What is the current situation of Nepal's service trade?
This is the age to take benefit from trade. However, the landlocked country has failed to take benefit from both merchandise trade and services. Nepal's trade in services has grown in recent years. However, the sector is not properly moving forward as expected. There is nominal growth, but it is not sufficient.
Why do you think it is important to tilt towards service trade?
Nepal has long been facing a heavy deficit in merchandise trade. The big hurdle for a country like Nepal is the non-tariff barriers. In this context, low-cost manpower and being free of trade and transit issues could help. Diverse service trade means an increase in the export basket. Nepal has a temporary movement of people across the border to supply services. Additionally, travel-related activities that constitute nearly two-thirds of Nepal's commercial exports are also important for Nepal.
What is Nepal's potential in this segment?
Nepal has high potential in software development, the IT sector, and medical tourism. For instance, many Indians from bordering areas visit Nepal for eye treatments. Nepal has failed to utilise its tourism to the fullest.
What are the major challenges?
Nepal faces a lot of challenges to grow its service trade. Lack of network development, lack of high-skilled manpower, data flow, and data management are all among the major challenges.
What can be done to overcome these challenges?
We need to carry out market research to identify a comparative advantage in the service trade. If you want to sustain the business, you need to search for products and services that are defined by the fundamentals of that economy.
To get the maximum benefit, Nepal needs to adopt several measures such as improving working conditions, training semi-skilled labour, regulating manpower companies, simplifying rules, and creating awareness through campaigns. Providing vocational and language training to the low and middle-level manpower of Nepal will also be beneficial.