KATHMANDU, April 18: The government has enforced Trade Policy 2025, aiming to boost the competitiveness of domestic products through the development of trade-related infrastructure.
This move follows growing pressure from experts and stakeholders, who have urged the government to implement a robust foreign trade policy as Nepal prepares to graduate from the Least Developed Country (LDC) category in 2026. The new policy replaces the nine-year-old trade policy currently in place.
The implementation of the new trade policy comes at a time when the government has initiated the process to endorse a new bill on import and export, citing the limitations of the existing Export and Import (Control) Act 1957. The bill is currently under consideration in the House of Representatives.
Nepal’s foreign trade declines, trade deficit reaches over Rs 1...
Traders continue to face excessive costs, largely due to inadequate infrastructure and limited transit routes. The new trade policy, endorsed by the Ministry of Industry, Commerce and Supplies (MoICS), seeks to lower trading costs by addressing these underlying issues.
The policy outlines six key measures to boost Nepal’s foreign trade. These include increasing value addition of goods and services, improving quality standards, adopting innovative technologies to enhance production and productivity and strengthening bilateral and multilateral trade negotiations, among others.
According to MoICS officials, the policy envisions reducing both the time and costs associated with foreign trade. Priority has been given to the construction of collection centers for export items from the agriculture, forestry, and manufacturing sectors. Additionally, the government plans to facilitate the installation of infrastructure for grading, quality control, modernized laboratories and quarantine check systems.
Data from the Department of Customs show that Nepal’s trade deficit reached Rs 987.39 billion in the first eight months of the current Fiscal Year (FY) 2024/25, with imports totaling Rs 1.14 trillion compared to exports of just Rs 158.17 billion. In FY 2023/24, the country's total foreign trade stood at Rs 1.745 trillion, while the trade deficit was recorded at Rs 1.44 trillion.
The World Bank, in its 'Nepal Development Update,' reported that Nepal has an untapped export potential of around $9.20 billion. However, the country has struggled to capitalize on this potential due to various constraints.
High import costs of raw materials, infrastructure and geographic challenges, the low value of export items, limited trade relationships, and a lack of diversification are among the major hurdles Nepal faces in maximizing its foreign trade benefits.
Purushottam Ojha, former Commerce Secretary, told Republica that Nepal could harness its export potential by forging bilateral agreements with trading partners to ensure trade facilitation and investment-friendly measures. “To truly benefit from foreign trade, the government must show strong willpower to implement the policy provisions, rather than letting them languish on paper,” he added.
