As the U.S. law granting Nepal customs-free access for 77 products is set to expire in December 2025, Nepal’s private sector is calling on the government to initiate high-level lobbying for its extension. Given that Nepal has not significantly benefited from this facility over the past nine years, representatives are also advocating for additional products to be included under the customs-free scheme.

Following the devastating earthquake in 2015, the United States introduced zero customs duties on 77 different products exported from Nepal. The U.S. Congress enacted this law, which took effect in 2016 under the Nepal Trade Preference Program (NTPP), providing the facility for a ten-year period. With the seventh meeting of the Trade and Investment Framework Agreement (TIFA) between Nepal and the United States scheduled for 15th September in Kathmandu, the private sector is urging the government to request the U.S. to extend the NTPP and expand the list of products eligible for customs-free access.

During a programme organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) in Kathmandu, in collaboration with the Nepal Garment Association, Export Entrepreneurs Federation Nepal, Nepal-America Chamber of Commerce, and USAID, FNCCI President Chandra Dhakal expressed concerns over the uncertain future of the NTPP post-December 2025. He emphasised the need for the government to undertake high-level initiatives to secure its continuity and to include more products with significant export potential to the U.S.

Pashupati Dev Pandey, president of the Nepal Garment Association, highlighted the interdependence between TIFA and NTPP, urging the government to prioritise the renewal of the NTPP. He also recommended that additional products with potential for increased exports be included in the list of customs-free items. Pandey pointed out that most of the products currently under the NTPP have customs duties ranging from 4% to 9%. It shows that the American buyers are not interested in garments produced in Nepal. He called for efforts to secure customs-free facilities for 15 additional fast-moving and core competence items, including cotton shirts, shorts, trousers, T-shirts, and synthetic shorts for men and women.

Currently, the 77 products eligible for customs-free access include carpets, shawls, scarves, travel bags, and caps. Pandey noted that readymade garments, which typically face customs duties ranging from 14% to 34%, are not included in the NTPP. Exporters have argued that due to Nepal’s landlocked status, limited production capacity, and logistical challenges, the high production costs have prevented the country from fully benefiting from customs-free access in the U.S.

The private sector is thus pushing for the extension of the U.S. customs exemption for Nepal, while the Garment Association recommends the inclusion of 15 additional products on the zero-customs list.

Pandey also observed that industries that previously thrived by exporting garments to the U.S. have now shut down. He stressed the need for the government to take necessary steps under TIFA to revive these industries, which are keen on regaining access to the U.S. market.

At the event, Paras Kharel, Executive Director of the South Asia Watch on Trade, Economics, and Environment (SAWTEE), suggested that efforts should be made to extend the NTPP and revive the Generalized System of Preferences (GSP) facility, which is currently suspended. Kharel noted that while exports under the NTPP are declining, those under the GSP facility are on the rise, making it imperative to revive the GSP.

He also highlighted that significant quantities of churpi (hardened cheese) are currently being exported to the U.S., urging efforts to maintain this market and identify similar products with export potential.

Kiran Prakash Shakya, President of the Nepal-America Chamber of Commerce, emphasised the importance that the Nepalese exporters and the government understand American customers’ demands and the quality standards they seek.

Shankar Prasad Pandey, President of the Export Entrepreneurs Federation Nepal, remarked that Nepal’s exports had already begun to decline when the TIFA agreement was signed in 2011. He stated that while Nepal was granted customs-free access for 77 items under the NTPP, the country did not benefit as expected. He noted that the higher export figures were only a result of the increased value of the U.S. dollar, not the actual quantity exported. In the upcoming TIFA meeting, Pandey stressed the need to evaluate and analyse the existing list of items to determine whether to remove certain products or add new ones.