Abstract
This chapter analyses the trends and structure of agricultural trade in general and with India, in particular, and discusses the drivers of recent trends in agricultural trade. It presents the results of Nepal’s trade competitiveness and export potential based on trade data and recommends a number of measures to respond to trade-related issues. The study depicts a high comparative advantage for most of the exported agricultural items from Nepal with almost perfect complementarity in the agricultural export profiles of both India and Nepal. However, Nepal’s export potential in the Indian market is not very encouraging, and in most cases, the binding constraint to trade potential of Nepal is its limited export capacity and not the lack of opportunities in the Indian market.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
Unless otherwise stated explicitly, the words trade, exports and imports used in this chapter refer to agricultural trade, exports and imports. Where the total also includes non-agricultural trade, this is explicitly stated.
- 2.
The NRB publishes trade data by SITC numbers. For this section, agricultural trade is defined as the sum of the SITC numbers 0, 1 and 4, the rest being non-agriculture. The data are for fiscal years (July/June). For ease of presentation, unless otherwise stated, fiscal years are written as single years as follows: 1991 for 1990/91, 1992 for 1991/92 and so on.
- 3.
Unless otherwise stated, all growth rates reported in this section are average annual growth rates, estimated by regressing the logarithms of the variable on time trend using data for all years covered.
- 4.
Unlike with the NRB data used above which were for fiscal years, the TEPC data used in this subsection are for calendar years.
- 5.
The full product description for HS 121190 is “Plants and parts of plants (including seeds and fruits) of a kind used primarily in perfumery in pharmacy or for insecticidal or similar purposes”. This includes a wide range of products, with a typical list being Amala, Atis, Chiraito, Dalchini, Gucchi, Jatamansi, Jhyau, Kutki, Pipla, Ritha, Sugandhawal and Timur. A table in an ITC study shows the following as the top five traded species based on the royalty collected: ritha (Sapindus mukorossi) 34% of total, timur (Zanthoxylum armatum) 22%, lichen (Parmelia sps.) 20%, pawan ko bokra (Persea sps.) 18% and chiraito (Swertia chirayita) 7%.
- 6.
Forest/vegetative products include many items. In 2013, khayaar accounted for 50% of the total, followed by kattha (40%) and rudraksha (4%). Others in small amounts were skin of Argel, soapnut and amriso (broom). In 2012, 98% of the total was khayaar and 2% rudraksha.
- 7.
The RCA is a measure of a country’s relative advantage or disadvantage in a specific industry as evidenced by trade flows and is measured as a ratio of two trade shares. The numerator is the share of a country’s total export of a given commodity (for example, ginger) in that country’s total exports of all goods. The denominator is the share of the total world export of the same commodity (that is, ginger) in total world exports. For a product to possess global comparative advantage, the RCA value should exceed one.
Abbreviations
- ADS:
-
Agricultural Development Strategy (Nepal)
- ATF:
-
Agreement on Trade Facilitation (WTO)
- CBS:
-
Central Bureau of Statistics (Nepal)
- CIF:
-
Cost Insurance and Freight
- CoO:
-
Country of origin
- CTH:
-
Change in tariff heading
- FoB:
-
Free on Board
- GNDI:
-
Gross National Disposable Income
- GoI:
-
Government of India
- GoN:
-
Government of Nepal
- HS:
-
Harmonized System
- ICBT:
-
Informal Cross-border Trade
- IGC:
-
Intergovernmental Committee (SAFTA)
- IGSC:
-
Intergovernmental Subcommittee (SAFTA)
- ITP:
-
Indicative Trade Potential
- LDC:
-
Least-developed country
- MoAD:
-
Ministry of Agricultural Development
- MoCS:
-
Ministry of Commerce and Supplies
- MRA:
-
Mutual Recognition Agreements
- MT:
-
Metric ton
- NLSS:
-
Nepal Living Standards Survey
- NOM:
-
Non-originating materials
- NRB:
-
Nepal Rastra Bank
- NTB:
-
Non-tariff barrier
- NTIS:
-
Nepal Trade Integration Strategy
- NTM:
-
Non-tariff measure
- p.a.:
-
Per annum
- PTM:
-
Para-tariff measure
- RCA:
-
Revealed Comparative Advantage
- RoO:
-
Rules of origin
- RoW:
-
Rest of the world
- SAARC:
-
South Asian Association for Regional Cooperation
- SAFTA:
-
South Asian Free Trade Area (SAFTA)
- SARSO:
-
South Asian Regional Standards Organization
- SL:
-
Sensitive list
- SPS:
-
Sanitary and Phytosanitary (WTO)
- TBT:
-
Technical Barriers to Trade (WTO)
- TCI:
-
Trade Complementarity Index
- TEPC:
-
Trade and Export Promotion Centre (Nepal)
- TLP:
-
Tariff Liberalization Program (SAFTA)
- $:
-
US dollar
References
CBS. (2014). Development of manufacturing industries in Nepal: Current state and future challenges. Kathmandu: CBS. http://cbs.gov.np/image/data/Manufacturing/Development%20of%20Manufacturing%20Industries%20in%20Nepal,%202014/Devlopment-of-manufacturing-industries-in-Nepal.pdf.
GoN. (2015). Trade Policy 2015, Ministry of Commerce and Supplies. Government of Nepal.
GoN/ADS. (2015). Agriculture development strategy: 2015–203. Ministry of Agricultural Development, Government of Nepal. Kathmandu, Nepal. http://www.moad.gov.np/en/.
GoN/NTIS. (2010). Nepal trade integration strategy 2010—Executive summary and action matrix, Ministry of Commerce and Supplies, Government of Nepal. Kathmandu. http://www.mocs.gov.np/uploads/NTIS%202010%20exe%20sum%20160610.pdf.
GoN/NTIS. (2016). Nepal trade integration strategy: Executive summary and action matrix. Kathmandu: Government of Nepal, Ministry of Commerce. www.moc.gov.np/uploads/Strategy/NTIS%202016.pdf.
Islam, Md. R. (2010). Constraints of the agreement on South Asian free trade area and SAARC agreement on trade in services militating against sub-regional trade proliferation in South Asia. Brigham Young University International Law and Management Review, 7(1), Article 2.http://digitalcommons.law.byu.edu/ilmr/vol7/iss1/2.
Karmacharya, B. (2010). A study on cross-border informal trade between Nepal and India on selected agricultural commodities. Study commissioned by FAO. Kathmandu: NCDR (National Council for Development Research).
Ratna, R. S., & Sidhu, G. (2007). Making SAFTA a success: The role of India. Paper prepared for CUTS International, Jaipur. www.cuts-citee.org/pdf/RREPORT08-AP-03.pdf.
Sharma, R. (2017). The scale and drivers of informal trade in agricultural products across the Nepal–India borders. Paper prepared for the SAARC Agricultural Trade Forum, Organized by SAARC Agriculture Centre and FAO, May 22–23, 2017, Dhaka, Bangladesh.
Sharma, P., & Shrestha, N. (2011). Promoting exports of medicinal and aromatic plants (Maps) and essential oils from Nepal. Study for WTO/EIF Support Programme. Kathmandu: SAWTEE. http://www.sawtee.org/Research_Reports/R2011-04.pdf.
Sharma, B. P., Adhikari, S. R., Bhusal, T. P., Pande, B., Bhattarai, K., Adhikari, D. B., & Dahal, A. R. (2014). An assessment of export barriers of Nepalese products to India. Study commissioned by Research Department Nepal Rastra Bank. Department of Economics, Patan Multiple Campus, Tribhuvan University.
Sharma, R., Kumar, A., & Joshi, P. K. (2017). Nepal–India agricultural trade: Trends, issues, and Prospects. Policy Reform Initiative Project (PRIP)-Nepal Report 3, IFPRI.
WEF. (2012). The global enabling trade report 2012: Reducing supply chain barriers. World Economic Forum. http://www3.weforum.org/docs/GETR/2012/GlobalEnablingTrade_Report.pdf.
WTO. (2012). Trade policy review: Nepal—Report by Nepal. https://www.wto.org/english/tratop_e/tpr_e/tp357_e.htm.
WTO. (2015). Trade policy review: India—Report by the Secretariat. https://www.wto.org/english/tratop_e/tpr_e/s313_e.pdf.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Sharma, R. (2019). Trends, Structure and Drivers of Nepal’s Agricultural Trade. In: Thapa, G., Kumar, A., Joshi, P. (eds) Agricultural Transformation in Nepal. Springer, Singapore. https://doi.org/10.1007/978-981-32-9648-0_15
Download citation
DOI: https://doi.org/10.1007/978-981-32-9648-0_15
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-32-9647-3
Online ISBN: 978-981-32-9648-0
eBook Packages: Economics and FinanceEconomics and Finance (R0)