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Nepals Export Potential

International Trade Center(ITC),

GenevaResearcher: Andreas Lendle

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Nepals

Examined 18 products and services

Great Export Potential:

Large cardamom Lentil

Tea

Instant Noodles Medicinal herbs and oil

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Nepals

Tourism and Labor: Services found to

show much promise

Labor: Largest export worth US $ 2.4 billionand will remain in future too.

Tourism: US $ 352 million in 2008.

Lentil: US $ 22 million followed bypashmina products and large cardamom

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Nepals

Potential was determined on the basis of:

Existing level of export

Size of the world market and conditions of

market access (tariff structure)

Domestic supply condition.

Medium-level export potential (Other

sectors)

Ginger, honey, silver jewellery, pashmina products,

wool products, information technology and business

process outsourcing(BPO) services and engineering

services

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Low Potential

Handmade paper, health services and

educational services

Examined 18 sectors: 12 goods and 06

service sector

Comparative Advantage

9 products in terms of tariffs being imposed on

Nepal against its top five competitors

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Advantages in (Tariffs)

Ginger, honey, tea, Instant Noodle,

Medicinal herbs, silver Jewellery,Transformer, Pashmina and Wool products

in terms of tariffs.

Disadvantage Against Other CompetitorsHandmade paper, Lentil

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Nepals

Suggestions

Reduce high dependency on India for

export of:

Cardamom, ginger, Lentil and Tea.

Brand these products including Noodles

Offshore Business

Significant potential but hardly utilized

Some sectors needed government support despite

their low potentials as they can have a significant

impact on poverty reduction

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Socio-Economic Impact

1. Instant Noodle

2. Handmade Paper3. Medicinal Herbs and wool products and

4. Services like tourism and labor

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Business Environment: Nepal

Environment Scaring Away Investors Security Law and Order

Load Shedding Credit Difficulties and continuous poorperformance environment in the World BankRanking

No Loan, high interest rate(14-15%) notfeasible

Labor problem

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BE: Nepal

World Bank(2010). Logistic Performance

Index(LPI)

Nepal: One of the top poorest performers in

the world in terms of:

Logistical support while exporting and

importing goods

Worse than other South Asian Countries

Stands at 147th position out of 155 countries rated

Somalia: Worst Performer

Germany: Best Performer

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BE: Nepal

Reasons

Freight cost due to landlocked nature

No easy access to sea port like Switzerland

No railway

No fast track road

Existing road infrastructure is also poor and

frequently obstructed Syndicate system and increase in transportation

cost

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BE: Nepal

World Bank: Doing Business 2010

Nepals Position 123 from 121 in 2009

Deteriorating Areas:

Starting business Dealing with construction permits Paying taxes Level of Labor Rigidity

Getting Credit Trading Across boarder Protection of investors

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BE: Nepal

Nepals position is the worst in South Asia

regarding labor rigidity, one step ahead of

Afghanistan in trading across boarder Remained same in the areas of enforcing

contracts and closing business

Did better in Ease of registering propertyin which Nepal performed the best inSouth Asia

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BE: NEPAL

CONCLUSION

One after another report about theworsening situation in Nepal to do

business scares away the potential

investors from within the countryand outside.