies seeking to open a contact office in Nepal to export Nepali goods can apply through customs offices.

Applications will be reviewed to ensure they contribute positively to Nepal's trade sector before approval.

A Trade Facilitation and Consultation Unit will be established and coordinated by the secretary of the industry ministry, which will include representatives from the finance, agriculture, and law ministries, as well as the Nepal Rastra Bank and the Customs and Inland Revenue Departments.

This unit will exchange trade-related information with international agencies, oversee transparency in trade regulations, and facilitate trade inspections.

Government agencies and individuals must provide requested trade documents and details when the unit requires them.

According to the bill, exporting or importing goods without an EXIM code or engaging in banned or restricted trade activities will result in penalties. A fine of Rs500,000 if the violation is up to Rs20 million.

A fine equal to a half of the violation amount if it exceeds Rs20 million.

A fine of double the violation amount and up to three years of imprisonment if the violation exceeds Rs50 million.

Special recognition and facilitation will be provided to individuals making significant contributions to Nepal's commerce sector.

Trade experts have raised concerns that the bill, despite its timely introduction, lacks provisions on sustainable trade and the use of technology.

“Many countries impose mandatory standards on imported goods to align with environmental and consumer health regulations. However, Nepal’s proposed bill does not include such standards, which could turn the country into a dumping ground,” said Rajan Sharma, a trade and logistics expert.

Sharma, also general secretary at the Nepal-India Chamber of Commerce and Industry, noted that the bill primarily focuses on revenue generation and customs regulations rather than consumer protection, health, and safety standards.

“Without strict market inspections, substandard and even expired goods could enter Nepal through relabeling,” he added.

The absence of import and export quality standards raises concerns about Nepal’s compliance with international trade requirements.

“Nepal has struggled to implement product standards due to its heavy reliance on imports, minimal consumer complaints, and weak enforcement of consumer protection laws,” Sharma said.

He further highlighted environmental concerns, pointing to the increasing import of electric vehicles (EVs) and the lack of policies for battery waste management. “The bill does not address sustainability in economic, social, and environmental terms,” he said.

Additionally, trade experts have expressed concerns that the bill may not support Nepal’s graduation from the Least Developed Country (LDC) status.

Sharma criticised the government for failing to consult deeply with the private sector and stakeholders before drafting the bill.

According to the Department of Customs, Nepal’s exports declined by 3.03 percent to Rs152.38 billion in the last fiscal year compared to 2022-23.

Imports also declined by 1.16 percent to Rs1.59 trillion, resulting in an overall foreign trade decline of 1.33 percent—to Rs1.74 trillion.

In total trade, imports accounted for 91.27 percent, while exports contributed only 8.73 percent.

The new bill aims to address these trade imbalances and enhance Nepal’s competitiveness in the international market.

However, experts stress the need for further refinement to ensure the bill effectively promotes sustainable and inclusive trade policies.