Trade Policy

In 1912, the government declared a new trade policy. This policy aims to increase the trade sector's contribution to the national economy of the nation. By fostering an environment that is open and liberal, the strategy seeks to advance both domestic and international trade as well as private sector engagement.

According to the policy document, the primary goals of Trade Policy, 1992 are to:

• Increase the contribution of the trade sector to the national economy by fostering both domestic and international trade with greater private sector involvement.
• Fostering an environment of openness and liberalism diversify trade by identifying, developing, and encouraging backward-producing new exportable products.
• New exportable products linkages for making export trade competitive and sustainable through gradual reduction.
• Increase employment-oriented trade to balance the trade deficit and coordinate trade with other industries.

Three parts make up the new trade policy: the basic policy, export policy, and import policy. Only a few products are subject to import and export permission requirements under the current trade policy. The majority of goods can be imported or exported without a license. Procedures for import and export have been greatly streamlined. Additionally, there are no restrictions on the volume or quantity of exports, with the exception of some illegal goods and particular items.

Basic Policy

The following policies and programs make up the core of the 1992 Trade Policy:

• A liberal and progressive strategy will be implemented with the aim of enhancing the balance of payments position by encouraging product exports to boost foreign exchange profits as well as by satisfying the domestic demand for affordable, high-quality items.
• Utilizing economic resources in an efficient manner will increase the production of high-quality goods and services for both domestic consumption and exports.
• Trade will be promoted and diversified, both in terms of the types of commodities traded and the countries to which they are directed.
• The gradual privatization of the public sector trading enterprises will take the growth and effectiveness of the private sector into account.
• Liberal processes will be used to encourage trade and industry contact for continued export promotion and for a fulfillment of internal demand through greater domestic production. Modernizing management and technology will be prioritized in order to expand the market, attract direct foreign investment, find and create new products, and improve the production and quality of existing products.
• The promotion of international trade shall be achieved through the proper implementation of current trade treaties and agreements with various nations and international organizations, as well as the conclusion of new ones as and when required.

Export Policy

The following key policies and initiatives are part of the Trade Policy, 1992's export component:

• To make exportable goods competitive on the global market, output and quality will be increased.
• To raise foreign exchange profits, necessary efforts will be made to boost and diversify exports of goods and services.
• By increasing the production and quality of both new and traditional goods, exports will be encouraged. The export of profitable yet processed and finished goods will also receive increased attention. New markets will be found to help these products be promoted for export.
• By finding new items and boosting their production, foreign exchange profits will increase and chances for gainful employment will be established. The promotion of service-oriented activities will boost foreign exchange profits.
• Hydroelectricity export on a profitable basis will be promoted.
• Stress will be placed on the development of suitable and potential skills to enhance the service sector as well as the organized export of skilled labor in order to make the most use of the available labor force.

Import Policy

In order to foster a competitive industrial and trade environment and to facilitate the supply of resources needed for the nation, imports will be planned as a medium of export development and promotion, according to the Trade Policy, 1992. The following are the specific import policies and strategies:

• Exports and imports will be connected. The creation of exportable commodities will effectively utilize locally available resources, imports of direct and indirect raw materials will be promoted, and the provision of basic necessities will be made easy.
• The current open import policy will remain in place, and the import processes and documentation will be more streamlined and organized. A strong monitoring mechanism will be put in place to stop any irregularities with imported items.
• Customs duties on imports will be changed in accordance with SAFTA and WTO specifications and principles.
• Imports will be made fully transparent. Imports that go against the interests of the general public shall be completely forbidden.

The main goal of the new trade policy is to switch from industrialization that replaces imports to export-led economic growth. The private sector can currently operate in many industries. The policy is also favorable to international investors that invest in the production of hydroelectricity. Unless there is a substantial demand for hydropower, foreign investors will not invest in it. As a result, the concept envisions exporting hydropower to the region's neighbors, particularly India.

References:

• agtrade.blogspot.com/2011/08/trade-policy-of-nepal.html
• books.google.com/books?isbn=143877060X
• neffa.org.np/wp-content/uploads/2014/02/Trade_Policy.pdf
• Pant, P. R. (2009). Business Environment in Nepal (SIXTH ed.). Kathmandu, Nepal: Buddha Academic Publishers and Distributers.