South Asia Watch on Trade, Economics and Environment (SAWTEE), in collaboration with The Asia foundation (TAF), organized a seminar on “Trade policy and economic diplomacy in Federal Nepal”. Findings of two studies on the topic were presented and discussed at the event.

Speaking at the inaugural session, Toyam Raya, Secretary, Ministry of Industry, Commerce and Supplies (MoICS), said that Nepal’s future trade policies must be formulated through proper and adequate consultations among all the tiers—local, provincial and federal—of the government as well as the private sector. Diplomatic missions play a vital role in promoting exports, he added.

Bharat Raj Paudyal, Secretary, Ministry of Foreign Affairs (MoFA), said that federalism can be leveraged to address the major issues that plague Nepal’s exports: weak intergovernmental coordination, supply-side constraints, poor adoption of technology, weak production capacity, lack of trade policy coherence, and finally poor implementation of policies. He also pointed out that economic diplomacy cannot function in isolation, hence collaboration and coordination between various stakeholders are essential.

Dr. Posh Raj Pandey, Chairman, SAWTEE, pointed out that while Nepal has accorded the highest priority to export promotion, even acknowledging the importance of promoting exports in the directive principle of the Constitution, the export performance in the past decade has been dismal, primarily because of poor supply capacity.

Dr. Paras Kharel, Executive Director, SAWTEE, said that as Nepal stands on the verge of graduating from the LDC category (in 2026), trade and economic diplomacy carry special importance in charting the post-graduation landscape.

Presenting the findings of a study, Purushottam Ojha, Former Secretary, MoICS, and Neelu Thapa, Researcher, SAWTEE, recommended identification and development of products along with the need for product and market diversification to boost Nepal’s exports. The study highlighted the need for technical support and capacity building programs and recommended strong coordination within the three tiers of governments for effective implementation of trade policies

The panelists, including former policymakers, emphasized on the need to make trade policy more focused. The private sector representatives such as Neeru Rayamajhi Khatri, President, Federation of Women Entrepreneurs Association of Nepal (FWEAN), Shanta Baskota Koirala, Director, Kanchanjangha Tea Estate and Research Centre (KTERC) and Mr. Rajendra Timilsina, Entrepreneur, Himalayan Natural Food Product and Export Pvt. Ltd., called attention to the need to integrate trade policy to promote entrepreneurship by increasing access to technology, infrastructure, knowledge, and capacity building activities of the entrepreneurs.

Urging the policymakers to take advantage of the federal structure, Rajan Sharma, Former President, Nepal Freight Forwarders Association, emphasized on the need to allow subnational governments to play a role in enhancing the supply-chain.

On the topic of economic diplomacy, Dr. Dinesh Bhattarai Former Ambassador, and Swastik Aryal, Research Officer at SAWTEE presented the findings of a study on economic diplomacy for trade facilitation and export promotion in the context of federal Nepal. The major gap identified by the study was underutilization of economic diplomacy for trade facilitation and low coordination within government agencies as well as with other stakeholders. The study recommended strong partnership between government agencies for the utilization of economic diplomacy and the need to establish and strengthen the institutional arrangement for economic diplomacy.

Prof. Shambhu Ram Simkhada, Former Ambassador, highlighted the importance of focusing on improving structural and supply-side constraints to trade. He emphasized that focus should be on high-value niche products instead of mass production of low-value products for export.

Suraj Vaidya, Former President, Federation of Nepalese Chambers of Commerce and Industry (FNCCI), gave an insight into the challenges faced by the private sector in trade such as lengthy bureaucratic processes. He called for putting Nepal’s internal house in order, which he deemed a precondition for diplomacy to work efficiently.

Rabi Shankar Sainju, Trade and Economic diplomacy Expert, highlighted the importance of infrastructural development, better linkages between buyers and suppliers, and effective diplomacy to remove protectionist measures applied by other countries.

The event saw the participation of current and former policymakers, trade experts, diplomats, researchers, academicians and journalists, among others.