Nepal's import of sugar confectionery is growing rapidly, with 16 percent average annual growth. However, the import of such products has seen an exceptional downturn in the last two years due to the increase in customs duty. With the changing consumer behaviour as the young generation is more inclined toward consumption of different varieties of sugar confectionery, the demand for such products is expected to increase in the near future.
Some Nepali producers have been trying to increase their share of the domestic sugar confectionery market. However, their efforts have met with a little success, primarily due to the huge import of cheap products from neighbouring countries. Nepali products are less competitive as our neighbours are getting benefits of economies of scale, value chain, use of high-end technology for production and seamless movement of raw materials and final goods.
In keeping with these factors, Nepal should take initiation to reduce the cost of domestic sugar confectionery products. Incentives, subsidies, tax waivers and imposition of higher tariff on imported confectionery can be some measures to make Nepali sugar confectionery products competitive.
The government should call on Nepali industrialists with these lucrative incentives with a view to increase investment in the confectionary business.
Nepali confectionery entrepreneurs should also accept the challenge to become competitive and upgrade their industries with high-end technology, follow the worldwide accepted norms related to quality of the products. They should concentrate their efforts to produce sugar confectionery with unique Nepali flavour and brand it with Nepali identity.