Silver jewellery manufactured in Nepal is handmade. And this is the reason that Nepal has comparative advantage in silver jewellery exports. Some traders claim that although other countries, mainly India, also manufactures handmade silver jewellery to some extent, they are different than the ones manufactured in Nepal by Nepali artisans. Moreover, Nepali silver jewellery has earned trust in the international market and many foreigners prefer Nepali handmade silver jewellery to those made in other countries. In order to enhance exports of silver jewellery from Nepal, it is necessary to identify problems and challenges in the sector and take measures to rectify them. Traditional process of manufacturing silver jewellery through the maximum use of human resources in all steps of the manufacturing process in Nepal makes the silver jewellery sector labour-intensive.
The silver jewellery sector of the country has the following Strength, weakness, opportunities and threats (SWOT)
Strength
The silver jewellery has good access to imported sterling silver, gems and semi-precious stones. There are skilled and efficient artists and crafts persons with high product development expertise to develop products with unique arts, and design. The silver jewellery products of the country has high value addition that is of about 40 – 50 per cent of export value and has its own registered trademark in the market. The product too has an extensive exposure to international market. The product is always developed in joint efforts with the buyers and it has its own well-established market where specialized products with regular design are exported.
Weaknesses
Lack of sophisticated new technologies such as laser machine for soldering, casting equipment set, modern software for designs and other innovative technical support required in the product development. The sector also lacks support for design and product development. Another problem is high costs of imported raw materials, packaging materials and high cost in developing market linkages. Difficulty in identifying matching partners and risks of single buyer to some exporters. There is also lack of policy and institutional support to strengthen competitiveness.
Opportunities
The silver jewellery sector has identified the European Union as the most promising market for newly created designs. Many new and potential markets such as Russia, South Korea, and South Africa, and Japanese market are promising with new customers and demand for new items. Niche products for Japanese market such as wedding rings and availability of trainable labour all over the country are advantages for this sector.
Threats
One of the major issues the silver sector is facing is the increasing price tag of the products as overall economic environment has increased the costs of various components of the industry. Threats from competitors in India, Thailand, Indonesia and Mexico remain stiff. Foreign competitors have imitated original Nepali designs, trade volumes do not support high costs of market penetration and mixing of cadmium has affected Nepal’s reputation in market
Source: A study report of SAWTEE
