Nepal will seek an extension of the U.S. customs duty exemption for 77 products under the Nepal Trade Preference Program (NTPP) at the 7th Trade and Investment Framework Agreement (TIFA) Council meeting today. This preferential treatment, in effect from 2016 following a U.S. law passed in 2015, is set to expire in December 2025.

During the meeting, Nepal will request the U.S. to extend the NTPP beyond its current deadline. Baburam Adhikari, Joint Secretary at the Ministry of Industry, Commerce, and Supplies, stated that Nepal will push for the indefinite continuation of the NTPP. If not extended, the country will lose its duty-free facility starting from 2026. Furthermore, Nepal plans to request the inclusion of approximately 30 additional goods and services under this program, including ready-made garments and IT services.

Secretary Gobinda Bahadur Karki stressed the importance of securing duty-free access for goods such as pashmina, handicrafts, and footwear, which are still subject to significant U.S. customs duties. The Garment Association of Nepal (GAN) has also urged the inclusion of additional textile products, such as men’s and women’s cotton shorts and synthetic half-pants, which they believe are fast-moving items.

Footwear companies like Goldstar, which launched its products in the U.S. two years ago, face a 37.5% customs duty on exports, severely limiting their competitiveness. Goldstar's Executive Director, Vidushi Rana, stated that these high duties make their shoes five times more expensive in the U.S. retail market, forcing them to halt exports. She emphasized the need for the government to push for footwear inclusion in the NTPP.

In addition to customs exemptions, Nepal will also discuss expanding its IT service exports, with the U.S. as a key market. The current fiscal year’s budget sets a target of $30 billion in IT service exports over the next five years. Despite the NTPP’s provisions, Nepal has yet to fully utilize the exemptions, with over a dozen items under the program yet to be exported.

The meeting will also address U.S. technical assistance to Nepal and efforts to improve Nepal's investment climate, following legal reforms highlighted at the third investment summit held in Kathmandu earlier this year.