In a bilateral agreement signed here on Friday, the Chinese side extended the facility to an additional 199 products, including cooking utensils, outfits, footwear, and tooth paste and brush, according to ministry officials.

Other products include those related to beauty parlours and toiletries, printing paper, buttons made up of animal bones, animal products, medicinal oil and products, pen, daily goods made up of birds’ feather and plastic products.

Ministry of Commerce and Supplies  (MoCS) Secretary Narayan Gopal Malego  and Chinese Ambassador to Nepal Wu Chuntai signed the letter of exchange.

“As Nepal already exports most of the goods added on the list, exporters can now benefit more from the duty free provision,” MoCS Spokesperson Deepak Subedi said.

In 2007, the Chinese government for the first time provided the facility to 4,721 goods from least developed countries, including Nepal. The list was later expanded to 7,787 goods in 2012.

Nepal, however, has not been able to take optimum benefit from the facility.

Nepali traders have long been complaining non-tariff barriers like strict provision of quarantine by Chinese authorities, lengthy producers and language problem have discouraged exports to China. They say the Chinese authorities oftentimes reject the certificates of origin issued by the Federation of Nepalese Chambers of Commerce and Industry.

“Due to communication gap between the Chinese central government and customs authorities there, exporters have to face a lot of hassles,” said Bikash Ratna Dhakhwa, former president of the Federation of Handicrafts Associations of Nepal. Dhakhwa stressed on the need for playing an active role by the Nepalese Consulate General in Lhasa and China for taking maximum benefit from the facility.

Nepal’s bilateral trade with China has been on the rise, but trade deficit is also rising. According to the Trade and Export Promotion Centre, Nepal’s exports to China increased to Rs 2.97 billion last year from a mere Rs 985.69 million in 2012-13. Over the period, imports rose to Rs 78.56 billion from Rs 52.92 billion.

In the first quarter this fiscal year, Nepal’s exports to China rose 93 percent to Rs 889 million, NRB said.