South Asia Watch on Trade, Economics and Environment (SAWTEE) organized a roundtable dialogue on “Pathways to enhance exports through innovation” to identify and examine constraints to exporting faced by exporters and to discuss the types of innovation support available to exporters from government and private agencies.
Background Note
Nepal is struggling with depleted foreign exchange reserves as the import bill surges and export performance remains dismal. The policy thrust, in practice, appears to be on imposing import controls to arrest the reserve depletion. Interventions that boost exports on a sustained basis require careful planning and implementation. With Nepal graduating from the least developed country category in 2026, it stands to lose trade preferences in important markets. Innovation is crucial to achieving broad-based and sustained export growth.
The objectives of the roundtable are to:
- Examine the critical constraints faced by existing exporters and those firms that want to break into export markets.
- Identify constraints to exporting that are particularly painful to small and medium-sized firms and women-led firms.
- Discuss the types of innovation support available to exporters from government and private agencies, and the required innovation support measures; and
- Discuss other types of support needed by exporters in general and small and medium exporters in particular.
Presentation
Proceedings
28 September 2022: Commencing the dialogue, Dr. Paras Kharel, Executive Director, SAWTEE, highlighted in his presentation that the low export earnings in Nepal is because of inability to scale up production and exports of existing products, inadequate diversification of products and inadequate diversification of markets. He stressed on Nepal losing its trade preferences in important markets with LDC graduation. He said, “With the loss, there will be the need of enhancing productivity and competitiveness. That’s why there is a need of innovation to achieve broad-based and sustained export growth.”
Mr. Sarad Bikram Rana, Executive Director, Trade and Export Promotion Center (TEPC) pointed out that despite the Nepal Trade Integration Strategy (NTIS), trade related infrastructures, customs modernization, export incentives, National Single Window System and other trade policies, export of Nepal is stagnant. The major reason behind this is the lack of programs and policies to enhance the capacity of SMEs in production level, he said.
Mr. Rana said that exportable surplus should be generated to promote export. He also emphasized that the national budget should align with the strategies brought by the government.
Mr. Govinda Ghimire, Immediate Past President, Nepal Herbs and Herbals Products Association (NEHHPA) said that Nepal’s performance in international expo and trade fair is very poor. He further pointed out that we haven’t yet focused on B2B channels. Stressing the importance of microlevel study on value chain of commodities, Mr. Ghimire also talked about promotion of trademark, labelling and designing as a significant innovative support measure of export.
Ms. Urusha Chapagain, Marketing Director, Gorkha Tea Estate began her remarks by stating political instability as a main problem that has restricted exporters to meet their expectations.
Mr. Naresh Shrestha, Member, FNCCI executive committee, highlighted higher cost of production, long transit, higher cost of raw materials, lack of quick and quality access of products as major challenges in Nepal’s export. Mr. Shrestha emphasized on providing cash incentive and subsidized loans to exporters, training and technology to labour to enhance exports in Nepal.
Ms. Neelu Raimajhi Khatri, President, Federation of Woman’s Entrepreneurs’ Association of Nepal (FWEAN) made a point on the importance of capacity building of women entrepreneurs and women friendly technologies to promote export in Nepal. Ms. Khatri said, “Government should provide venue and infrastructures for organizations like FWEAN to conduct trade expos, bring maximum number of entrepreneurs and businesses and encourage them to showcase their products to potential buyers.”
Mr. Rajan Sharma, Former President, Nepal Freight’s Forwarders’ Association in his opening remarks said that we don’t sell what we have but we sell the products that are demanded by buyers. He also mentioned that our capacity to sell, market and negotiate the product is very weak. Focusing on role of associations, he stressed the linkage between government and grassroot producers as well as right dissemination of information on destination market.
Mr. Sharma said, “SMEs are facing major issues in Nepal. Hence, a toolkit should be developed to provide trainings on identifying actors of supply chain, quality maintenance, export-relatedinformation etc. from the grassroot level.
Mr. Sunil Chitrakar, Chairperson, Fair Trade Group Nepal said that government should focus on producing human resources who can design products according to market trends. He further added, “Mechanisms have to be built to cover business risks of entrepreneurs and exporters.”
Mr. Narayan Krishna Kharel, Federation of Export Entrepreneurs Nepal (FEEN) stated that people, cash, strategies, and execution should be focused to increase export. He said that products in worldwide trends should be kept in focus for production. He also opined that Nepalese have a trading mindset which should be changed to entrepreneurship mindset. He added that curriculum should be developed in a way that promotes entrepreneurship and innovation from school level.
Dr. Posh Raj Pandey, Chairperson, SAWTEE moderated the dialogue. The roundtable dialogue brought together trade experts, logistics experts, academicians, and exporters.
