Study Finds High Potential for Exporting 103 Nepali Products to Bangladesh

A recent study has identified high potential for exporting 103 Nepali products to Bangladesh. The report, released by South Asia Watch on Trade, Economics and Environment (SAWTEE), found that 103 products under six-digit Harmonized System (HS) codes have strong export prospects in the Bangladeshi market.

These products include vegetable oil, cardamom and spices, synthetic textiles, tea, yarn, shawls, mufflers, footwear, steel and stainless-steel products, jerseys, iron, plastic products, pet food, paper and paperboard, jackets and blazers, veterinary syringes and medicines, jewellery, carpets and other textiles, and dairy products.

The report noted that while these items have strong market potential, Nepal’s current exports to Bangladesh remain negligible. Of the 103 identified products, 26 are agricultural and 77 are non-agricultural. Nepal’s top current exports to Bangladesh include lentils, oil cake, bran, prepared foods, medicinal herbs, animal products, flour, dried ginger, and vegetable-origin products. The number of potential exportable goods would rise to 164 if calculated under the eight-digit HS code.

According to SAWTEE, Nepal has barely utilised its export capacity to Bangladesh. Data from the Department of Customs show that in Fiscal Year 2024/25, bilateral trade between Nepal and Bangladesh amounted to Rs 5.85 billion. Nepal exported goods worth Rs 660.1 million while importing goods worth Rs 5.18 billion from Bangladesh.

The study concluded that Nepal is losing potential market share in Bangladesh due to the failure to export goods with high demand. It identified high import duties imposed by Bangladesh as the main barrier. While the average customs duty under the South Asian Free Trade Agreement (SAFTA) is 9.6 percent, additional para-tariffs raise the effective rate to 46.7 percent.

The report highlighted that Bhutan enjoys zero-duty access to 18 products in Bangladesh under a preferential trade agreement signed in 2020. Many of these are also among Nepal’s potential export products, but higher tariffs compared to Bhutan have hindered Nepal’s exports.

Non-tariff barriers imposed by Bangladesh, particularly on agricultural products, have also limited Nepal’s exports. “While these measures have not yet turned into full-scale trade restrictions, the risk always exists,” the report stated. “Nepal must strengthen its lobbying capacity to push for the removal of Bangladesh’s non-tariff measures.”

Potential Products for Export to Bangladesh:
Vegetable oil; cardamom and related spices; synthetic textiles; tea; yarn; shawls and mufflers; footwear; steel and stainless-steel products; jerseys; iron; plastic products; pet food; paper and paperboard; jackets and blazers; veterinary syringes and medicines; jewellery; carpets and other textiles; dairy products.