Industries exporting “Made in Nepal” goods valued at over Rs 500 million have applied for government-subsidized exports, but despite multiple visits to relevant offices, they have yet to see any results, leading to feelings of hopelessness.
About two years ago, the government announced a cash subsidy of up to 8% for industries—such as yarn, cement, clinker, steel, carpets, noodles, footwear, processed water, information technology, and business process outsourcing—that export goods exceeding Rs 500 million annually. While the subsidy program was first introduced in the budget five years ago, its implementation only became feasible after a work procedure was established two years back.
Large industries report that they have submitted their applications in accordance with the rules, yet no payments have been made. They face numerous administrative and procedural hurdles.
On Tuesday, the Federation of Nepal Exporters Association (FNEA) sent a letter to the Ministry of Finance (MoF) urging the prompt disbursal of the subsidy owed to exporters. “This Federation and our members have repeatedly requested the MoF for the disbursal of the subsidy to exporting industries, but despite two years of program implementation, no payments have been made,” stated the letter signed by FNEA President Pawan Golyan.
An industrialist expressed frustration over timely tax payments and the accompanying penalties, questioning why the government announced the subsidies if they were not going to be disbursed. “It is the taxpayer who should not have to bear the burden of this delay,” he stated.
Initially, the private sector welcomed the government’s announcement of the subsidy for export promotion, but industrialists are now disheartened by the lack of implementation. Meanwhile, the government’s liabilities, such as payments to contractors, COVID insurance, and agriculture insurance, have continued to accumulate.
Exporters estimate that the total subsidy for exports may exceed Rs 2 billion. The Department of Customs, Department of Industry, Nepal Rastra Bank, Ministry of Industry, Commerce and Supplies, and MoF are the main agencies responsible for implementing the subsidy program.
According to the subsidy program’s work procedure, the funds must be tied to the income reflected in the balance sheet of the same year and spent on international market promotion, technology and capacity building, and e-commerce.
The FNEA highlighted that the subsidy would aid industries in adopting the latest technology, promoting their products in foreign markets, and producing high-quality goods.
A senior official from the Ministry of Industry, Commerce and Supplies (MoICS) stated that the Ministry is “highly concerned” about the industrialists’ demands but is struggling to manage the funds. “The MoICS and MoF are in close communication to explore options for making payments to exporters through an additional budget disbursement,” the official added.
