Foreign trade in Nepal

Nepal produces sufficient sanitary pads and child diapers. The nation consumes a total of 400 million models of sanitary pads yearly, of which 250 million models come from overseas. Nonetheless, Nepal’s manufacturing capability is 600 million models. Equally, although Nepal is self-sufficient in the manufacturing of child diapers, they are being imported. If the federal government can reduce manufacturing costs by implementing mandatory coverage to discourage imports, it will be possible to export to the massive markets of China and India by simply assembling domestic demand. Here is a short conversation with Dolaraj Adhikari, a member of the Federation of Nepalese Chambers of Commerce and Trade’s Trade Committee:

What’s the market scenario for sanitary pads and children’s diapers in Nepal?

There are 24 industries in Nepal producing sanitary pads and child diapers in Jhapa, Biratnagar, Dhangadhi, Mahendranagar, and different areas. There’s a mean funding of around Rs 7 billion in these industries, out of which 2,000 individuals have gotten direct employment and another 3,000 individuals have gotten oblique employment. A total of 400 million models are consumed yearly, whereas the manufacturing capability of the business is greater than 600 million models. Mockingly, around 250 million models are imported from other countries, while the rest are made in the United States.

He mentioned that regardless of the manufacturing capability of Nepal, massive portions are being imported. What’s the meaning of “import”?

During the fiscal year 2077/78, sanitary pads worth more than Rs 1.17 billion were imported. Equally, diapers valued at Rs 1.62 billion have been imported in the identical interval. Equally, sanitary implements valued at Rs 930 million and diapers valued at Rs 1.53 billion have been imported within the first 9 months of the current fiscal year. Furthermore, 90% of this is imported from India. is imported from China, Hong Kong, Taiwan, and the UK.

Giant portions are being imported from overseas as the federal government has not discouraged imports. The federal government is neglecting to cease imports whereas the manufacturing as per the demand of Nepal is being carried out right here. About Rs 3 billion is spent on sanitary pads and children’s diapers yearly. If this much money could be kept in the country, it would be easier on the country’s budget.

Where do the uncooked materials for sanitary pads and child diapers produced right here come from?

Though Nepal is self-sufficient in the manufacturing of those two commodities, it isn’t self-sufficient in the manufacturing of uncooked supplies. Uncooked supplies need to be imported from Canada, Singapore, India, and China. Giant funding is required for the manufacturing of uncooked supplies right here. It costs around Rs 1 billion to open a business. Nonetheless, an investment of Rs 20–25 billion is required to supply uncooked supplies. In such a scenario, the manufacturing of uncooked supplies in Nepal shouldn’t be simple. Nonetheless, manufacturing is feasible if the federal government offers the mandatory assistance.

What has the federal government done to cease the import of sanitary pads and children’s diapers?

The price of items produced right here is excessive. Subsequently, imports could be utterly diminished provided that the price of items produced in Nepal could be diminished. The federal government ought to provide the land needed to open the business. The rate of interest of the financial institution giving the business loan needed to be higher and cheaper than other loans. Subsidies for the manufacturing industries’ electrical energy must also be provided. The import of uncooked supplies for these things from overseas is subject to a five-percent customs obligation. The customs obligation on imported items is 15 p.c. Prices could go down as long as the tariff rate on raw materials also went down.

If this occurs, the value of home merchandise will come down in comparison with imported items. Subsequently, home merchandise can be utilized as an alternative to international merchandise. Nonetheless, the federal government could not use Nepali merchandise simply by selling it. As a result, when international merchandise is cheaper than domestic merchandise, customers choose the same.

Nepal is linked to two big markets, like India and China. Is it not doable to supply right here and export to these two massive markets?

India has a population of 1.3 billion and China has a population of greater than that. The manufacturing in these international locations is greater than in Nepal. When producing in massive portions, the manufacturing value is routinely diminished. Nonetheless, there’s a risk of exporting to India and China by producing in Nepal. The federal government ought to make some coverage preparations for this.

When importing uncooked supplies from overseas, the customs charge needs to be 1 p.c. Exports to the massive markets of India and China have the potential to double if subsidies on electricity and steady rates of interest for manufacturing industries are maintained. In any other case, exports are usually not simple.

What’s the manufacturing history of sanitary pads and children’s diapers in Nepal?

Sanitary pads have been used right here for 20 years. Nonetheless, it has been 12–13 years since it came into vogue. Jasmine Hygiene Trade of Biratnagar is the primary sanitary business. It has been 12–13 years since it was opened. Since then, there are 24 such industries in Nepal. And four of those are massive industries.

What’s the product of your business, AG Well-being Trade?

It has been 5 years since AG Wellbeing Trade was opened. It’s in Madaulia of Rupendehi. And, it produces 450 items of child diapers per minute and 700 items of sanitary pads per minute. It’s a high-tech business. And, the business has offered direct employment to a total of 400 individuals. AG Well Being Industries has been producing Sagun Child Diapers and Sagun Sanitary Pads. The business is spread over 2 bighas of land and has a fund of Rs 1 billion.

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