KATHMANDU , April 8: After a yearlong exercise, the Ministry of Commerce and Supplies Tuesday unveiled a new commerce policy aimed at giving impetus to export trade and reduce the widening trade deficit. But the policy failed to win the hearts of manufacturers and traders, who said the policy failed to address two crucial issues -- labor and duty concessions. They were of the view that the very goals of the policy would not be achieved without addressing the issues. [break]
Nepal’s export-oriented industries have been mired for long due to labor problems. Exporters operating with varying orders at different seasons of the year lamented that the rigid labor law was adding up to their cost of production.
The private sector has been demanding a special provision in labor law for ‘hire-and-fire’ policy for export-oriented industries. They have also been demanding an ‘income tax holiday’ for five years.
“Had the government addressed these two issues, it would have instantly boosted our morale and confidence, and helped to give impetus to overseas trade,” said Uday Raj Pandey, Vice President of Garment Association of Nepal (GAN).
Pandey, one of the influential garment exporters, who is in the business for 25 years, but has currently shut down his industry, said he would have restarted his factory and resumed productions within two months had the policy addressed those issues.
“There are many others like me who are awaiting some motivating steps from the government. Unfortunately, the policy has disappointed us,” said he.
The new policy has included new programs like establishment of Commerce Desk in Nepali missions abroad to explore markets. It has also promised to support industrial development by constructing infrastructure demanded by the investors, and pledged no duty apart from export duty on exports.
“If effectively implemented, these provisions can help gain find markets and increase production capacity,” said Commerce Secretary Purushottam Ojha.
However, the private sector seriously doubts implementation of the programs. Reason: All these programs need money. “Given the resource constraints and government apathy in the past, there is no ground to believe that these programs will come into implementation,” said Pandey.
Entrepreneurs also raised doubts over the implementation of programs like establishment of Special Economic Zone (SEZ) and Export Processing Zones included in the policy, as the government has not been able to enact the SEZ law despite for five years.
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