Nepal’s strengths and weaknesses in international trade

Information

This article was written by Aviyan Khadka. The error in author names is due to migration from Wordpress to Blogger. Thanks

Nepal is a small country between China and India and also has a small economy . It may be a small country but has huge potential as it is between a critical location i.e between two booming economies . Even though it may be in a ideal location it still has may things that may burden its trade potential like poor governance and lack of proper infrastructure . 

Lets look at Nepal's  strengths and weaknesses in international trade :

Strengths

• Easy access to the markets of booming and giant economies
of India and China
• Very rich bio-diversity
• Trade-friendly policy environment: Open General Licence
(OGL) for all current account transactions, lower taxes,
Special Economic Zones, and dry port facilities
• Low labour cost
• Natural beauty

Weaknesses

• Very poor infrastructure: road, power, telecommunication,
airports; messy and crowded custom points
• Transit problems and India-locked: Hassles in Indian ports,
unavailability of bogies to transport merchandise to the
Nepali border, plus various non-tariff barriers
• Poor industrial relations: strikes, lock-outs, road blockages
and shutdowns; lack of security of industrial/trade/business
enterprises
• Frequent policy changes/political instability
• Shallowness or absence of hedging foreign exchange risk and
future markets



Nepal can act as a bridge between india and china trade and also a bride between south asian and north asian countries if there is proper work done . The economic boom that this platform can provide will be enormous for the nepalese people as it will help create thousands of new jobs and life lots of families from poverty . The Nepal government should initiate work with both chinese and indian government to lay the groudwork for the trade route and establish itself as a global competitor.