Lacklustre performance of NTIS products

KATHMANDU, JUL 28 -
Products identified by the Nepal Trade Integration Strategy (NTIS)-2010 as having comparative advantage were supposed to lead the country’s exports, but their performance has been dismal.

Of the 13 NTIS-identified products, seven saw their exports fall in the first 11 months of the fiscal year. The seven items are woollen products, silver jewellery, honey, handmade paper, pashmina products, essential oils and noodles.

The remaining — lentils, cardamom, tea, ginger, medicinal herbs and iron and steel products — saw exports rise.

Collectively, exports of these 13 items rose 9 percent to Rs 24.12 billion in the review period. These products accounted for 34.8 percent of the country’s total exports of the country. Nepal exported goods worth Rs 69.3 billion during the period.

With the trade deficit ballooning to Rs 480.33 billion, contribution of these goods is too low to reduce the deficit.

Trade expert Posh Raj Pandey called for a review of the items listed under the NTIS. “The decline in the exports of a majority of the items demands a revision of the programme,” he said.

Anup Bahadur Malla, chairman of Export Promotion Centre (EPC) at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), blamed government’s indifference towards export promotion and failure to adopt export-friendly policies for sluggish exports.

With the export sector’s performance remaining pathetic, the government has kept the exports target unchanged for the proposed 13th periodic plan. The government has targeted to increase the country’s exports to Rs 100 billion by the end of the plan period. The 12th plan also had the same target.

Although the government has been launching programmes to promote essential oils and pashmina in the international market, export of these items declined significantly. As per the report, exports of essential oils declined 14 percent to Rs 62.6 million, while pashmina exports came down by 6.8 percent to Rs 1.73 billion during the period.

Exports of natural honey dropped by a staggering 99.7 percent to Rs 5,000, from last year’s Rs 1.8 million. Jib Raj Koirala, joint secretary at the Ministry of Commerce and Supplies said the lack of an international-standard laboratory to certify products has been the major reason for the severe downfall in the export of honey.

Exporters said honey previously used to be one of the most preferred items by food-manufacturers, pharmaceuticals and cosmetic producers in the international market.

Exports of noodles declined 7.2 percent to Rs 520 million, while handmade papers slumped 11.3 percent to Rs 467 million.

Exports of silver jewellery, pashmina and wool products declined by 39.3 percent (Rs 130 million), 6.8 percent (Rs 1.73 million) and 16 percent (Rs 361 million), respectively.

Among the good whose exports rose, ginger witnessed the highest rise of 208 percent to Rs 1.18 billion, followed by tea Rs 1.76 billion. Iron and steel exports rose to Rs 10.72 billion.

Koirala, however, said with the government’s recent policy to offer ownership of NTIS products to the concerned ministries would help improve the situation. The government has doubled the budget for the promotion of NTIS products.

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