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Nepal's LDC graduation presents both chances and challenges.

According to a recent report, Nepal must take a holistic approach to managing the challenges of leaving the Least Developed Country in 2026.

The Ministry of Industry, Commerce, and Supplies commissioned the study, Nepal LDC Graduation: Report on Trade Policy Reforms to Mitigate the Impact on WTO Obligations, with assistance from the European Union's Nepal Trade and Investment Programme (TIP). It was discussed in a public-private discussion.

The report emphasizes how important it is for Nepal to improve institutional processes, expand export markets, diversify its human resource base, strengthen international cooperation, and change its legal and regulatory frameworks.


In order to better prepare for trade scenarios following graduation, policymakers, trade experts, development partners, and representatives of the private sector concur that Nepal has to move quickly to speed legislative and regulatory reforms as well as build institutional and human resource capacities.

The program's coordinator, Krishna Bahadur Raut, secretary at the Ministry of Industry, Commerce, and Supplies, stated that the government takes ideas and worries from the corporate sector about Nepal's preparations very seriously. Additionally, he committed government efforts to guarantee Nepal's post-graduation advantages.

Joint-secretary for the ministry Debraj Joshi stated that trade-related laws and regulations in Nepal must continue to be reformed, citing both opportunities and problems associated with the country's graduation.


The former commerce secretary and trade expert Purushottam Ojha emphasized the significance of abiding by new WTO obligations, such as trade-related agreements on subsidies, agriculture, trade-related aspects of intellectual property rights (TRIPS), and trade facilitation agreements (TFAs), in order to ensure a smooth transition.

In order to achieve a smooth transition from the LDC classification, Abhijit Das, an International Trade Expert from the International Trade Center, issued a warning that the shift will result in harsher regulations and fewer benefits, such as the loss of cheaper tariffs. He also emphasized the importance of putting the action plan into effect.


The Federation of Nepal Women Entrepreneurs' Association president, Shobha Gyawali, stated that Nepal is not yet developed enough to graduate from LDC and asked that gains from international commerce be given to women entrepreneurs.

Other private sector leaders noted that considering the low competitiveness of Nepali businesspeople and the higher cost of production and export compared to other nations, it appears that the graduation was scheduled without enough planning.

The report also issues a warning, stating that Nepal will no longer benefit from the Duty-Free Quota-Free and Generalized System of Preferences (GSP), which could result in increased export duties. It suggests looking into alternative trade agreements like GSP-Plus in the European Union, conducting in-depth diagnostic studies to identify susceptible goods and markets, and holding workshops to increase industry knowledge.


Other recommendations of the study to ensure a successful transition by mitigating the impacts of LDC graduation include strengthening national capacity to address non-tariff barriers, developing national standards, forming mutual recognition agreements with key trade partners, promoting products prioritized by the Nepal Trade Integration Strategy (NTIS) 2023, learning from other LDC-graduated countries, and fostering partnerships among governments, private sector, and international partners.