Nepal-Bangladesh Trade

Nepal losing opportunity to turn bilateral trade in its favor

Published On: August 11, 2016 01:10 AM NPT By: Raju Adhikari

JHAPA, Aug 11: Nepal is losing an opportunity to turn bilateral trade with Bangladesh in its favor with each passing year.

The country is failing to cash in on the comparative advantages in bilateral trade thanks to the government and the private sector's failure to translate their commitment to increase export to the South Asian neighbor. Nepal's list of exportable goods and commodities is squeezing over the past couple of years. Import from Bangladesh, however, is increasing, laying bare our weak export capacity.

"Nepal seemed to be content with exporting limited number of commodities to Bangladesh," Yadav Raj Shiwakoti, the chief of Kakarbhitta office of Nepal Transportation and Godown Management Company Ltd, told Republica. "We are facing deficit; we should not be complacent on the monetary gains that we are making. Our focus should be on increasing export good”," Shiwakoti adds.

Nepal started direct trade with Bangladesh through Kakadbhitta-Fulbari-Baglabandh route nearly two decades ago after it got transit facility to do trade with Bangladesh through India. Before that, Nepal was fully dependent on India for international trade.

Government data also show that Nepal has not been able to bring direct trade with Bangladesh in its favor. Data shows Nepal exported Rs 1.26 billion worth of goods to Bangladesh in 2015/16, while it imported Rs 3.51 billion worth of goods from its South Asian neighbor. Nepal exported only around seven products, including Dabur Nepal products, trade exhibition goods, medicinal herbs and lentil, to Bangladesh during the review year.

Juice, plastic products, poultry feeds and jutes are Nepal's major imports from Bangladesh. Data shows Bangladesh added at least five new products in list of exports to Nepal in the last fiscal year. In some year, Nepal has exported around 35 goods from Bangladesh. It's exports, however, is limited to around a dozen in nearly two decades of bilateral trade.

Trade experts say Bangladesh could be a good market for Nepali agro products. However, high custom tariff has been discouraging export of Nepali farm goods. "Green vegetables, ginger, orange and other fruits can be exported to Bangladesh. Some of these products have been exported in the past years. But high custom duty has made Nepali products dearer in Bangaldes”," says Gopal Basnet, chief of Mechi Chamber of Commerce and Industry.

Fruits, lentil, wheat, ginger, biscuits, noodles and electricity transformers used to be country's top exports to Bangladesh some years ago. However, export of many of these products has come to nil in recent years.

Due to high custom tariffs, Nepali products are losing competitive edge in Bangladesh flooded by Bhutanese products.

Many Bhutanese products enjoy preferential treatments in Bangladesh.

"The government has long been making commitment to take initiative for signing preferential trade agreements with Bangladesh. However, there has not been any progress in that directio”," says Shiwakoti“ "Our export size is getting squeezed with each passing year."

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