Cash incentive eludes pashmina

HIMALAYAN NEWS SERVICE

KATHMANDU: Despite repeated simplification of cash incentive procedure, pashmina exporters still find it difficult to get benefit from the government’s export promotion plan. “We were confident that the facility would bring some relief to pashmina industry but with complications in the procedures, we have not yet benefited,” said president of Nepal Pashmina Industries Association

Pushpa Man Shrestha. Department of Industry, however, claimed that the procedure is much simplified and easy to understand currently. Due to various complications, the department was forced to form a new standard and simplify the procedure further.

“The revised cash incentive procedure may be simple for big organisations but it’s quite confusing for the exporters to give detailed information about all the deprecation values, and interest,” Shrestha said, adding that the revised cash incentive procedures are not as simple as the department’s claim. “The department should approves the bills of payment and purchase, bank payment certificate and invoice to make it easier for us that will help verification of actual value addition of our products,” he said, “We are also ready to provide our balancesheets for verification.”

The raw material cost of pashmina products has increased by 40 per cent recently, according to the association that imports raw materials from China.

“Currently, the pashmina yarn costs Rs 140 per kg, that used to cost Rs 105 per kg earlier, which has directly increased the cost of production,” said Shrestha.

The increased production price has dragged the pashmina exports down. During the first five months of the current fiscal year, it has witnessed a decrease by 12.81 per cent compared to the same period last year, according to the Federation of Handicraft Association of Nepal. “Our products would have been more competitive in the international market, had the government made the procedures simple to get the cash incentive for pashmina,” he added.

During 1999-2000, Nepal used to export pashmina products worth Rs 5.66 billion but it has dropped to almost five times to Rs 1.41 billion in 2001-02 due to flooding fake pashmina products in the market.

However, the annual export of pashmina stood at Rs 1.65 billion in the fiscal year 2010-11, which was Rs 1.29 billion in the fiscal year 2009-10. The association urged the government for a support of Rs 6 million for it’s the trademark ‘Chyangra pashmina’ promotion and marketing, that could help boost the original pashmina products and check the fake products.

“We are very hopeful to get the support from the government, along with the cash incentive, which will be a support to make our product more competitive in the international market,” he said.

The trademark has already been registered in 40 countries and is in process of being registered in seven more countries. It will guarantee the authenticity of the product – quality, softness and natural fibres — and help boost pashmina exports.