Non-tariff Measures (NTMs) About the Survey Profiles of Interviewed Companies Results of the Survey Why exporters find NTMs Burdensome? Burdensome NTMs and other Obstacles Faced by Exporters Challenges for Nepalese Cargo and Logistic Companies Trade Related Business Environment (TBE) Recommendations

1. NEPAL: COMPANY PERSPECTIVES
AN ITC SERIES ON NON-TARIFF MEASURES
Kathmandu University School Of Management (KUSOM)
Subject: International Business Management
Term/Trimester: MBA Third Term
Year: 2018
GROUP 5
Sweta Bhattarai (17304)
Dipesh Raj Pandey (17321)
Monika Rajbhandary (17325)
Shishir Sharma (17329)
Srijana Sharma (17330)
Laxman Subedi (17334)
Roshani PakhrinTamang (17335)

2. INTRODUCTION: NTMS
• Inadequate domestic trade-
related infrastructure
• Administrative/Procedural
Obstacles
• Lack of Export-Support
Services
• Insufficient access to
information on NTMs
A growing
obstacle to
international
trade for
importers and
exporters in
developing and
LDCs
Prevent market access
Turn down opportunities

3.  Provide a better understanding of the trade obstacles experienced by
Nepalese companies
 Identify potential bottlenecks related to trade procedures and cross-
border operations in Nepal
Ministry of
Commerce
Nepal
ABOUT THE SURVEY
March 2016 - September 2016

4. SURVEY IMPLEMENTATION & SAMPLING
Compiled
Registry of
Exporters (1100)
Contact for
Interview
Phone Screening
(577)
Face-to-Face
Interview (258)Calculate
Sample Size
Main sector of activity
Direction of trade
Difficulties with NTMs

5. PROFILES OF INTERVIEWED
COMPANIES

6. TRADE PROFILE
 The survey focused on
exporting companies
 Most were involved only in
export business

7. PRODUCTION PROFILE & EXPORT
PROCESSING
Most exporters produce the goods they export
Many exporters rely on cargo and logistics companies for export processing

8. SIZE AND LOCATION
 Small Enterprises made up
most of the respondents
 Wide geographic coverage
of over 22 cities
 Majority of surveyed
companies based in
Kathmandu

9. EXPORT SECTOR
 Agricultural sectors comprise 25% of all exporters interviewed
 Manufacturing sectors make up 75% of the surveyed companies
 Agricultural products export represent 29% of total national exports
 Manufacturing products export represent 71% of total national exports

10. DESTINATION MARKET
AGRICULTURAL
 SAARC Region (India)
 Asia
 Europe
MANUFACTURED
 Europe
 North America
 Asia
 SAARC Region

11. WOMEN EMPLOYMENT & LEADERSHIP
 Share of female employees is 40% on
average
 Medium and large companies
employed a higher share of women
compared to smaller companies
 Only 27% of the companies are
women led
 Most are managed and owned by
men

12. RESULTS OF THE SURVEY

13. RESULTS OFTHE SURVEY
51%
Exporters report facing
restrictive regulations or
related obstacles to
trade in Nepal or
abroad when exporting

14. RESULTS OFTHE SURVEY

15. EXPORTERS OF AGRICULTURAL PRODUCTS
ARE HIGHLY AFFECTED BY NTMS
0% 10% 20% 30% 40% 50%
Agriculture
Manufacturing
Affected Percentage
Imports
21%

16. EXPORTERS OF AGRICULTURAL PRODUCTS
ARE HIGHLY AFFECTED BY NTMS
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Agriculture
Manufacturing
Affected Percentage
Exports
51%

17. SHARE OF AFFECTED COMPANIES IS
BIGGER AMONG LARGE COMPANIES

18. WHO APPLIESTHE REGULATIONS?

19. DIFFICULTIES WITH NEPALESE
REGULATIONS
 Nepalese laboratories not being able to do the necessary testing
and issue the required certificates
 Advance Payments
 Charges tax on Sales return

20. WHY EXPORTERS FIND NTMS
BURDENSOME?

21. MAJORTYPES OF POS
POs:
Unavailability of testing/certification facilities
High fees charges to obtain the certification or
testing
Informal payments to get the necessary paper work
Delays and time constraint
Facilities lacking international recognition
Arbitrary behavior of officials

22. BURDENSOME NTMS AND OTHER
OBSTACLES FACED BY EXPORTERS

23. BURDENSOME NTMS AND OTHER
OBSTACLES FACED BY EXPORTERS

25. CHALLENGES FOR NEPALESE CARGO AND
LOGISTIC COMPANIES
 Facilities at Nepal Customs is not sufficient but is improving
 Companies face difficulties on transit and cross-border trade with India

26. AGRICULTURE SECTOR:
EXPORTER’S DIFFICULTIES
Tea
• Inadequate
testing
facilities
• Burdensome
MRL testing
in India
Honey
• Lack of
uniform
quality/taste
inadequate
storage
facilities
• Lack of
testing
facilities
Ginger
• Strict testing
in Kolkata
• Custom bill
to be signed
by Indian
Assistant
Commission
er(Value
>10,00,000)
Cardamom
• Requires
each
consignment
to be tested
• Difficult to
pass
shipment
without
unofficial
payment
Coffee
• Various
organic
certification
for different
countries
Herbal
products
• Lack of
adequate
standard
and
certification
system

27. MANUFACTURING SECTOR:
EXPORTERS DIFFICULTIES
Handmade
paper
• Quality
certification
• SPS
requirement
Carpets
• No
laboratories
to test
• Paper work
hassles to
export in
India
Garments and
Pashmina
• Obtaining
necessary
certifications
Leather
Products
• Rejection of
certificate
issued by
veterinary
doctor of
Nepal

28. TRADE RELATED BUSINESS ENVIRONMENT
(TBE)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Inadequate
Electricity
Supply
Corruption Lack of
Adequate
Testing Facilities
Share of companies whose business operation is
negatively affected by business environment
conditions in Nepal
Share of Companies

29. TRADE RELATED BUSINESS ENVIRONMENT
(TBE)
66%
52% 50%
0%
10%
20%
30%
40%
50%
60%
70%
Trade Financing
Services
Information Sources Computerized
Procedures
Share of Companies and their perception on improvements
Share of Companies

30. BUSINESS ENVIRONMENT CONDITIONS IN
NEPAL
 Lack of human resources in the agencies
 Lack of access to inputs for production
 Time delays
 Inconsistent/ arbitrary behavior of officials
 Road blocks and checkpoints
 Limited transportation system
 Complex clearance mechanism
 Limited or extremely expensive airline
transportation
 Lack of storage facilities, including cooling
 Low security level for persons and goods
 Ineffective legal enforcement
 Lack of access to information, no enquiry
point
 Need to hire a local customs agent to get
shipment
 Limited or lack of access to trade finance
services
 Lack of accessible business oriented legal
support
 Lack of electronic/ computerized
procedures

31. PRESENT SCENARIO
 General conditions at custom points.
 Customs modernization and infrastructure development
Automation
Road
infrastructure
Facilities at
custom

32. TRADE FACILITATION: AWORK IN PROGRESS
National bodies for trade facilitation:TFC(trade
facilitation committee)
Ratification of theTrade Facilitation Agreement (TFA)
Ratification of the Revised Kyoto Convention

33. QUALITY AND SAFETY STANDARDS
Nepal Council for Standards (NCS) : governing body for Quality,
Standards,Testing and Metrology (QSTM)
Nepal Bureau of Standards and Metrology (NBSM): 15 laboratories
SPS bodies and laboratories
Regional standards and mutual recognition

34. OTHER DEVELOPMENTS
Accreditation
New transit routes
NTM Desk and theTrade Promotion Network

35. RECOMMENDATIONS
 Enhance customs infrastructure
 Upgrade transport infrastructure
 Engage with India for trade facilitation and dispute settlement

36. RECOMMENDATIONS
 Strengthen the capacity of testing and certification bodies
 The NTM Survey highlighted a significant lack of testing and certification services in
Nepal related to SPS (Sanitary and Phytosanitary Standards) andTBT (Technical
Barriers to trade) requirements as well as in other areas.
 DFTQC (Department of FoodTechnology and Quality Control) , NBSM (Nepal Bureau of
Standards and Metrology)

37.  Diversify the economy
 Enhance trade transparency
RECOMMENDATIONS

38. SECTORAL STRATEGIES
Large Cardamom
• Improve production and
postharvest practices to
increase value retention
• Foster sector
development
coordination and
research
• Promote two variants,
Black and Pink Everest
Cardamom to achieve
greater market
penetration and
diversification.
Nepali tea
• Improving the quality of
green leaves
• Improving compliance to
meet market demand
• Reinforcing institutional
coordination to manage
quality and improve
market access
• Developing Nepali tea
varieties
Nepali Coffee
• Improving the quality of
cherries
• Developing support capacities
for coffee related cooperatives
and ensuring more organic
certification
• Strengthening national sector
development coordination
• Enhancing recognition of
Himalayan specialty coffee in
domestic and foreign markets.
Handmade Paper
• Enhance sustainable
development of Lokta
collection and production
• Diversify and upgrade
the quality of sustainable
handmade paper
production and paper
products to meet market
demand
• Strengthen institutional
support to small and
medium enterprises

39. THANK
YOU