The trade imbalance has now become a serious problem as the country’s trade deficit continues widening year on year, said secretary at the Office of the Prime Minister, Krishna Hari Baskota. “The government is serious to increase promotional activities for Nepal’s products in the international market for reducing the
trade deficit.”

According to Nepal Rastra Bank (NRB), the nation’s trade deficit with India has reached Rs 190.95 billion, out of the overall trade deficit of Rs 288.76 billion in the first half of the current fiscal year.

Trade deficit has a multiple effects since it drains money from the country’s economy, Banskota said, adding that remittance inflow has become crucial in maintaining Balance of Payment (BoP) of the country. It is not good for country’s financial health to rely on remittance inflow forever, he opined. According to the central bank, the country witnessed a total of Rs 266 billion remittance inflow in the first half of the current fiscal year.

Coordination among various stakeholders is a must to reduce hassles in trade, he said. The coordination among various stakeholders has not been materialised so far, he informed. It is time that policymakers and businesses made concerted and coordinated attempts to tackle country’s trade imbalances before we are faced with serious crisis, he further said, adding that it is also the right time to address the issue as the country is all set to get a moderate and liberal government led by parties which embrace liberal economy policy.

Elaborating further Banskota pointed that the ‘one stop services’ to promote export promotion has been limited to papers. “We need to seriously implement all provisions which the government has introduced with aim of facilitating trade activities,” he said. He blamed the private sector for being hell bent on collecting service charge rather than contributing to trade facilitation. It is not necessary to issue both Generalize System of Preference (GSP) and Certificate of Origin (CO) for the products. But, this hassle has not been removed, as private sector does not want to lower their profit, which they have been collecting while issuing these two certificates, he blamed.

Govt’s Mantra to Reduce Trade Deficit

• Establishment of herbs collection and processing centres
• Upgradation of labs
• Verification of organic products
• Acquiring collective trademark
• Government’s assistance in acquiring trademarks
• Increased participation in global trade fairs
• Effective implementation of Nepal Trade Integration Strategy 2010