Trade Promotion Programme in Nepal

Project description

Title: Trade Promotion Programme in Nepal
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: Ministry of Commerce (MoC)
Country: Nepal
Overall term: 2013 to 2017

Context

Following the completion of a five-year implementation process of the Nepal Trade Integration Strategy (NTIS) 2010, in cooperation with development partners and the private sector the Nepalese Ministry of Commerce (MoC) has developed a revised NTIS 2016 that provides the Government of Nepal with a roadmap for the development of the export sector and for trade-driven, inclusive growth.

To address the challenges facing the export sector, the new strategy prioritises certain goods and services with export potential and promotes their contribution to Nepalese economy. It does this by creating a conducive environment for trade and developing the value chains of these products. The strategy is part of the Enhanced Integrated Framework (EIF), an aid-for-trade initiative backed by several donors.

Objective

The implementation of the Nepal Trade Integration Strategy connects the country to regional and international markets. Conditions have improved for the trade in goods and services, bringing important benefits for Nepalese enterprises.

Approach

The purpose of the NTIS is to improve the political, legal and regulatory framework for companies, while increasing their access to trade facilitation services. This should increase their international competitiveness and trade performance.

The GIZ programme addresses the needs of small and medium-sized companies which have the potential to export goods and services, and to create employment. It continues its earlier support for the development of value chains for three products previously prioritised in the NTIS 2010 – honey, medicinal and aromatic plants, and silver jewellery – and has added two further products prioritised in the NTIS 2016: footwear and ginger.

The programme assists project implementation activities by the Nepalese Ministry of Commerce, as well as 21 World Trade Organziation focal points in other ministries and departments involved in implementing the NTIS. Other partners that receive support include the Nepal Chamber of Commerce, the Federation of Nepalese Chambers of Commerce and Industry, the Confederation of Nepalese Industries, the Trade and Export Promotion Centre, and sector associations engaged in the five targeted value chains.

Results

In its earlier phase, from 2013 to 2015, the programme contributed to the enhanced export potential of selected priority products as listed in the NTIS 2010. These were honey, silver jewellery and medicinal and aromatic plants. In 2015, 81 per cent of the companies supported by the programme reported increased international demand for their products, compared to just 49 per cent in 2013.

Meanwhile, seven significant issues were identified that impede the trade in silver jewellery and honey sector. Following a structured public-private dialogue, MoC has accepted an action plan to address these issues. Furthermore, the Government of Nepal has amended two policies affecting the trade in medicinal and aromatic plants, therby enhancing the business climate and export potential for entrepreneurs in this field.