Export Potential of Nepal

The initial finding of a study on the export potential of Nepali products and services has identified seven items as having high prospects.

Among the 18 products and services examined by the International Trade Centre (ITC) of Geneva large Cardamom

, lentil, tea, instant noodle, medicinal herb and oil have been picked out as having great export potential. Tourism and labour are among the services found to show much promise.

According to ITC, labour is Nepal's largest export worth

US$ 2.4 billion followed by tourism worth US$ 352 million in 2008.

The labour sector will remain the largest export in the future too, said the finding.

Among export goods, lentil is in the first place with US$ 22 million followed by pasmina products and large cardamom.

One of the experts involved in the research Andreas Lendle said at a discussion on Sunday that export potential was determined on the basis of the existing level of export, size of the world market and conditions of market access (tariff structure) and domestic supply condition.

Other sectors like ginger, honey, silver jewellery, pashmina products, wool products, information technology and business process outsourcing.

(BPO) services and engineering services have a medium-level export potential.

Handmade paper, health services and educational services have low potential. Among the 18 sectors studied, 12 are goods and six are services.

Nepal has a comparative advantage in nine products in terms of tariffs being imposed on Nepal against its top five competitors.

Nepal has an advantage in ginger, honey, tea, instant noodle, medicinal herb, silver jewellery, transformer, pashmina and wool products in

terms of tariff.

Nepal has a disadvantage against other competitors in handmade paper and lentil. The ITC has suggested reducing high dependency on India for export of cardamom, ginger, lentil and tea. It has also stressed the need to brand these products.

"There is a need for branding noodles too," the ITC said. Regarding offshore business, the finding

showed that it could have significant potential and even India could outsource jobs to Nepal. Regarding hydropower, the study revealed

that it has much potential but was hardly utilised.

The ITC suggested that some sectors needed government support despite their low export potential as they can have a significant impact on poverty reduction.

Products such as instant noodle, handmade paper, medicinal herb and wool products and services like tourism and labour have a higher socio-economic impact than other goods and services.