Sunday, 3 March, 2024

Notable Export Growth

Promoting export trade is crucial for a country like Nepal which has seen a continuous trend of trade deficit. We have to focus on industrialisation so as to boost this form of trade. A rapid increase in exports can lead to an exponential rise in the country’s foreign currency earnings. It helps to boost foreign currency reserves. Export prospects trigger productivity and employment generation within the country. Bearing this in mind, Nepal has prioritised the expansion of export trade. The government and the private sector have been working together to push the country’s export business and realise the desired economic growth. Although the country has been grappling with numerous problems and challenges, it has witnessed a record-high growth in the export trade during the first eight months of the current fiscal year. This is a remarkable news at a time when the impact of the protracted COVID-19 pandemic has caused problems hindering the process of economic growth. This paves brighter way for post-pandemic growth our country.

As per the foreign trade figures unveiled by the Department of Customs, the country’s exports have gone up by 82.90 per cent to Rs. 147.74 billion during the period between mid-July 2021 to mid-March 2022. In the fiscal year 2020/21, the country had exported goods worth Rs. 141 billion. Products valued at Rs. 80.77 billion had been exported during the first eight months of the last fiscal year. It is notable that the growth of export in soybean and palm oil has remarkably helped the country gain such an encouraging export growth. During the review period, the share of these two products, among all the export items, was about 52 per cent. The country was able to export soybean oil and palm oil worth Rs. 41.40 billion and Rs. 35.32 billion, respectively, during the period. With the establishment of oil processing industries, the nation imports crude soybean oil and palm oil and exports them after processing.

However, the country still has a long way to go when it comes to maintaining trade balance as there exists a huge gap between export and import. Statistics show that the export-import ratio is still at 1:8.86. It means the share of export in the total international trade stands at only 10.14 per cent whereas import is at a whopping 89.86 per cent. In the review period, the country’s import trade rose by 38.64 per cent to Rs. 1,308.73 billion. So, the trade deficit grew by 34.50 per cent to Rs. 1,160.98 billion during the review period. The nation had imported goods worth Rs. 943.98 billion in the same period of the last fiscal year. The export of such goods is likely to remain affected in the near future with the country facing problems with the import of crude oil from Ukraine owing to the ongoing Russia-Ukraine war. Sunflower seeds and oil, cardamom, tea carpet and coffee are other main items that Nepal exports to different countries.

Nepal needs to work towards protecting, strengthening and operating local industries with comparative advantage to promote exports and substitute imports. Our capital has to be diverted to productive sectors than on import of luxury items. It is also essential for the nation to simplify the tariff code, explore trade potential, complying with all international standards and increasing participation in regional and global value chains by capitalising on regional integration. Only then the country’s products can have improved access to the global market.