CHAPTER 1

INTRODUCTION
1.1 Foreign Trade: Introduction & Overview

Foreign Trade is also called international trade. It deals mainly with transaction of goods among the people of different nation of the world. Foreign trade is the business activities of exachanging goods & services among citizens of various independent nations. Foreign trade is also the performance of import & export of a country with the rest of the world.The purchase of goods & services by citizen of one country from the citizen of another country is called international tradeprof.Dudley G Luckett The goods & services sold to foreign countries is known as import trade whereas goods & services bought by citizen of a country to be sold in other countries is entrepot trade. Generally ,on the export side each country forwards its low priced goods & services or those commodities in which the country is efficient of production to a foreign country .Whereas, those goods & services which can be acquired at lower prices abroad than at home will imported by each country . All counties are not equally efficient in the production of the things they need, so foreign trade occured. The reason for this may be due to unequal distribution of natural resources of differences in geographical situation among them & imperfect substitutability of factor of production available with them. Therefore,the most nations of yhe world export some goods services & factors of production in exchange for imports which could only be supplied relatively less efficiently at home or not at all,( for eg.coffeein US .petroleum in Germany).The economic well being world trade has grown fast due to globalization & innovation of technology. Countries who involve in foreign trade helps to develop economic condition countries with a big volume of foreign trade can raise their living standard,income level ,generate employment number.Beside trading needs good relationship with the foreign countries is also maintained.Foreign trade is the path for the of every nations. The role of foreign trade in economic development has been summarized as below: Advantage of specialization Technological progress through copy from advanced nation Importation of technological know how Access to Raw materials Exapansion of market
1

Rise employment & income level Efficiency & competition product development through

Attraction of foreign investment

The main objective of every country to get involve in foreign trade is to accelerate its economic development.A country can earn foreign exchange only through trade. 1.2 Objectives of the study This report has been prepared to meet the following objectives. To analysis the present trend of international trade of Nepal. To get a general idea about export procedure from Nepal. To analyze the trend of the pashmina export of Nepal. To analyze contribution of pashmina in total export of Nepal.

1.1

Methodology

The present report writing is based on the information,statistics,journals, report published by different organization, govt.& non govt.organization & web browsing of the relevant sources like trade & export Promotion centre ,NRB,Ministry if finance of Nepal ,Ministry of Industry, commerce of& supplies of Nepal,Nepal Pashmina Association, Handicraft Association of Nepal, Federation of Nepalese Chamber of Commerce & Industry. 1.2 Limitation

The major limitation faced while preparing this report are as follows:

The study covers pashmina upto FY 2009/10 only. The whole study of pashmina product deals with market of export countries rather than the domestic sales . The report concentrates only to the export part of the foreign trade of Nepal.

CHAPTER -2
PRESENTATION & ANALYSIS OF DATA
2.1 History of Nepals Foreign Trade Nepal has signed trade agreement with 17 countries so far.Among them it has bilateral trade agreement s with five SAARC(South Asian Association For Regional Cooperation)nations namely Bangladesh ,Bhutan,India ,Pakistan& Sri-Lanka.The SAARC is a regional grouping formed in 1985 by the seven south Asian nations where Nepal and Maldives also included.Among all the SAARC nations Nepal ties with India in economy & trade in the traditional one. Traditionally trade between Nepal & India was conducted by private sector businessman without any formal trade treaty.In 1791 the East India company proposed trade with Nepal officially & that never came in begin. At the government level trade between the two countries are established only in 1923. After the termination of the 1923 treaty two countries signed a new trade & commerce treaty ,the two countries signed a new trade & commerce treaty in 1950 & transit treaty which expired in 1970. After a gap of one year, a new treaty between the two countries was signed on august 13.1971 in Kathamandu.The 1971 trade & transit treaty terminated on 15 august 1976 & on march 17.1978 the two countries signed separate treaties on trade & transit in New Delhi which came into effect from march 25.1971 for a five year period. The major export destination in 2000/01 was India 48% the united states 26% & Germany 11% Export to the united states consists mainly of apparel including pashmina product, whereas exports to Germany are dominated by woolen carpets .In the wake of 2009/10 ,export to the United states declined 15% in 2001/02 the IMF estimates that export to the other countries ,India declined more than 40% due to the combination of external slowdown & internal supply disruptions.The total trade balance of Nepal from FY 2005/06 to FY 2009/10 is tabulated in table 1. Table 1 Total trade balance of Nepal from FY 2005/06 to FY 2009/10. FY 2005/06 2006/07 2007/08 2008/09 2009/10 Import 160.68 195.81 237.03 291.00 375.61 Export 59.78 58.93 58.47 68.00 60.95 Balance (Billion) (100.90) (136.88) (178.56) (222.40) (314.66)

Source : NRB
3

The total trade balance of Nepal from FY 2005/06 to FY 2009/10 is illustrated in the diagram 1.
Total Trade Balance of Nepal
500 400 Amount in Billion 300 200 100 0 -100 -200 -300 -400 Fiscal Year 2005/06 2006/07 2007/08 2008/09 2009/10 Import Export Balance

Nepal's Trade with India from FY 2005/06 to FY 2009/10 is tabulated below : Amt in Billion FY 2005/06 2006/07 2007/08 2008/09 2009/10 Import 107.1 115.9 142.4 165.1 214.3 Export 40.7 41.7 38.6 43.6 39.9 Balance -66.4 -74.1 -103.8 -121.5 -174.4

Nepal's trade with India from FY 2005/06 to FY 2009/10 is illustrated in diagram 2.

Nepal Trade With India
250 200 Amount in Billion 150 100 50 0 -50 -100 -150 -200 Fiscal Year 2005/06 2006/07 2007/08 2008/09 2009/10 Import Export Balance

2.2

Some major exports & imports from Nepal.

Some of the commodities exported from Nepal to the different destination of the world are : Carpet Readymade garments Lentils (Pulses) Handicrafts woolen & Pashmina shawl Mufflers Veils Jute Floricultural product Essential oil Coffee Katehu Spices Thankas Agricultural products Knotted of Wool or fine animal hair Hides & skins Cardamom (Large) TSilver Jewellery Scarves Mantillas Nepalese paper & paper Vegetable ghee Medicinal herbs Tea Honey Silk & silk products Textiles Polyester yarn Equipments

Noodles

The major import items from India, China, Singapore, Japan & Hong Kong are listed below : Gold Aluminum Fiber Iron Electrical goods Raw materials Soya bean Edible oil Yarn plastic Lubricants Flaps construction materials Fertilizers Agricultural tools Computer parts Shoes Silver Polyester Cotton Billet Industrial chemicals Books Petroleum product Granular Unprocessed wool Tyres Aircraft spare parts Transportation equipment insecticides Comptual tools Cosmetics Slipper

Nepalese commodities are exported to the following international destinations: India, USA, Germany, UK, France, Italy, Canada, Japan, Bangladesh, Spain, China, Switzerland, Bhutan, Netherlands, Australia, Norway, Korea, Singapore, Turkey, Austria, UAE, Pakistan, Denmark, Sweden, Taiwan, Czech Republic, Malaysia, Russia, Thailand, Mexico, Portugal, Belgium, Greece, new Zealand. 2.3 Export procedure

The procedure for the export of goods from Nepal has been summarized below: 2.3.1 Inquiry & offer

First step in the export procedures in an export firm should get an inquiry of a prospective buyer abroad & make an offer of a proposal tot he customer. Information
6

about prospective foreign buyers and appropriate markets are available from the trade promotion organization like trade promotion centre, Nepal chamber of commerce, product association and trade directories. These sources provides information about foreign market environment, trade statistics, market access, competition, price & quality exportable items required in international market. On the basis of the collected information, an export firm can build contacts with importers abroad through correspondence while writing to the foreign buyers in the beginning exporter should introduce its firm and products to be exported. An importer may ask for an inquiry about terms and conditions of sale, details of goods, their description, catalogue & other general information including time & system of delivery & term of payment if not included in the initial letter. Inquiry can be exchanged through the medium of telegrams, cables or telefax. After the inquiries are made between the two parties, by using the media mentioned above, an exporter should make an offer to the foreign party as starting point. The 'offer' is a proposal in which an exporter submits may be in the form of letter, his quotation & other relevant information. The offer made by an exporter is usually presented through "proforma invoice." It includes information on products to be exported, their qualities, quantities value & other details like freight, insurance, method of payments etc. It also includes prices of the products mentioned as FOB, C&F, CIF etc. Such type of invoice should be sent to the buyer in advance & the buyer opens a letter of credit (LC) on the basis of this form. 2.3.2 Confirmation of order

Once the offer made by the exporter is accepted by the buyer, the exporter should confirm the order through the exchange of proforma invoice, signed by the two parties. This will be followed by the opening of LC by the buyer ad its commitment. Only after that the order becomes confirmed & the exporter can apply for export license only if required. The government does not issue license for products which are prohibited for exporting. 2.3.3 Production of goods

After the order has been confirmed an exporter should arrange for production of the goods as required by the order. If an exporter is not a manufacturer it should make arrangements for the goods required for export from other supplies. export consignment also require a good packaging system which should be done as required by the buyer if they have given instruction for that. For export, the goods should be carefully packed depending on the nature of the products, their shape, size & weight, quality, destination & mode of shipment. The consignment should be marked with the name of the consignee, the port of destination, measurement, the country of origin & the other matters as specified by the importer. 2.3.4 Shipping of goods

After pre-shipment inspection, the goods are ready for export shipping. Then, the consignment can be forwarded through any of the means available for sea, air or land transportation. The method of shipment will be mentioned in the terms of the sale contract. In the meantime, an exporter or its forwarding agent has to prepare various export document required at different places & exchange them among concerned parties. When all the documents are completed & the consignment packed, it is to be cleared by customs. 2.3.5 Payments

After the consignments have been forwarded, the next procedure is obtaining the payment from the foreign buyers by presenting the required documents to the authorized commercial bank, with which both the parities have negotiated for the financial transactions between them. The documents which have to be presented in the bank for colleting the payments include LC, commercial invoice, certificate of origin, CTD certificate, packing & weight list, foreign exchange earning certificate, insurance policy and export contract form. The negotiating bank will examine export documents. After that the bank will forward all the documents to the importers bank to collect payments from the buyers abroad. 2.3.6 Export incentives

In some cases, the government provides export incentives in various forms such as facilities for enchanting the exports. If the exported items fall under the export incentives list the exporter can claim with the government for it. This process should be conducted only after the export earning are received at the bank from abroad. 2.4 Transit procedure

The transit procedure for the export of good from Nepal has been summarized below : 2.4.1 Certificate of export

As the export of specific products like readymade garments take place regularly in sizable lots requiring timely delivery, uniform quality tailoring, overseas buyer tender to either permanently station their own staff in Nepal or send exports from India to inspect quality whenever shipment are ready for export. The LC specifically provides for the production of quality certificate from a nominated agency/person in garment products. 2.4.2 Certificate of origin

There are two private sector association called FNCC & NCCC which issue certificate of origin (COO) required by Nepalese customs on all export. 2.4.3 FNCCI

A seven copy set of COO (Anex 17) is printed & issued at a cost of NPR 5 per set. then a charge of 12 paisa per NPR 100 (0.12%) of FOB invoice value is levied at the
8

time of putting stamp & signature on COO when it is filled by an exporter. An exporter need to aply with an invoice &L/C copy to verify the value of goods by the concerned district chamber of commerce to obtain the COO. FNCCI also arranges issuance of COO for export to SAPTA member countries under the similar arrangement of certificate of charges. The format as specified by SAPTA agreement is very similar to GSP form. The colour of COO used for export to SAPTA countries is different from that used for overseas export. NCC-NCC has been issuing its own COO (Annex 18) for a long time in Kathmandu. An exporter is required to submit following documents to obtain COO from NCC.

Invoice Payment certificate (LC or advance payment) Archeological & valuation of certificate for handicrafts. Other certificates like phytosanitary, royalty payment for herb etc where applicable.

NCC takes charge of NPR 4 per set at time of issuing & 12 paisa (0.12%) per NPR 100 of invoice value at time of certifying the COO. IF FOB value is declared then the charge will be based on FOB value. NCC also issues COO for export to India for prefential market access as per the format prescribed by the treaty of trade with India. it is issued against a charge of NPR 3 per set. Then for certificate a fixed rate of NPR 11 per consignment is charged for the exporter. 2.4.4 Letter of recommendation for export visa for readymade garments.

Government of Nepal has constituted a readymade garments export promotion committee under the chairmanship of commerce secretary and represented by various public & private sector organizations to frame visa issue procedures including documentation & inspection. In this respect GAN provides various services as explained in paragraphs below/ The EU allows under the GSP rules of origin, tariff preference on readymade garments manufactured in Nepal from woven fabrics or yarn originating in an ASEAN member country (except Myanmar), SAARC or Lome convention country, an imported into Nepal for manufacturing garments. For exporting to EU market, exporters need to apply to GAN in a covering letter by enclosing the following documents : Invoice Documents to prove manufacture in Nepal. COO issued in the country from where the fabrics were imported L/C copy Packing list (required normally for large quantity exports)

After receiving the application, an inspection team of GAN is sent to the applicant's factory to verify the garment products. Thereafter, GAN issues a letter of recommendation on the strength of which the customs makes endorsement by putting its stamp & signature on GSP form A at the time of export. For export to the USA & Canada where quota has been fixed for specific categories of garments, GAN is required to issue a recommendation letter to the RGVC of national productivity & economic development centre limited (NPEDC). A visa is required on all readymade garments exported to the USA whether a quota has been fixed or not except for garments made of 100 percent silk or woolen garments. The visa, which is also called special customs invoice is issued by the RCVC in the format approved by the US government. Exporters intending to export garments under quota to Canada or the USA need to apply to GAN with the following documents :

Application in specified format Invoice Documents to prove manufacturing in Nepal Copy of certification by the concerned customs along with swatches L/C copy Customs export declaration for previous exports A copy of fabrics conjunction form which is prepared for submission the customs

to

On receiving the documents, GAN may or may not inspect the factory of the applicant depending upon the credits status of the applicant. Then a letter of recommendation is issued in printed or computerized format in the name of RGVC & handed over to the applicant. However, such inspection is not required for the issue of a visa for exporting to Canada GAN levies following charges for issuing recommendation letters to the customs for certifying GSP form on garment exports to EU and to RGVC for issuing visa on garment exports to the USA and Canada.

20 paisa per piece for all types of tailored garments exported on piece basis 10 paisa per piece for knitted garments 20 paisa per kg for all garments exported on weight basis

For the USA categories numbers 363 (cotton terry towel) and 369-S (cotton shop towel) as well as for non-quota category number 369-0 (other types of cotton towel like dust towel) there is an another agency called NCTEA that issues a recommendation letter to the RGVC by following almost the same procedures and
10

documentation as applied by GAN. An exporter needs to apply to NCTEA with the following documents :

Application in specified format, Income tax certificate/PAN, Industry registration certificate, Documents to prove manufacture in Nepal, Customs declarations showing previous export, required for second time exporter, L/C, Invoice

After verification of the documents, NCTEA issues a letter of recommendation to RGVC for the issuance of a visa to the applicant against a fee of 20 paisa per kg. of the two copies of the recommendation letter, one copy is handed over to the applicant for submission to RGVC and one copy is kept for official record. Exporters of garments and towel to the USA and Canada apply for visa to RGVC of NPEDC with the following document :

Application in s specified format, Letter of recommendation of GAN or NCTEA, Invoice copy, L/C copy, Copy of the customs export declaration as evidence of previous shipments, Certificate of inspection, if GAN or NCTEA has inspected the factory.

After the documents are verified, RGVC issues four copies of visa form certified with a visa number stamp and authorized signature. Teh form is entitled special customs invoice. The four copies of the set are used as follows :

White copy to the exporter for transmission to the buyer, White copy retained for RGVC records, yellow copy to the exporter surrendering to customs, Blue copy to the exporter for records.

for

For the issuance of visa, RGVC makes a charge of 0.2% of the invoice value an all garment exports to the USA and Canada. Overseas buyers require the original visa for releasing the consignments from their customs; it is not endorsed by Nepal customs; the visa remains valid for only five days and the exporter must ship consignments within that time. 2.4.5 Additional documents for the export of readymade garments.

For the export of garments to the US market additional documents prepared by the exporters are as follows.
11

2.4.6

SCI MCD Beneficiary statement (BS) Valuation certificates for handicraft product Valuation certificate for handicrafts certification for handicrafts from domestic animal none leather and horn. Valuation certificate for silver handicrafts Certification for gold handicrafts Archeological certificates Certification for exports of plants and forest products Clearance of Nepalese customs

product

An exporter or CA has submit the following documents to the Nepalese border customs :

CTD (yellow copy) Nepal customs export declaration Authority letter of CA Invoice Packing list L/C or certificate of advance payment Certificate of origin Foreign exchange declaration form No. 1 of NRB Enterprise registration certificate, Income tax registration certificate/PAN VAT certificate for beer, spirits and cigarettes Visa certificate for readymade garments, as applicable Valuation certificate for handicrafts Value addition certificate for silver handicraft Passbook for gold handicrafts No-objection letter for domestic animal bone, leather and horn based handicrafts GSP form A, if applicable Clearance certificate of department of archeology for certain handicrafts Clearance certificate of department of plant resources for forest and plant based products Phytosanitary certificate of PQS department of agriculture for plants Clearance certificate of department of drug management for medicines Clearance certificate of department of mines and geology for mineral products.

After the consignment is checked and verified with related documents, the Nepalese customs officer endorses the CTD. After the payment of customs charges, Ca is given clearance to export and move the cargo to the Indian boarder. If a container was booked with prior arrangement with shipping line, the cargo is loaded into the
12

container at the customs premises. Container are also brought to Kathmandu and other factory sites for the loading of export consignments, but the goods are subject to customs check at the border. 2.4.7 Entry into India

The export or CA approaches the corresponding Indian border customs with the cargo and submits the following documents CTD duty endorsed by the Nepal customs.

2.4.8

Invoice - original Packing list - original Certified copy of L/C or certificate of advance payment Certificate of origin - original Duty insurance or legally binding undertaking in the name of the commissioner of customs Authority letter of CA Duty Insurance

concerned

As with import cargo, duty insurance for export cargo is required only for specified sensitive goods and a legally binding undertaking is required for other goods. 2.4.9 Procedures at the port of exit

When documents reach Calcutta, CA files documents at the customs house. the customs house compares the original CTD with the duplicate and triplicate copies received separately in a sealed envelope from CA. Documents are cleared permitting exports by Calcutta customs normally within 24 hours of filling. After documents are cleared by the Calcutta customs, CPT approval is obtained for taking the cargo inside the port. At the same time booking of container with a shipping line is also confirmed. The export cargo is than taken inside the port where the customs EO or PO checks seals and locks on the wagons or containers and packages, and compares with the declaration made on CTD. If seals and locks are found in tact, EO endorses all copies of CTD. In cases where seals and locks are not in tact or there is otherwise suspicion, the goods are checked on percentage basis to ensure that they correspond with the information on CTD before endorsing all copies. Then the cargo is loaded into a vessel or handed over to the ship's agent inside the port. After necessary endorsements, EO gives back the original, duplicate and triplicate copies of CTD to CA who takes them again to the Calcutta customs. After the Calcutta customs makes necessary entries on all copies, the original is handed back to CA for submission to the border customs, the triplicate coy is sent to the Boarder customs and the duplicate copy retained for records. 2.5 Background of Pashmina product of Nepal.

13

Only in high lands of Himalayas, it is the softest wool found in nature often known as the fiber of the king. Pashmina wool was worm by mogul emperors & imported for 18th century aristae craft. This indigenous craft has managed to survive by local traders man who consider this regal fabric as precious jewels. It is said to be eight times warmer than sheep wool. The pashmina fiber is derived from the mountain goal capra hirus (chayangra) which is native to the Himalayan belt around & above 10000 feet above sea level. The pashmina is the fine inner (under) grown over which the goat has another larger of thick & coarse dead fibers. The pashmina is profusely mixed up with the dead fibers. It is the hand gathered with a special comb each goat produces 3-8 ounces of wool annually. It is an extremely complicated technique to extricable pure pashmina from the beds of the coarsest dead fibers into which the real fiber is deeply embedded. Unless fibers are cleaned up to 98% purity before hand spinning, the unique texture of pashmina does not emerge. Having studies the genres of this unique natural gifts to humanity for decade the Nepalese pashmina manufactures have been involved with a determination to revive the heritage of Nepalese pashmina craft with the ancient jell. As the demand of such precious material has increased the new material is not available in own country lance, Chinese pashmina yarns are depended highly to meet the demand in the exportation Chinese white carbmone yarn is world famous in quality & softness. Which has been presently using by prestigious fabric reduction unit all over th world. 2.6 History of pashmina

It is said that in ancient times, the times of mughal emperors pashmina wear was a matter of its owner. Similar to jewellery pashmina product had been used from the time of middle age by Raj Maharjan in India as symbol of artist crafts, used for wedding gifts & elegance. The caravans of the legendry silk road opened the markets of Europe & Asia to unique commodities in the 18th & 19th century. Among it, most desirable of all was the really soft, luxuriously warm textile known as pashmina. There is no recorded as that started using pashmina, but Nepalese women have traditionally worn pashmina shawls. Out ancestors have decried pashmina as sensual sublimity. It is they who perfected the silk to retrieve pashmina up to 95% purity & the silk as such got passed from generation as a heritage of Nepalese craft. It is also found that the genuine & craze in the west has been marrively increasing since they were first paraded on the cat walks in New York & Pairs fashion show back in 1998. 2.7 Production process of pashmina

Every product has to go through a s systematic manufacturing process before it is finally available in a desirable output the following process is undertaken as a series of production of the pashmina products Warping

14

Once the design and needed raw materials are gathered the first step in the production is warping. Warping is the process of rolling silk yarn horizontally on the bean. There warping is usually dine according to the width of the shawls we would like to make. Drafting This is the process of inserting the silk yarn into the nylon netting to from different patters on the shawls. Weaving This is the process of locking the warp (the silk yarn) with the weft (pashmina yarn). this is done with the help of a handloom where the silk garn is placed horizontally & the pashmina is the filling.

15

Mending This is the process of mending the shawls, which are weaved. In this process the places where the threads are missing the weavers with the help of needle & pashmina are yarns fill the space where the threads are missing. Knotting This process take place after the shawl has been weaved. In this process the silk yarn that is left without it being weaved is tied into knots known as fringes. there are usually 90-100 fringes in a shawl whose width is about 90 cm in each fringe there are about 30-35 silk yarns. Crushing This is the process of crushing the shawls in order to give the shawls a softer feeling. The shawls are usually crushed for about 10-15 minutes each. This helps to bring the soft feeling to the shawl. Washing This shawls are washed after it is finished in order wash away the odor and allow the shrinkage of the shawl to prevent it from damage later. it is also done to remove the stain. Dyeing This is the process of giving the shawls the colour the customers want the shawl to have. In this process the shawl are dyed in vessels at 100 degree Celsius. The shawl have to be constantly stirred in order to give the shawl uniform colour. The process varies from industry to industry even product depending upon the size, shape, quality and need of product desired & demanded in the market. Beside the above technical steps most of the pashmina product are handmade. After the above steps most of the pashmina product are sent from quality control where the product are weighted & evaluated. And after the final process, the products are packed & labeled before sending for export. 2.8 Tips on proper handling of pashmina

Pashmina shawls are woven entirely by hands : they are trxtremely delicate & cloud get spoilt when washing it proper is not taken. Professional dry cleaning is the best way to clean the shawls. However, cleaning them in sashing machine can distort the shape & quality of the shawls. Hence, it is recommended for all pashmina products to be professionally dry-cleaned. At the same time it can be washed at home through liquid soap but not need to be dried in sunlight & avoid being squeeze.

16

Direction for hand washing

2.9

Brush gently to remove excess fiber Hand wash in cold water with mild detergent soap or with low PH hair shampoo. Place on a towel & roll up together to squeeze out the water. To dry the shawl, place the shawl flat on the ground & left it air-dry lightlystreth & level the edges. Use a soft brush width wise to give the shawl a soft & fluffy feal. Lightly press with steam iron. Market demands

The most demanding pashmina items of different size in the international market are : Items 1) 2) 3) 4) 5) 2.10 Blanket Shawl Stoles A Stoles B Scarf Country wise export situation Size 50"X80" inches 36"X80" inches 28"X80" inches 22"X72" inches 12"X60" inches

Pashmina product has become the 3rd largest overseas export item of Nepal after readymade garment & hand knotted woolen carpet. Nepali pashmina product is a kind of handicraft, which can be regarded as a handmade high quality woolen product of multipurpose use. Pashmina product has been eroded under its code 6241.20.00. The major markets of pashmina to overseas are UK, USA, Germany, Japan, Italy, France, UAE, Canada and India. the export value of wooled & pashmina shawl, scarves, mufflers, mantillas and veils in the foreign market is summarized in the table 2.

17

Amt in '000' S.N. 1 2 3 4 5 6 7 8 9 Country Germany USA India UK UAE Italy France Canada Japan Total FY 2005/06 127817 234659 NA 235347 56964 83644 76274 53657 86608 1106531 FY 2006/07 103555 341226 NA 155167 58106 74908 79962 31366 67102 1116711 FY 2007/08 130547 332456 NA 229187 52751 63772 141191 48621 35648 1208351 FY 2008/09 385359 315162 194568 166544 156939 135327 122138 53837 43014 1818891 FY 2009/10 228870 229022 83887 173423 62198 105351 129814 49867 41639 1317065

Trade & promotion centre In the table woolen & pashmina products exported to some major overseas countries from FY 2005/06 to 2009/10 is tabulated. In FY 2005/06 the total value of 1106 million of woolen & pashmina products exported to overseas. Similarly, the value of export of woolen & pashmina products are 1116 million, 1208 million, 2818 million & 1317 million in fiscal year 2006/07, 2007/08, 2008/09 & 2009/10 respectively.

Amount in million

E p r tre do p s m ap o u tsto x o t n f a h in r d c o es a vr es
2000 000 1000 500 1000 000 500 000 0 2 0 /0 05 6 2 0 /0 06 7 2 0 /0 07 8 F c lY a is a e r 2 0 /0 08 9 2 0 /1 09 0

Source : TEPC (2010) The trend line in the diagram shows the export trend of trend pashmina & woolen products to overseas from Nepal. The trend is increasing from FY 2005/06 to
18

2007/08. In FY 2008/09 the export seems to be increased highly which is prosperity stage again in FY 2009/10 the export decreased which shows depression. The above trend shows the positive factor for export of the pashmina. It shows the positive aspect of exportability of pashmina products in international market in the coming year.

19

CHAPTER 3
SUMMARY, CONCLUSION & RECOMMENDATION
3.1 Summary

Pashmina is one of the finest softest, warmest & lightest wool found in nature. It is the best wool in the world. Pashmina is known by different names like "Diamond Fiber" & "Soft Gold of high Asia." Pashmina product has become the 3rd largest overseas export item of the country after readymade garment & hand knotted woolen carpet. Pashmina products have played an important role in enhancement of Nepalese economy. Higher the export higher will be the rate of entering foreign currency in the nation. Being labour intensive work, it has also solved to provide employment opportunities to thousand of people. According to the date provided by concerned authority the export of pashmina increase in FY 2008/09. Then is rapid fall in FY 2009/10. There may be various reason ofr reduction in its export like decreasing quality, poor design out dated styles which may not be able to match the need of consumer use of old equipments & many more. The major countries of export of Nepalese pashmina are Germany, UK, Japan, Canada, USA and Italy, France are major ones. The number of international export market of Nepali pashmina products exceeds 40 nations, pashmina products account for more than 50% of total export figure of handicraft product. And also it is major export component unclear the handicraft good category. Government of Nepal, Nepal pashmina association, handicraft associaton of Nepal, trade & export promotion centre name vital contribution over the promotion & development of the pashmina. 3.2 Conclusion

The history of Nepalese pashmina is not very old. In the beginning Nepalese export items were entirely based or agricultural products like raw materials, jute, pulses, timber & some handicrafts. Later carpets garments & woolen products get much publicity in the international market. But over the years pashmina products have emerged as new exportable items. Almost all the pashmina industries are concentrated in Ktm valley, They are absolutely export oriented industries. However, it has given the impression that as many of 5% of its products may be consumed within the country. The export of pashmina helps to increase the economic condition of the nation. It has provide employment opportunity to thousand of export of pashmina improves in the future & exporters could complete in this business world.

20

3.3

Recommendation

We can find many producers manufacturing & exporting pashmina products in the foreign market so every producer has to face tough competition. In this situation pashmina industries cannot survive & run smoothly if the producer ignore competition or do not care about the taste & preference of consumers so, if must analyze its competitive strength and opportunities as well as threats & weakness in the environment. To promote pashmina products in overseas the following points should be considered proper & adequate market research to determine the demand of consumer can always be great help for the pashmina industries to survive & know about strength, weakness, opportunities & threats

Advertisement play a vital role in business, so world wide advertisement publicity is suggested. The exporters are recommended to maintain good relationship with the business main of overseas. The use of the modern equipment & technology in the production should implemented. The export of Nepalese pashmina should be increased. The product should be comfortable & reasonable price should be levied for local people. The satisfied consumers are the most profitable marketers in the long run. The government should arrange for the better operating environment to the industries for the promoting the local industries so as to enhance economic condition of the nation.

21

Bibliography
I. Date clerived from handicraft association of Nepal (HAN) Thapathali,

Kathmandu. II. Data derived from trade & export promotion centre, Lalitpur III. Nepal government, Ministry of Finance (FY 2009/10), Economic survey, Department of printing, Singh Durbar. IV. Shakya Bijendra man, Basics of Trade & Transit CA Nepalese perspective) Educational book centre, Kathmandu. Website V. www.tepc.gov.np VI. www.nrb.org.np

22

Appendix - 1
List of selective Nepalese Manufacturers & Experters of pashmina products.

1. Aama Impex 2. Arihant collection pvt. ltd. 3. Asseatic Trade & Exporters 4. Basnet pashmina Udyog 5. BBD Enterprises 6. Bijay Pashmina udyog 7. Chen Resic pashmina Industries 8. Dhaulagiri pashmina udgyog 9. Dibya pashmina udyog 10. DSR shawls P. Ltd. 11. Elegence pashmina udyog 12. Everest cashmere Industry 13. Everest fashion craft P. Ltd. 14. Exclusive Fabric Industries 15. Euro pashmina Pvt. Ltd. 16. Enish pashmina 17. Everest Enitting Industry 18. Garden Dhoka and pashmina Industries (P.) Ltd. 19. Gimpex pashmina Industries 20. Ganesh handicraft 21. Gandaki Pashmina Udyog 22. High Himalaya Garment 23. Himalayan Pashmina Crafts industries 24. Indecom Soil P. Ltd. 25. Jatan Import Export P. Ltd. 26. Kadam International 27. Kailash Pashmina Udyog 28. Kailash Exports 29. Kamala Quality Pashmina 30. Koka Gorakhkali Pashmina and Handicraft (P.) Ltd. 31. Kiran Enterprises 32. Krishna Pashmina Arts 33. Machhapuchhchhre Pashmina Craft 34. Mount Manasalu Pashmina udyog 35. Mr. Pashmina Industry 36. National Orient Teppich 37. Nepal Craft Gallery 38. Nepal Himalayan Pashmina udyog 39. Nepal pashmina Arts 40. Nepal Pashmina Craft 41. Nepal Pashmina Udyog 42. Nepal Silk Cashmere Industries (P.) Ltd. 43. One world (Nepal) Trading
23

44. Om Knitting Industires P. Ltd. 45. Palistha Enterprises 46. Pashmina Image 47. Pathibhara Commercial Enterprises 48. Rapti Trade Channel 49. Rising Traders & Exporters 50. R.P. Impex 51. Sagtarmatha Silk 52. Sher Nepal Carpet Udyog 53. Shree pashmina Udyog 54. Shangrila Silk Pashmina 55. Shree Satya Sai Pashmina Industries (P) Ltd. 56. Shreera pashmina udhyog (P) Ltd. 57. Siddhi Vinayak Pashmina Udyog 58. Sunakoshi Carpet and Craft 59. The Planet Export 60. universal Pashmina Udyog 61. Yak & Yati Enterprises 62. Yangkila Pashmina Industry 63. Yetiland trade Link 64. Yog Store

24