In the long term, Nepal's export potential is linked to agriculture and cottage industries. Youth entrepreneurship, cooperative networks and technology-based processing mechanisms can play a major role in this.
What you should know
The figures for the fiscal year 2080/81 have given comfort to the Nepali economy, which has always been suffering from high trade deficit due to extremely low exports compared to imports. The reason is that the export has become a record. In this financial year, the highest export of 2 billion 77 billion 30 million has been done, which is 81.80 percent more than the previous financial year.
The data shows that we can also increase exports. However, this data is not something to be excited about. An analysis of what we are exporting and improving the data is indispensable. Which is not so encouraging. Because edible oil accounted for half of the total exports in the financial year 2081/82.
which is fundamentally not a product of Nepal. Importing from third countries and exporting to India after normal processing has seen an improvement in the data. Such data is not long-term, it does not give qualitative benefits to the economy of Nepal. Therefore, efforts should be made to realize the export potential of indigenous products.
In the financial year 2081/82, when goods worth 15 trillion 92 billion 98 crores were imported, only goods worth 2 trillion 77 billion 3 crores were exported. However, exports have almost doubled in FY 2081/82 over FY 2080/81. The main reason for this is the export of edible oil. In the financial year 2081/82, soybean, sunflower and palm oil were exported worth 1 trillion 21 billion 52 million.
In the same year, soybean, sunflower, and palm raw materials worth 1 trillion 44 billion 78 million were imported. Soybean oil is the most exported from Nepal. In the financial year 2081/82, 1 trillion 6.79 billion soybean oil was exported. In this financial year, 1 trillion 8 billion 95 million was imported. Third on the export list is sunflower oil. Sunflower oil worth 12.32 billion was exported, while import was worth 29.2 billion. In this way, it is seen that the import is more than the export has brought an abnormal increase in the export data.
In Nepal, 3.5 to 4 million tons of sunflower, mustard and soybean oil are consumed annually. While here only 380,000 tonnes (raw material) is produced annually, including soybeans, oilseeds (mustard, flax, sunflower). Inadequate raw material manufacturers meet domestic demand by importing and processing, mainly exporting to India. Traders have experience that when exporting imported raw materials, the cycle is completed in about one hundred days and the profit is also significant.
This cycle of import and export is better than doing nothing. But there is a risk of getting used to it while importing from third countries and exporting to India only by adding value here. Such a trend may not yield much benefit except to change the data. Rather, there is a risk of weakening Nepal's credibility in international trade partnerships. Mainly, if India makes policy changes that adversely affect us, our industries may collapse.
In the financial year 2081/82, as both imports and exports increased, the trade deficit also increased by 6 percent. The reason for this is obvious. Because, there has not been a massive increase in the production of any commodity in the country which can have a significant impact on export growth. Therefore, the government's policy should focus on increasing production in the country. Imports can be reduced if priority can be given to items that are more imported and have good production potential in Nepal.
On the other hand, priority should be given to the production of goods that are abundantly produced in us and are in demand elsewhere. About 82 percent of the goods exported from Nepal go to India alone, which accounts for 10 percent of the world market. But we have not been able to have a significant analysis of the Indian market. We have not yet taken the initiative to analyze aspects such as the nature of demand, culture of consumption, exports from other countries to India and create a production strategy. As a result, we have not been able to benefit from being a neighbor of a big market like India.
There is a lot of potential to increase the export of domestic products by increasing the import, processing and export of imported crude oil. If a country where 60 percent of the population is dependent on agriculture can give priority to agricultural products, both our experience and financial gains can be added. Even now, products like tea, coffee, cardamom, and ginger are still in demand from Europe to America. Herbs like yarchagumba are both in high demand and high in price. Nepal is already known for its
carpets. Handicrafts are also a good option. In recent years, exports of plywood, cement, shoes, iron products, ready-made clothes, jute cloth produced in Nepali factories have increased. The production and export of these and similar items can be expanded. But for this the government policies should be productive friendly. The
producer should also take care of aspects like quality products, consistency or improvement of quality, continuous availability, attractive packaging, branding. On the other hand, if it is possible to export processed products instead of exporting raw products of agricultural products or herbs, the local agricultural products will get encouragement, employment will also be created and more income will be generated.
Nepal's export potential in the long term is linked to agriculture and cottage industries. Youth entrepreneurship, cooperative networks and technology-based processing mechanisms can play a major role in this. If the government, the local level and the private sector work together to promote domestically produced and processed goods, Nepal can have a sustainable presence in the regional and international markets. Such products will also bring investment and employment and innovation opportunities to the economy.
