Exports dip 8pc on fall in shipments to India

- POST REPORT, Kathmandu
Exports dip 8pc on fall in shipments to India

Apr 16, 2015-

Exports have shrunk 8 percent during the first eight months of the current fiscal year largely due to a fall in shipments to India, the Trade and Export Promotion Centre (TEPC) said in a report.

Overall exports to India dropped 9.6 percent to Rs36.55 billion with a decline in the export of a majority of export goods. The southern neighbour absorbs two-thirds of Nepal’s exports, and a decline in this market is quickly reflected in the country’s entire export performance. Meanwhile, imports from India rose 3.2 percent to Rs319 billion further bloating the trade deficit.

Nepal sends agro products and a number of manufactured goods to India. Tea, cardamom, ginger, jute sacks and related products, juices, medicinal herbs, vegetable fats and oil and toothpastes are the major exports. However, the export of almost all these products dropped during the review period.

The biggest fall was seen in the export earnings of vegetable fats and oil. According to the TEPC, income amounted to Rs25.29 million compared to Rs174.84 million during the corresponding period in the previous year.

Cardamom witnessed a fall of 37 percent, the second sharpest drop after vegetable fats and oil. Exports of the product slid to Rs2.10 billion from Rs3.34 billion. Similarly, export earnings from ginger plunged 23.9 percent while jute bags and sacks were down 13.4 percent, medicinal herbs 2.9 percent and cotton sacks and bags 7.8 percent.

Along with farm products, exports of manufactured goods like toothpaste and juices also dropped 15.9 and 6.5 percent respectively. Trade expert Bijendra Man Shakya said the fall in the export of agricultural products could be due to a slump in domestic production besides a rise in output in India. “Ginger and cardamom farmers in South India may have boosted shipments to the Indian market and affected Nepal’s exports,” he said. Shakya also blamed lack of government policy to promote exports to India for the situation. “The government should also focus on exports to India instead of only concentrating on third countries.” The export cash incentive announced by the government is not applicable to shipments to India. Meanwhile, exports of major products to third countries also took a pounding during the review period. Shipments of iron and steel products, woollen carpets, readymade garments, pashmina shawls and lentils, all major export earners, were down. This pulled down the overall export earnings of the country.

Shakya stressed the need for joint efforts of the government and the private sector to increase publicity of local products. “In addition, traders should concentrate on maintaining standards like eco-labelling which minimises health hazards to users of the products in order to increase exports to third countries.” During the review period, Nepal exported goods worth Rs56.92 billion while imports stood at Rs504.98 billion, resulting in a trade deficit of Rs448.06 billion.

Published: 17-04-2015 09:41

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