Nepal: A smooth transition to developing-country status

13 December 2022
ITC News

Nepalese academics and officials sharpen their skills by using ITC market analysis tools to support Nepal’s upcoming graduation from least-developed-country status

While exploring his country Nepal’s recent trade performance using the International Trade Centre’s (ITC) Trade Map tool, Ramesh Paudel, associate professor at Tribhuvan University, the world’s largest university according to student count, saw encouraging signals across several sectors.

He and 17 other professors, lecturers, and Nepalese government officials were taking part in a training to hone their skills in comparing emerging opportunities using digital trade tools.

According to ITC data, Nepal’s global exports grew in value by 95% between 2020 and 2021, signalling that it is on its way to recovery following the challenging COVD-19 impacted years with particularly strong growth in palm oil, yarns, and carpet exports.  

Moreover, according to ITC estimates, Nepal could benefit from additional export growth of $485 million by 2027. This steadfast growth is supporting Nepal in its advancement towards graduating from least-developed-country (LDC) status by 2026.

Graduating from LDC status will alter market access conditions

Yet, graduation from LDC status will alter some of Nepal’s market access conditions. According to a recent joint ITC-UN OHRLLS study exploring the impacts of Nepalese graduation, the resulting increase in average trade-weighted tariffs will affect 22% of the exports projected for 2026. On average, trade-weighted tariffs will rise from 1% to 2%.

While many sectors will only experience increases smaller than one percentage point, others will see steep rises in the tariffs they face. For example, the vegetable products sector and the cereals and cereal products sector will face increases of 27 percentage points and 25 percentage points in average applied tariffs, respectively.

At the economy level, this could have a dampening effect on exports. The study estimates that Nepalese exports would decrease $59 million in 2026, an estimated total loss of 4% with the greatest losses projected in exports to the European Union, Turkey and China.


Market analysis to empower entrepreneurs

To help ease the transition and empower Nepalese entrepreneurs in identifying and comparing opportunities in new markets, Nepal counts with a new force of experts in trade and market analysis using the International Trade Centre’s tools Trade Map and Market Access Map.

Thanks to an ITC training-of-trainers programme under its Trade and Investment Programme, Nepal now has 18 certified trainers.

Gobinda Bahadur Karkee, Joint Secretary at the Ministry of Industry, Commerce, and Supplies, says: “The need for efficiency and competitiveness in the business chain in fast-paced international trade dynamics is crucial. The workshop is key to enhancing trade capacities with skilled human resources on the international market, as Nepal is graduating from the LDC status. It also sets the ground for spreading the knowledge of market intelligence through participating professors in workplaces in their different capacities including as teachers, researchers, policymakers, and advisers.”

By successfully completing a three-step programme, academics and government professionals are now poised to help Nepalese entrepreneurs adapt their business plans and make robust, data-driven decisions.

The participants shared their plans for implementing training programmes across campuses in Nepal, as well as targeting entrepreneurs and business associations to help act as multipliers throughout the nation.

“As university teachers are vehicles for transferring knowledge, not only through classroom teaching but also through different research activities, I am confident the freshly certified trainers will contribute to developing new batches of experts on international market intelligence,” says Resham Thapa from the Central Department of Economic at Tribhuvan University. “For example, I am planning to apply my knowledge in teaching, trade-related research, and policy support for the Government of Nepal and will try my best to multiply this knowledge.”

Pushpa Ghimire of the Nepalese Ministry of Planning, who knows the ITC market analysis tools from her student days, wants to engage her colleagues to ensure that the tools help shape the upcoming Nepal Trade Integration Strategy and also benefit the business community. “Words fail to express my gratitude for providing such wonderful training,” she says. “Indeed, such training should be provided to start-ups. Similarly, such information should be included in the international trade course at college level.” 


About the EU-Nepal Trade and Investment Programme

This four-year programme funded by the European Union and launched in February 2020, assists the Government of Nepal in achieving sustainable and inclusive economic growth and poverty reduction by increasing trade and participation in regional and global value chains. Implemented by the International Trade Centre (ITC), the project also provides assistance to the sustainable and inclusive development of Nepal’s coffee and pashmina value chains, with a focus on export development.