To enhance the contributions of trade sector to national economy by promoting internal and international trade with the increased participation of private sector through the creation of an open and liberal atmosphere. 

To diversify trade by identifying, developing and producing new exportable products through the promotion of backward linkages for making export trade competitive and sustainable. 

To expand trade on a sustained basis through gradual reduction in trade imbalances. 

To co-ordinate trade with other sectors by expanding employment-oriented trade. 

 Export Strategy 

Licenses will not be required for the export of products other than banned or quantitatively restricted items. In the case of quantitatively restricted products, arrangement for issuance of export license will be made in consultations with the private sector. Quantitative restrictions in the export of such products will gradually be removed through appropriate taxation measures. 

For export promotion, improvements will be made in the existing transit transport network and its infrastructure. Administrative procedures will also be made transparent, smooth and efficient. 

For the promotion of exports, container service will be introduced and the existing bonded warehousing system will further expanded and improved. 

The duty drawback scheme for the refund of import duty paid on the importation of raw materials and intermediate goods required for the production of exportable products will effectively implemented. In this context, duty on import of raw materials will be fully exempted taking into consideration the needs, or the bonded warehousing system will be introduced for the storage of such materials. 

Exports will be free from all charges except the service charge. However, the provisions of para 4.1 above will be applicable in respect of the export of essential products. 

For the promotion of exports, Export Promotion Zone (EPZ) will be established. No duty will be levied on the raw materials and auxiliary imports used by industries established in such EPZ. Industries exporting more than 90 percent of their production will be granted similar facilities as given to the industries established in EPZ. 

As a preparatory step towards full convertibility of the Nepalese currency in trade and services, exporters will have to sell in the stipulated percentage the amount of foreign exchange earned through exports of goods and services to commercial banks at a rate fixed by the market mechanism and the remaining balance to Nepal Rastra Bank at an exchange rate fixed by the Government. No license will be required and no quantitative restriction will be imposed on the imports of the raw materials (except stipulated) required for the export-oriented and import-substituting industries. But for the import of such materials, foreign exchange will be made available by the commercial banks at the rate fixed by market mechanism. Exporters will be allowed to open a foreign exchange account in the banks for the purpose of spending certain percentage of one's foreign exchange earnings in trade promotion activities. 

Export Valuation System will gradually be abolished after the full convertibility of the Nepalese currency. 

Quality will be tested from time to time in order to improve the standard of exportable products and necessary information will be made available for this purpose. 

Simple and convenient procedures relating to pre-and post-shipment credits will be adopted on a priority basis. 

Income tax on income from exports will be fully exempted, and income earned from exports to India on the basis of letter of credit or agreed banking document will also be free from income tax. 

Emphasis will be given on the development of packaging technology to maintain the quality standard of export products. 

Nepalese missions abroad will be geared up towards export promotion activities, and trade missions will be opened and institutionalized on the basis of feasibility. 

No quantitative restrictions will be imposed on the exportable products carried by tourists while returning from Nepal. 

Export procedures and documentation, thus be formulated, will be short and simple. 

An annual indicative export plan and programme on the basis of feasibility will be formulated with the co-operation of private sector to promote exports. 

Necessary information and training relating to technology, marketing and export procedures required for export promotion will be provided on an institutionalized basis and arrangements will also be made for the participation in national and international trade fairs for market promotion. 

Regular monitoring will be made to avoid distortion in exports and imports. Strong actions will be taken in case of misuse of facilities. 

Export promotion, research and development, and training schemes will be developed on institutional basis, for developing new exportable products, and for raising the quality and production of the traditional exportable products. 

Deemed Export 

If any producer earns foreign exchange by selling one's own products to projects run under bilateral or multi-lateral aid or if such finished or semi-finished products are sold to EPZ, such sale will be granted facilities at par with exports. Custom duty, sales tax and excise duty levied on such sales will be refunded and the income generated from such sales will be exempted from income tax. In addition, foreign exchange earned from such sales can be sold at the rate fixed by the market mechanism after submitting the stipulated percentage amount to Nepal Rastra Bank at the rate fixed by the Government.

List of quantitatively restricted & banned items for exports 

National and foreign coins of archaeological value 

Idols of gods and goddesses, palm leaf inscription (Tad Patra), plant leaf inscription (Bhojpatra) 

Scroll (Thanka paintings) of historical importance 

Wild animals 

Bile and any part of wild animals 

Musk 

Snake skin, lizard skin 

Drugs 

Marijuana, opium, hashish (as defined in the Single Convention on Narcotics, 1961) 

Materials used in the production of arms and ammunition 

Industrial Raw Materials 

Raw hides and skin (including dry salted) 

Raw wool 

All imported raw materials, parts and capital goods 

6. Other Products 

Mamira 

Log and timber 

Products as notified by His Majesty's Government in the Nepal Gazette from time to time 

All products other than banned ones and which are under quantitative restrictions. 

Notes: