Business with China
The Nepalese Secretary at the Ministry of Commerce and Supplies, Lal Mani Joshi recently signed a dutyfree trade deal with Chinese ambassa- dor to Nepal, Yang Houlan. The trade deal will significantly boost bilateral economic relations. The agreement, which will come into effect in January 2013 and will entitle 7,787 Nepali products to enter China on zero tariff. In addition to this, the deal will boost Nepal’s exports and reduce its trade deficit with China, which currently stands at NPR 51 billion. Furthermore, Secretary Joshi requested China to invest in Nepal to help the latter overcome its supply side constraints and revive its industrial sector.
The two neighbors signed a similar agreement in 2010 where Nepal received zero-tariff facilities for 4,721 products but this move did not provide any significant growth potential to Nepali businesses. Furthermore, Nepali traders complained about hassles created by Chinese custom officials, which discouraged exports to China
This time, Nepali traders are hopeful that the deal will improve the country’s negative balance of payment with China. According to data from the Trade and Export Promotion Center, Nepal exported goods worth Rs 985.6 million to China during the fiscal year 2011/12 and imported goods worth Rs 52.92 billion during the same period.