Spicing up the economy

Products like large cardamom could be Nepal’s way out of a ballooning trade deficit and economic mess.

With its misguided focus on earning through custom duties rather than by boosting its production, it’s hard to see Nepal’s economic engines revving up soon. In the first 10 months of the current fiscal, the country’s trade deficit narrowed by 15.85 percent, compared to the same period in the previous fiscal. What is interesting is that even as imports declined by 16.78 percent, exports plunged by 24.49 percent. The country could be producing and exporting so much more. Take large cardamom. Nepal is the world’s biggest producer of this high-value spice. In the first nine months of the current fiscal, it exported a record Rs 6.36 billion worth of the product. More than 90 percent of the large cardamom was exported to India, where a kilogram of it fetches between Rs700-Rs1,000. Indian importers process the Nepali product and resell them in third-countries at significant mark-ups. If Nepali producers could directly sell to end customers, say in the Middle East, large cardamon’s biggest market, the country could earn a lot more from the same quantity it now sells to India.