In this time of crisis, when many challenges surrounds economy of Nepal. It has become mandatory to focus on the sectors which can help its economy to recover the trade balances and deficits. Fortunately the country has already shortlisted such sectors which can be help through Nepal Trade Integration Strategy 2010 (NTIS 2010). The Ministry of Commerce and Supplies (MoCS), Government of Nepal (GoN) wrote this report with financial support of United Nations Development Programme (UNDP), the Government of Finland, the United Kingdoms Department for International Development (DFID), the International Finance Corporation (IFC), and the International Trade Centre (ITC). The report meant to support the building blocks of economy where GoN can focus and move to new horizon. It had identified 19 sectors. NTIS 2010 was later revised in 2015 which has narrowed down the focus sectors to 12.
Fortunately, Medicinal and aromatic plants (MAPs) is one of those sector which has successfully secured its position in prioritized area of NTIS 2010 and its 2015 amendment both. Conclusively, it is evident that GoN has realized the economic potential and possibilities of the sector. However, when studied carefully the severe challenges of medicinal plants sector appears overlooked. The prevailing ambiguities in regulating legislation, limited research and support has made performance of this sector even more critical.
On the contrary, there have been several intervention through private sector, INGOs and NGOs for these challenges. It has failed to bear any fruitful outcomes. The traded MAPs from Nepal are mostly raw. It has been realized by stakeholders that value addition in the traded MAPs is very essential to get better price and market. As per records of Jadibuti Association of Nepal (JABAN), there are approximately 100 MAPs species in trade. Value addition in any commodity is not mere a word, it is an activity which involves improving standard and finding better market. For this acknowledgement of market, certain standard is mandatory. As a result, bridge of assistance is important for private sector to gain momentum.
In recent years, huge haul has been created in Nepal for export marketing of MAPs. There is lot of investment at stake for this as well. For this sector to flourish, it has become need of the time. Additionally, ignoring domestic market growth for this is another blunder. At present, the traders prefer export to neighboring nations and abroad due to hassles in the system. This is happening because mostly indigenous manufacturers have requirements in small quantities. For local traders, to provide these quantities is difficult due to lengthy documentation and legislation systems. As a result, the domestic manufacturers are importing the MAPs of their requirements.
This has become a vicious circle as traders end up selling at low prices and manufacturers get their ingredients at high prices comparatively. Consequently, the products of manufacturers bears high cost which makes it expensive for the catered segment in the market. It makes their products less competitive in the market.