KATHMANDU, August 5: The Department of Industry (DoI) has asked the government to provide cash incentives worth Rs 1.28 billion in total to 508 export-oriented industries.
According to a DoI official, the aforementioned amount is proposed based on the goods that these industries exported in the last fiscal year. As per the working guideline on cash incentives on exports, Nepal Rastra Bank will provide the amount based on the recommendation of the department.
The government gives a cash incentive equivalent to 3-5 percent of the export value of the products identified as high export potential items listed in the Nepal Trade Integration Strategy (NTIS). Traders get a five percent cash incentive for exporting processed tea, large cardamom, ginger, leather goods and processed herbs and oil products with a value addition of at least 50 percent.
Similarly, a three percent cash incentive is provided for exporting pashmina products under the Chyangra Pashmina brand, textiles, woollen carpets, and yarns made of polyester, viscose, acrylic and cotton.
The government started providing cash incentives of 1-2 percent of export values to different industries from the fiscal year 2011-12 with the intention of increasing exports. Earlier, such incentives were limited to third country exports. From June 2019, the government started providing incentives for 27 products exported to India.
In 2020/21, Nepal exported goods worth Rs 141.12 billion. Of the total export volume, the country exported edible oil worth Rs 55.95 billion, the largest of all. Tea and coffee stood at the second and third places, observing exports worth Rs 11.76 billion in total. The list is followed by textile, woolen carpets and readymade garments.