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Saving Big When Manufacturing in Nepal - International Trade Preferences

By Corban Bryant and Alex Berryman

Nepal Trade Preference

While it's rarely a go-to topic at parties, knowing international trade policy is a tremendous tool to save you money when outsourcing your product manufacturing abroad. The US, Canada, and the European Union have special trade preferences that allow brands manufacturing in Nepal to save money. The more you know, the better - but instead of sifting through dry international trade agreements, we have put together a guide to maximizing your country's trade preference program, saving you money.

US Trade Preference Program

To encourage economic development after Nepal’s devastating 2015 earthquake, the USA granted special trade preference for goods being exported from Nepal. Specifically, certain goods made in Nepal and imported into the USA are granted duty-free treatment. When using Nepali manufacturers, American brands can benefit from this during the importing process. With 66 products qualifying, there are a wide variety of products that enjoy this trade preference, including:

  1. many kinds of handbags

  2. suitcases

  3. sports bags

  4. various carpets

  5. gloves

  6. scarves and shawls

  7. hats and other headgear.

By taking advantage of these trade preferences, you can save all of your duties which can be up to 20% of the cost of your products. Follow the simple tips below to capitalize on the benefits and check out the Trade Facilitation and Enforcement Act of 2015 overview.

How do I take advantage of the Nepal Trade Preference?

1. Make sure your products are included in this Act - Check out Section 915 lists 66 subheadings of the Harmonized Tariff Schedule of products. This is a complete list of which products made in Nepal that will receive a duty-free entry to the United States.

US Trade Preference
US Trade preference with Nepal

You can use this resource to look up your product, or the various HS Codes listed in the trade preference. If you see an “NP” in the column marked “Special”, then it’s time to celebrate! This indicates that your product is included in the Trade Preference Program.

2. Manufacture in Nepal - To take full advantage of the preference, you can produce one of th