Though tea and Pashmina hold strong potential to churn in foreign currency through exports, producers and exporters have consistently failed to tap their prospects even in already available international markets due to lack of capacity and inability to mobilize funds to promote their products.
“The trademark of the Nepali Pashmina has been registered in 40 countries all over the world but we neither have capacity nor capital to promote the brand in the international market,” Pushpa Man Shrestha, president of Nepal Pashmina Industries Association, told Republica on Tuesday.
“As a result, we have not been able to take benefit from the trademark,” he added. According to Nepal Rastra Bank (NRB), the country received foreign currency worth Rs 2.63 billion from the export of Pashmina in the first ten months of this fiscal year.
Tea producers too shared a similar story. According to them, in the absence of collection center at home and strong overseas market linkages, farmers and processors largely dump their produces in the Indian market, mostly in Calcutta.
"This deprives Nepali producers from getting due prices for their products, whereas owing to better quality, the Indian firms easily sell our products at handsome prices branding it under their name," a leading tea marketeer said on the condition of anonymity since he has business with Indian importers.
"Some 85 percent of Nepal´s total tea exports is consumed by Indian resellers," he shared with Republica. "We could do far better and earn huge amount of foreign currency if we could explore other markets and establish our brand in third countries including European countries such as Germany and others."
Nepal produces 16.61 million kgs of tea. Of that, more than 8.49 million kgs - that is more than half of the productions - are exported. But owing to weak marketing and lack of direct access to global buyers, only 15 percent of total exports reach the third country markets.
The government has listed both tea and pashmina in the Nepal Trade Integration Strategy (NTIS) 2010 -- a blueprint to boost export -- as they have a comparative edge.
However, traders blamed government´s failure to implement NTIS and develop concrete programs to gain the potential returns from those products for the less than expected level of foreign currency earning by these products. Former Commerce Secretary Purushottam Ojha agreed with the traders.
Given the situation, NPIA has pushed the government to provide it financial support to promote the trademark, Chyangra Pashmina. “We have requested the government to provide us Rs 10 million for the promotional objectives,” said Shrestha.
But experts like Ojha, however, are of view that the government should rather focus on implementing NTIS more committedly, instead of pledging financial support to individual group of producers. "For this, MoCS has long been pushing for additional budget. But government has largely ignored the call," said Commerce Secretary Lal Mani Joshi.
The government had allocated Rs 35 million in 2010/11 for NTIS implementation and Rs 50 million in this fiscal year. Joshi said the ministry has requested for around Rs 120 million for its implementation in the next fiscal year 2012/13.
In the meantime, the Enhanced Integrated Framework (EIF), an initiation of World Trade Organization (WTO), has been supporting export of identified products such as Pashmina and ginger. “There might be some programs coming up in the near future for promotion of pashmina,” a source close to EIF implementation unit at the MoCS stated.