The new Commerce Policy, the third in the series among industrial and commerce policies being amended this year, has laid high priority on trade facilitation, infrastructure development, linking small industries to the markets and economic diplomacy, said a senior Ministry of Commerce and Supplies (MoCS) official.
“Raising investments and manufacturing capacity and mainstreaming trade in the country’s development agenda form the two major objectives of the Policy,” stated the official, who elaborated that the Ministry has recently finalized a draft of the Policy by incorporating all the inputs of the private sector. It is being forwarded to the Finance Ministry soon for finalization.
Going by the conceptual framework agreed so far, the new policy will allow the private sector to have its commercial presence in the overseas markets. It has envisaged various institutional mechanisms to gear up economic diplomacy, and provide software and hardware support to the manufacturers and service providers to link up their products and services with the markets.
Trade capacity enhancement measures
To enhance production capacity, the MoCS has expedited establishment of multiple export processing zones and special economic zones. “In such zones, industries that export up to 85 percent of their products to international markets will be lured by special duty exemptions, tax holidays and other incentives,” says the draft.
Likewise, the government will encourage small and medium enterprises to set up collection centers and export clearance house with special incentives in order to facilitate them and link up to the international market. Also local taxes and service charges imposed on SMEs will be revoked, according to the draft policy.
The policy has categorized country’s major exportable commodities like hand-knotted woolen carpet, readymade garments and handicraft as major trade creating items and proposed special facility for their organized development.
Establishment of garment processing zone, carpet villages and handicraft villages with special incentives are high priority. It has also proposed lifting floor-price on carpet trade, one of the major demands of carpet exporters.
Likewise, it has identified highly potential commodities such as tea, coffee, large cardamom, herbs and other agro-commodities as “thrust areas” and proposed special government support for their expansion, market exploration, marketing and exports.
Infrastructure and trade facilitation
The draft lays strong emphasis on raising public investment for developing infrastructure that link products with the markets. Customs harmonization, reforms in customs procedures and development of integrated customs terminals has been mooted in the draft.
“While most of these undertakings need to be pursued as per our commitments in the World Trade Organization, we have also pushed for special trade facilitation measures with a vision to develop the country as a trade-transit country for Sino-Indian trade,” said the source.
In this connection, MoCS has planned to develop various north-south highways and audit roads for facilitating trade, request India and China to extend their railway services to the bordering points and construct special customs terminals and parking yards.
Market access and institutional measures
It has also pushed for joining various bilateral and regional free trade agreements to open up new markets for Nepali exports, and sought aggressive use of economic diplomacy to create trade-enabling environment on the external front.
For the purpose, the draft policy says the government will set up commerce desk in major trade generating countries and use it for creating trade opportunities.
It has also provisioned constitution of a high-level body headed by the Minister for Commerce to review commerce and other trade related policies as and when needed. It has also envisaged creation of an independent think-tank, comprising experts and private sector representatives, to undertake trade related researches and make policy recommendations to the government.
“The conceptual framework of the new Policy will remain as it has been drafted. As for other facility and incentives, it will be finalized once the Ministry of Finance gives its inputs,” stated the source.
Related story
Stakeholders call for tiered VAT and tax reform as govt drafts...
