With the fresh addition of items, the total number of Nepali products entitled to zero tariff entry facility in the world´s second largest economy has jumped to 7,787. Officials said this would boost Nepal´s export, enabling it to narrow down the ballooning trade deficit with the northern neighbor. [break]
Lal Mani Joshi, secretary at the Ministry of Commerce and Supplies (MoCS) and Chinese ambassador to Nepal Yang Houlan signed the pact on the Chinese offer, which is also applicable to other Least Developed Countries (LDCs) as well.
China has been providing zero-tariff facility to 4,721 Nepali products since July 2010 as a part of opening up its economy, but only a handful of items were of Nepal´s export interest. As a result, very limited number of Nepali products were being exported to the Asia´s largest economy given the weak supply capacity of Nepal.
For instance of the 4,721 items that enjoyed zero-duty facility, Nepal exported only 368 items to China in fiscal year 2011/12, according to government statistics. Nepali traders complained that frequent hassles created by the Chinese customs officials were largely deterring exports growth to China.
“But with the new agreement, which will come into effect from January 2013, we expect our export volume to China to really go up,” Naindra Prasad Upadhyaya, joint secretary at the MoCS told Republica.
Upadhyaya expressed such optimism because the duty-free list offered this time has added 366 items on which Nepal really enjoys export potential, such as noodles, fruits and vegetable items, food commodities, incense sticks, carpet, vegetable ghee and poultry, among others.
In his address after signing the pact, Secretary Joshi requested China to increase its investment in Nepal in the industrial sector so that Nepal could overcome its supply side constraints and more Nepali goods could be exported to China, taking benefits of the duty free facility.
“Such investment will ensure sound returns for China and also enable Nepal to narrow down its trade gap with the northern neighbor, which presently stands at Rs 51 billion,” said Joshi.
Chinese Ambassador Houlan said that the latest offer has enabled Nepal enjoy duty-free market access to China for around 95 percent its total tariff line - that is list of items it trades on.
“We hope this will play instrumental role in promoting Nepal´s export to the Chinese markets,” he said. The Chinese government has been slapping three to 35 percent custom duty on Nepali goods that are not included in the zero-tariff list.
Data of Trade and Export Promotion Center (TEPC) show that Nepal exported goods worth Rs 985.6 million to China and imported Rs 52.92 billion worth of goods from China in 2011/12.
Meanwhile, traders have hailed the fresh bilateral agreement on zero tariff facility.
Nepal-China Chamber of Commerce and Industry (NCCCI), issuing a press statement, expressed the hope that the pact will promote exports of Nepali goods and support to bring down the rising trade deficit of Nepal with China. The NCCCI has also stressed on the need to raise awareness among traders to take benefit from the Chinese offer.
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