March 23: The government has adopted a strategy to promote export to reduce the country’s trade deficit. Accordingly, there has been a decline in import and a slight improvement in export in the past few years. However, the contribution of foreign goods in exports is more than domestic products.
According to the new policy to promote export, the then Finance Minister Dr Yuvaraj Khatiwada in the budget of the Fiscal Year 2075/76 BS made arrangements such as a massive increase in taxes to discourage imports and to give tax exemption on the import of raw materials for export.
However, so far, no productive environment has been created for the export of Nepali goods. Due to the inability to promote domestic products in the international market, the increase in export is mainly due to foreign products.
As there was high demand for palm oil in the Indian market, Nepali traders imported unrefined palm from Indonesia, Thailand, and Malaysia, processed it in Nepal, and exported it to India.
However, the Directorate General of the Foreign Trade of India imposed a ban on palm oil imports in the last week of December last year and imposed a complete ban from April this year. Due to the ban, Nepal's growing export suffered a severe setback.
However, exporters have found an alternative to palm oil. They are now importing raw soybean instead, and exporting refined soybean oil to India after processing  it in Nepal.

According to oil trader Pradip Murarka, soybean oil has taken place of palm oil as the chief export product of Nepal.

According to the Customs Department, in the first eight months of the current Fiscal Year,  export of soybean oil stood at Rs 23.12 billion. During this period, export of soybean oil alone accounted for 28 percent of the total export of Rs 80.77 billion of Nepal.
The export of synthetic yarn, which is the second largest export product, declined during the review period and was limited to Rs 5.1 billion. Exports of woollen carpets, carpets, tea, and readymade garments were also among the top export products of Nepal.
Entrepreneurs complained that despite the government's pledge for economic reform, there has been no substantial change in policy.
Entrepreneur Sunil KC, who is also the vice-president of the Confederation of Nepalese Industries, said that domestic production has not been able to increase as the government has not been able to promote production-oriented industries.
He said that exporting goods imported from third countries would benefit the businessmen, but it would not benefit the country. "There are many Nepali goods like apples, honey, herbs, which can be exported after processing in industries," he added.
Economist Shankar Sharma informed that the government should adopt strategies to promote export. "Even if exports of goods including palm/soybean increases the size of exports, it will not improve the country's economy," he said. He said that the government should take initiative to increase the establishment of industries in collaboration with the private sector as the economy would not move in the right direction without industrial development.