New action plans aims to reduce trade deficit by one-third

Kathmandu, Aug. 20

With an aim of increasing export and downsizing export-import ratio to 1:10.5 in the next five years, the government has developed a ‘national action plan to reduce trade deficit’. 


The Ministry of Industry, Commerce and Supplies (MoICS) said that the action plan had ministry-wise responsibilities and targets to meet the ambitious goal. 


The export import ratio stands at 1.14.6 in the fiscal year 2018/19 with Rs. 97.11 billion exports and 1,515.67 billion imports. The ratio was all time high 1:15.3 in 2017/18. 


Although the government had formulated and implemented Nepal Trade Integration Strategy (NTIS) in 2010 and 2016, the country’s trade has not shown positive results in those years. 


The products included in the NTIS also failed to witness the growth in export which drew widespread criticism from the private sector and other stakeholders. 


In the meantime, Nepal also failed to diversify its international trade, both in terms of products and destination markets. Exports and imports both are more concentrated to India while trade that had been surplus with the countries like the United States of America has flip-flopped. 


Approved by the Cabinet on May 24this year, the action plan targets to develop products of comparative advantage and competitive capacity and promote export to substitute goods’ import.

It also aims to improve the quality of’ made in Nepal’ products, monitor the harmful goods and create industrial as well as trade infrastructure. 


The action plan also proposes to forge greater collaboration and coordination among at least 15 government agencies, and private sector when required. 


The responsibility of overall coordination and monitoring rests upon the Prime Minister’s Office and the MoICS. Progress review of the action plan will be conducted at the National Development Action Committee meeting and the secretary-level meting every four months. 


National Planning Commission (NPC), Ministry of Agriculture and Livestock Development, Ministry of Finance, Ministry of Foreign Affairs, Ministry of Culture, Aviation and Civil Aviation, Ministry of Energy, Water Sources and Irrigation, Ministry of Physical Infrastructure and Transport, Ministry of Forest and Environment, Ministry of Education, Science and Technology, Ministry of Communication and Information Technology, Ministry of Home Affairs, Ministry of Labour, Employment and Social Security and Nepal Rastra Bank are the other concerned agencies supporting to implement the action plan. 


“These agencies have specific responsibilities to implement and meet the targets. Overall objective is to create a favourable investment climate with industrial security, supply uninterruptible energy, expand  the latest technology, discourage the import of luxury goods and agricultural products,” Buddhi Prasad Upadhyaya, Under-Secretary at the MoICS, said at an interaction on the action plan. 


Madan Lamsal, editor of New Business Age, suggested signing investment agreement with potential source countries and creating brand Nepal. He said that the country should focus on trade in services. 


Joint-Secretary of the Ministry Madhu Kumar Marasini said that there was a need to increase attention to the Small and Medium Enterprises (SMEs). “SMEs are the backbone of most of the economies around the globe. Nepal has 144,000 SMEs which are employing about 1.7 million people,” he said. 


According to him, a focal point will be created in all agencies that have responsibility of implementing the action plan to facilitate coordination and put the policy in practice. 


Secretary of the Ministry Kedar Bahadur Adhikari said that investment facilitation was the priority of  the government.


Published in The Rising Nepal daily on 21 August 2019.