For Nepal, with a GDP per capita of about $1,377, new agricultural export markets offer opportunities for more jobs and enhanced incomes. Those would be particularly welcome for the farm families that make up roughly two-thirds of the mountainous country’s 31 million people.
In modern commerce, though, it is not enough to have ginger, cardamom, and fruits to offer. The goods must meet the so-called sanitary and phytosanitary standards of trading partners to ensure they are free of pests and safe to consume. Until recently, Nepal lacked the necessary pest-treatment capacity to export to certain high-value markets with strict standards.
Now, thanks to a team of workers newly trained to treat the products, fresh trading possibilities are opening for Nepal—and with them the prospect of improved farm incomes. In October 2024, a team from Australia’s Department of Agriculture, Fisheries and Forestry traveled to Kathmandu to provide training and certify Nepal’s ability to oversee treatment. Over four days, two Australian instructors trained more than 40 Nepali participants.
“The level of training provided by Australia is very thorough and equivalent to other country requirements,” said Prakash Paudel, Senior Plant Protection Officer at Nepal’s Plant Quarantine and Pesticide Management Centre, who was among the trainees. Inspectors such as Paudel oversee treatments at a facility near Kathmandu that was refurbished under a project financed by the World Bank. The facility was designed with the guidance of an expert from New Zealand.
“This pioneering initiative is expected to significantly enhance Nepal’s export market,” said Rajan Kumar Joshi, Managing Director of Global Link Logistics Pvt. Ltd., a company that trades goods including handicrafts and garments, some of which also require treatments and inspections.
Before the facility was opened, exporters had to ship goods outside Nepal to be treated. Those goods were then certified by inspectors from Nepal as pest-free before they were sent to their intended destination. This added costs and uncertainty, given that the inspectors had not verified the treatment being performed. In some cases, shipments were found to have been improperly treated by the destination country, forcing traders to take them back at added expense. This happened recently to a trader exporting rice to Australia, where inspectors detected pests.
The lack of a treatment facility helps explain why Nepal has been sending 90 percent of its exports to neighboring India, which does not require treatments for many commodities. Nepal’s agricultural exports made up 54 percent of its total goods exports. Handicrafts, which are made by more than 1 million producers, contributed another 20 percent of exports.
The ability to carry out required treatments and inspections has boosted in-country capacity and reduced Nepal’s dependence on foreign treatment providers. Lower costs and more reliable certification make it possible for Nepali traders to seek new buyers in Australia, China, and the United States—markets where agricultural goods like the ones Nepal supplies can command higher retail prices.
“This advancement will reduce costs and time,” said Surata Kafle, a consultant at Orion Pest Solutions Pvt. Ltd., a Nepali company that provides pest-treatment services who also participated in the Australian training program.
Globally, the number of sanitary and phytosanitary measures has increased over time, even as tariffs on goods have declined substantially. These measures introduce additional costs and market challenges, especially for developing countries like Nepal with limited capacities and technology. Yet, studies show that once a country complies with measures demanded by its trading partners, trading volumes can increase.
Nepal’s International Trade Centre estimates that the country has the potential to sell US$1.2 million in fruits, vegetables, and spices to Australia, compared with just US$5,000 today. Potential sales to the United States are estimated at US$7.6 million, compared with the current figure of US$30,000. Ginger exports to Germany could double from the current $2.7 million.
The government of Nepal hopes the facility will eventually be run by private companies through a public-private partnership.
The World Bank’s technical assistance to Nepal in improving its trade efficiency was supported by the Trade Facilitation Support Program, which is funded by Australia, Canada, the European Union, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the United States. The project financing for refurbishment of the facility is part of the World Bank’s US$801 million Strategic Road Connectivity and Trade Improvement Project, which aims to improve the efficiency of cross border trade.
Related content
Fiji is digitalizing trade processes, helping firms expand in new markets and hire more workers
Timor-Leste moves toward WTO membership with new biosecurity legislation
Digital certification makes cocoa traders in Côte d'Ivoire more competitive
Join the Conversation