Iron and steel products top Nepal’s export charts

March 1, 2014
Nepal earned Rs 6.26 billion amount in the first half of the current fiscal year from the largest export of Iron and steel products.
According to the Trade and Export Promotion Center (TEPC), exports of iron and steel products expanded 5.6 percent compared to the same fiscal year of last year. In the first half of 2012-13, Nepal exported iron and steel product worth Rs 5.94 billion and this year it is Rs 6.26 billion (Rs 6.26- Rs 5.94= 0.32 billion).
Raw materials are imported from foreign countries but the foreign demands are increasing due to cheaper and superior quality of Nepali Iron and steels than other countries. Apart from abroad markets, Nepali iron and steel products have a sizable following in the domestic market too.

The domestic market consumes iron and steel products worth around Rs 20 billion. “Compared to foreign products, Nepali products are cheaper and durable. This is why exports have increased and according to the entrepreneurs, India is the main market for products made of iron and steel.
Another reason for increasing the demand for iron and steel products in the international market as the construction sector is booming and our price is much lower than what the country could do.
According to central bank of Nepal, Nepal Rastra Bank, the country’s iron and steel industry has been running at 66.55 percent of capacity as of the last fiscal year and it is due to the energy crisis and there is lack of competent human resources in this sector. The iron and steel industry could earn more and export could be much higher if the government sector addressed the issues of the sector they need to boost the morale of the producers by providing appropriate incentives and facilities.
Compared to last year, prices of iron and steel products have expanded around 5 percent in the domestic market, and it could be the main reason behind the growth in the monetary value of exports. In terms of quantity, the figure hasn’t raised much and the iron pipes and steel were the most popular export items and that no new product had succeeded in surpassing them. In 2010, the government of Nepal had launched the Nepal Trade Integration Strategy (NTIS) and identified iron and steel products among 13 products as exportable items having comparative advantage. The government has set a target to expand exports of the products considered to be export-oriented or identified as having relative advantage to Rs 1 billion each.
Though the targets were not fulfilled last year, four goods out of six crossed the annual target within the first six months this fiscal year. Apart from iron and steel products, exports of cardamom have reached Rs 2 billion, posting an increment of 9 percent year on year. According to the TEPC, Rs 1.19 billion worth tea and Rs 1.20 billion worth Pashmina were exported in the first half of the current fiscal.
In recent year, trade deficit of Nepal is widening continuously and government of Nepal should support such sectors, which has the potentiality to export the product. Meanwhile, the failure to meet the target last year has prompted the government to revise the list of goods considered to have comparative advantage. The main obstacles in such industry are the lack of efficient human resource and concerned authorities should think about the supply of such human resource.