Earlier, juice, cardamom, textiles, and jute were the major export commodities to At a time when trade of major export items to India has been declining following the enforcement of goods and services tax (GST) in the Southern neighbour, new products in Nepal have emerged as top export items, per the data of ending months of 2074 BS.
India. However, export of these products had been less than encouraging in the ending months of 2074. After India has reviewed tariff structure in the new tax regime and introduced integrated GST, consolidating state level tariff and central government’s tax on imports, export to India had become costlier for Nepal.
At that time, export of cattle feed had increased substantially and emerged as one of the top export items to India. The country exported cattle feed worth Rs 2.41 billion in the earlier months of 2074/75.
Industries manufacturing cattle feed had been stating that items including oil cakes were being exported to India under the category of cattle feed.
Export of finished items including cattle feed might not have increased considerably but export of raw items like mustard oil cake, among others, increased substantially. It appeared that the country’s export bin to India would see a gradual change as the products that were known as the major export items to India in the pre-GST regime were not very competitive in the new tax regime.
The export items to India have been finding it hard to be sustainable even till this year. Earlier, the Nepali industries that used to enjoy duty protection regime would take advantage of duty differences between India and Nepal.
During the operation period of the Nepal-India Trade Treaty of 1996, which had provided more liberal framework in trade relationship, vegetable ghee and zinc oxide, among others, became major export items to India. Later, export of ginger to India increased substantially, but the export items that emerged in different time intervals were not sustaining for a long period.
Two-thirds of Nepal’s trade takes place with India. Nepal’s import concentration with India has been increasing as it has been comparatively cheaper to import goods from India.
The introduction of GST in India has been providing an opportunity for Nepali exporters to diversify their trade because export to Indian market
has been becoming less competitive.