TRADE, INDUSTRY POLICY (Nepal)

TRADE, INDUSTRY POLICY (Nepal) 

A. TRADE POLICY

• Public sector works as a catalyst and facilitator to expand the role of private sector. 

• No Licenses required for exports and import of any products other than banned or 

Quantitatively restricted items, Banned and quantitatively restricted items. 

• The duty drawback scheme available for the refund of import duty paid on imported 

Raw materials and intermediate goods required for the production of exportable 

Products. 

• Export Promotion Zone (EPZ) and Special Economic Zone (SEZ) are being 

Established in different location. 

• No Duty levied on raw materials and auxiliaries imported by industries in EPZ./SEZ 

• Foreign currency required for import will be made available by the commercial banks 

at the market rate. 

• Exporters allowed retaining their export earnings in their own foreign currency 

account.

• No quantitative restrictions on the exportable products carried by tourists while 

Returning from Nepal. 

IMPORT

1. Almost all goods are in OGL 

2. The customs value is calculated on CIF basis (Cost Insurance and Freight) on import. 

3. Nepal has adopted General Agreement on Tariff and Trade (GATT) valuation system 

4. Principle of lower rate of customs duty on the import of raw materials compared to 

Finished goods are in use. 

5. Prevailing custom duty rates are 80%, 30%, 20 %, 15%, 10%, 5%.and 0 % . 

 6. Goods imported from India into Nepal are granted a rebate in the chargeable (except specific) rate of customs duty by 5% ad-volorem duty in above than 30 percent 

custom duty and 7 % below than 30 percent . 

7. Goods produced in China and imported from Tibet are granted a rebate in the 

chargeable advalorem (except specific) rate of customs duty by 4%. 

8. The ASYCUDA system is in use at seven major custom points and plan to add in two 

major points. 

FEES ON IMPORT

1. Agriculture Development fee of 5% is levied on import value on imported agricultural 

Goods. 

2. NRs.600 as customs service fee is charged per custom declaration form on export and 

Rs 500 on import at custom point 

EXPORT

1. Export is generally free of custom duty. 

2. Custom duty on export is levied on the basis of FOB price determined by calculating the 

Cost incurred including in transporting the goods up to custom point when exporting the 

Goods. 

3. No licensees required for exports of any product other than banned or quantitatively 

Restricted items 

4. Generalized System of Preferences (GSP) is available to Nepal's export as a Least 

Developed Country. 

B. INDUSTRIAL POLICY

INDUSTRIES REQUIRING PERMISSION

Industries producing explosives including arms, ammunition and gunpowder, security 

Printing, bank notes and coin industries. 

ü  Cigarettes, bidi, cigar, chewing tobacco, khaini industries and industries producing goods of a similar nature utilizing tobacco as the basic raw material and alcohol or beer 

             Producing industries. 

C. INCENTIVES AND FACILITIES

• After an industry comes into operation, 10 percent of the gross profit shall be allowed 

as a deduction against taxable income on account of expenses related with 

technology, product development and efficiency improvement.  

• If any other industry utilizes locally available raw materials, chemicals and packing 

materials, etc. on which excise duty is already imposed, the excise duty shall be 

reimbursed to the industry utilizing such raw materials chemicals and packing 

materials. The amount to be so reimbursed shall be refunded within sixty days after 

an application to that effect has been duly submitted. 

• The customs duty & excise duty on raw materials and auxiliary raw materials, etc. 

utilized by any industry in connection with its product during its production shall be 

reimbursed on the basis of the quantity of the export. 

• Any industry sells its products in the Export Promotion House, the customs duties 

levied on the raw materials imported for producing the products and the excise duty 

levied on the products shall be reimbursed for concerned industry on the basis of the 

quantity of sale and export. 

• If an industry sells its product within the country in any foreign currency, the excise 

duty and custom duty on such product and customs duty, excise duty levied on the 

raw materials and auxiliary raw materials, etc. utilized in such product shall be 

reimbursed. 

• The customs duties and excise duty on the production materials of intermediate 

goods to be utilized for the production of exportable industrial goods and excise duty 

levied on the product shall be reimbursed to the concerned industry producing the 

intermediate goods, on the basis of the quantity of export. 

• If an industry producing intermediate goods sells its products to any other industry 

producing finished goods, the custom duty and excise duty to be levied on such 

products will be allowed to be adjusted on the basis of the quantity utilized by the 

industry producing the finished goods. 

• No royalty shall be imposed if any industry generates electricity for its use. 


Source : FNCCI