Export-oriented industries in Nepal will get tax refund facilities on the purchase of raw materials, according to the amended Trade Policy 2015 unveiled on Wednesday. 

The government will provide additional benefits if the exporters use locally produced raw materials. The move is aimed at boosting exports and promoting local products to reduce the ballooning trade deficit that has been hurting the economy. Nepal’s trade deficit rose to Rs 689.36 billion in the last fiscal year, from Rs 622.37 billion in 2013-14.

The new policy that came into effect from Wednesday said that such facilities will be provided on both imported and domestically purchased raw materials. Last time the government had amended the policy was in 2009. 

The government would also refund the value added tax and excise duty imposed on the outsourced goods produced domestically if the goods are meant to purchase for exports, the policy said. The Cabinet had last week approved the amended trade policy.

Minister for Commerce and Supply Sunil Bahadur Thapa said that the government has amended the trade policy to address the ballooning trade deficit. 

“The policy that has included almost all the major issues of the present days will be helpful for domestic market to integrate with changing global trade,” he said. 

Thapa said that the policy has also targeted to meet Nepal’s target of graduating to developing countries by 2022. He also urged Nepali exporters to focus on a particular country to export particular products. “One-product-one-country initiative could help boost Nepal’s export than doing business of multiple goods in many countries,” he said.