Revised NTIS aims to address supply-side constraints

Kathmandu, May 18

As supply-side constraints are considered to be the major barrier to boost export, the government will give more focus on productive capacity enhancement as well as institutional capacity development through Nepal Trade Integration Strategy (NTIS) 2016-20.

The NTIS 2016-20, which was endorsed recently by the Economic and Infrastructure Committee of the Cabinet, is the blueprint of the Ministry of Commerce to mobilise aid for trade and partner with the private sector for trade capacity enhancement.

While the five-year strategy is an extension of NTIS 2010-15, the revised document has given more emphasis on the cross-cutting issues that are very essential for enhancing trade capacity like institutional capacity building for trade negotiation, improved business environment for trade and investment, trade and transport facilitation, standards and technical regulations, sanitary and phyto-sanitary standards, intellectual property rights and payment-related issues, among others.

Along with institutional capacity development, the strategy has also prioritised some products and services for the productive capacity enhancement. Agro forestry-based, craft and manufacturing-based and service sector products have been listed as priority export products and services.

Slashing the list of 12 products and seven services from earlier document, the revised document has prioritised only nine products and three services. Products listed under priority for export in NTIS 2016-20 are tea, cardamom, ginger and medicinal and aromatic plants. Apart from agro forestry-based products, some crafts and locally manufactured products like carpets, leather products, pashmina, footwear and textiles have also been listed.

Similarly, under the service sector, semi-skilled and skilled professional services, information technology and business process outsourcing and tourism (including health, education, business and leisure) have been prioritised.

The products and services listed under NTIS have niche market advantage.

“The products and services selected for NTIS are based on the export performance and from the perspective of inclusive and sustainable development of country,” said Ravi Shankar Sainju, joint secretary at Ministry of Commerce.

The new strategy has set the target of expanding export of merchandise goods (listed under NTIS) to four per cent of gross domestic product by 2020 from the existing two per cent.

As the product development falls under the jurisdiction of various ministries, the NTIS, 2016-20 has provisions of focal point for the products and services. The focal point will be the joint secretary of the concerned ministry or head of departments.

As the Commerce Ministry has been receiving support mainly from the Enhanced Integrated Framework (EIF) — the aid for trade mechanism of World Trade Organisation for trade capacity enhancement of least developed countries — the revised document has envisaged commerce minister-led EIF National Steering Committee for effective implementation of strategy.

Apart from EIF’s support, the Ministry of Commerce will also mobilise its own resources for the implementation of the strategy.

Nepal mobilised $1.5 million under institutional capacity development support and $6.46 million under productive capacity development from EIF for three projects — ginger, pashmina and medicinal and aromatic plants in between 2010 to 2015. The country will seek further support for the implementation of NTIS 2016-20.