Group E:Ojaswi BaidyaPallabi Sinha

Sarashree DhunganaShradha Khanal

Nepal’s Trade Policy and Export & Import Procedures

Foreign Trade

Trade Policy 1961 of Nepal made provisions for Export Exchange Entitlement (EEE) scheme and export diversification and import substitution strategies were opted

Refined Trade Policy 1977 with a duel exchange rate system

New Trade Policy 1983 made effective with additional provisions

A more liberal trade policy 1992 introduced

Trade Policy 1992

Introduced with the objectives of 1. Promoting internal and external trades

2. Encouraging private sector’s participation

3. Diversifying trade in terms of both commodities and markets

4. Strengthening backward linkages

5. Expanding employment oriented trades

6. Reducing trade imbalances

Nepal-India Trade Treaty (1991)

Supported a positive response and speedy trade growths with India during 1990s

Considering the sensitivity of trade relations with India, policy makers in Nepal always poked there noses on some critical aspects which include:Geo-physical forcesTrade Policy forcesLabor forcesFinancial forcesTrading forcesCompetitive forcesProtection of welfare of the citizens through proper support to

Poverty Reduction StrategyFull commitment made to regional and multilateral trading system

Foreign Trade Policy 2009

Considered the norms and practices of World Trade Organization as well as other regional trade agreements under SAARC and BIMSTEC

Special emphasis to all four modes of service trades including tourism, education and health

High priority given to Special Economic Zone (SEZ) to operate all commercial activities including manufacturing of goods that are subject to free of all tariffs, duties and taxes

Tariffs

Import Tariffs1. Highest rates (40% - 80%) in luxuries

2. High rates (25% - 40%) on clothing and finished goods

3. Lower rates (15% - 25%) on prepared and preserved food and construction materials

4. Lowest rates (0 – 10%) on basic food, industrial inputs, machineries and fertilizers

During the past 15 years import tariffs have been substantially reduced

Continued….

Preferential TariffZero tariff on imports from India and Tibet1% tariff on imports of agricultural inputsNepal provides tariff concessions on items subjected to

MFN (Most Preferred Nation) tariffs.MFNs: India, Tibet, members of SAFTA

Export Tariffs and FeesTariffs based on ad valorem

• tax based on the value of real estate or personal property

Continued….

Other Duties and Charges (ODC)Levied on imports for revenue generation producers’

protection purposeGradual reduction of all ODC phasing out every two

years and finally make it zero by end of the year 2013

Trade Procedures

Register at1. A proprietorship firm under the Private Firm Registration

Act 19562. A Partnership Firm Act 19643. Public/Private company under the Company Act 19974. An Agency under the Nepal Agency Act 1958

Register with the Inland Revenue Office (IRO) to receive Permanent Account Number (PAN) and also open VAT account

Proceeds forward to open bank account and get fully ready to commence its business

Export Procedures

Talks about what procedures we must follow in order to export goods from Nepal

After a firm is established it should get registered with the IRO to get a PAN

Opening a bank account in order to have transactions with foreign customers

Different documents and procedures for different products and transportation.

In context of Nepal, for international can be done through 4 routes.

1.Air transport from TIA

2.Sea transport from India and Bangladesh

3.Direct export to India by land border crossing

4.Direct export to Tibet by land routes

1st REGISTRATION

CONTACTS/SUPPORTING OFFICES:

• Chamber of commerce• Department of commerce• Company registrar’s office

DOCUMENTS REQUIRED:

• Citizenship certificate• Photographs• Recommendation letter from COC• Partnership agreement• MOA• AOA• Business scheme or plan

2nd OBTAIN PERMANENT ACCOUNT NUMBER

CONTACTS/SUPPORTING OFFICES:Inland Revenue Office (IRO)

DOCUMENTS REQUIRED:Copies of all above documentsCopy of registration certificateIntroduction letter of business and persons

involved

3rd MANAGEMENT

CONTACTS/SUPPORTING OFFICES:Commercial BanksYour Office

DOCUMENTS REQUIRED:Application to the bank with a photocopy of

decision of the Board of director in case of a Company

Copies of all registration certificates

4th ESTABLISH RELATIONSHIP WITH IMPORTERS

Identification and selection of the most potential exportable products Identification of target markets Send pro-forma invoice to buyer Arrange production or procurement of goods/services

CONTACTS/SUPPORTING OFFICES:

Trade and Export Promotion Center Federation of Handicraft Association of Nepal Chamber of Commerce

DOCUMENTS REQUIRED:

Consult previous export history Refer trade statistics of other countries Analysis of rate of import growth and volume of exports

5th PREPARE DOCUMENTSrequired for all products

Prepare invoice yourself

CONTACTS/SUPPORTING OFFICES:Commercial banksTrade and export promotion centerFederation of Nepalese Chambers of Commerce

and IndustriesLocal Chamber of CommerceInsurance companies

DOCUMENTS REQUIRED: Invoice Letter of credit Certificate of Origin GSP certificate Business registration certificate PAN registration certificate Letter of Authority Customers Declaration Forms Foreign Exchange Control Declaration Forms Customs Transit Declaration Form Insurance policy

6th PREPARE DOCUMENTSrequired depending on the type of product

EXPORT PROCEDURES: Documents required depending on the type of product

CONTACTS/SUPPORTING OFFICES: FHAN or any other product association provide separate certificate Curio Pass Office of the Archaeological Department Customs Office Freight Forwarders ECON or GAN Department of Agriculture Department Plant Resources

DOCUMENTS REQUIRED:Invoice certificate of concernCurio pass certificates- metal products, artistic jewelleries,

pauvas, thankas, wood carvings, etcBonded warehouse certificateDouble or multiple country declarationValue added certificate for jewellery in format prescribed by

Nepal Rastra Bank applicable for jewelleries. no objection letter for domestic animal and productLetter of permission to customs

7th FREIGHT FORWARDING

EXPORT PROCEDURES:Submit prepared documents along with cargoes to

the customs office directly of through a forwarding agent. Export charge, Rs. 500/consignment

CONTACTS/SUPPORTING OFFICES:Customs office- Mechi, Birathnagar, Birgunj,

Sidharthnagar, Nepalgunj, Dhangadi and Kathmandu airport (TIA)

8th MAKE TRANSPORT ARRANGEMENTS

EXPORT PROCEDURES:Get certified Customs Declaration Form, COO,

GPS Form ‘A’ and other documents and hand them over to shipping agencies who will provide Airway bill, Bill of Landing or Railway Receipt

CONTACTS/SUPPORTING OFFICES:Freight Forwarder or Forwarding Agency with the

help of transport agencies

DOCUMENTS REQUIRED:Master Airway Bill – MABHouse Airway Bill – HABMaster Bill of Lading – MBLBill of Lading - B/LRoad consignment Note – C/NHanding-over Certificate

9th INTIMATE IMPORTER

You must be in communicated and in good terms with your foreign customer so as for the business to go smoothly.

Prepare to forward necessary documents.

10th FINAL PAYMENT

EXPORT PROCEDURES:Submit relevant documents to the bank for

negotiation or final payment.When you send your product, the importer should

send an LC to the bank. The bank will pay you the amount when the goods reach its destination.

DOCUMENTS REQUIRED:Customs Declaration FormInvoice and Packing listGPS or COONepal Rastra Bank FormOther negotiations forms of the bank

Import Procedures

Import of all products other than banned or quantitatively restricted items stated below are permitted without license under Open General License (OGL) systema) Products injurious to healthb) Arms and ammunition and explosive materialsc) Communication equipmentd) Valuable metals and jewelriese) Beef and beef products

Imports are normally grouped into three sources: India, Tibet and Third countries

Continued….

Import from IndiaImport from Tibet, Autonomous Region of Public

Republic of ChinaImport from Third Countries

Thank You