Carpet slump dents Nepal’s China exports
Summary
Nepal’s exports to China have drastically fallen by 41.71% mainly due to a slump in carpet exports, exposing challenges in competing with China despite growth in exports to India. Efforts are underway to boost buffalo meat exports to China as a new trade opportunity.
Key Points
- Nepal’s exports to China decreased by 41.71% year-on-year mainly due to a 75.63% drop in carpet exports.
- Exports to India grew by 16% driven largely by edible oil re-exports under trade agreements like SAFTA.
- Rising costs, VAT on carpets and raw materials, labor shortages, and competition from cheaper machine-made carpets reduced Nepal’s export competitiveness in China.
- Challenges include non-tariff barriers, limited production, disrupted trade routes, and weak financial and negotiation capacities.
- New prospects include large-scale buffalo meat exports to China, expected to attract Rs27 billion investment and potentially generate $1.5 billion annually.
