Study on the Impact of Nepal’s LDC Graduation

SAWTEE entered into an agreement on 30 September 2021 with The Secretary of State for Foreign, Commonwealth and Development Affairs at the Foreign, Commonwealth and Development Office, South Asia Research Hub, British High Commission, ("FCDO") for implementing this project. 

Following the recommendation of the United Nations Committee for Development Policy (CDP) in late February 2021, Nepal is set to graduate from the Least Developed Country (LDC) category by the year 2026. While this is a testament to Nepal’s achievements in socio-economic development, the LDC graduation also poses challenges to graduating country, primarily through the loss of support measures provided to LDCs. Against this background, this study will assess the impact of LDC graduation, primarily in two-fronts—trade and development cooperation.  

With regard to trade-related impacts, the study will assess the impact of LDC graduation on market access (arising from erosion of tariff preferences as well as from increased stringency of rules of origin requirements) as well as on policy space (arising from the loss of certain special and differential treatments provided to LDCs). Likewise, the study will also explore the impact of LDC graduation on various aspects of development cooperation. The study will help the government forge a comprehensive transition strategy with regard to Nepal’s graduation from the LDC category.