A Study on Export Challenges of Handicraft Industry in Kathmandu

Abstract

This study aims to explain the various challenges faced by the small and medium sized handicraft exporting firms. This study is based on the handicraft exporter around the Kathmandu valley. Handicraft is the major export item of Nepal. The felt product, leather goods, metal crafts, woolen products, cotton goods, etc. are major exported item of Nepal. These handicraft products are exported to around 80 countries around the world. Among them USA is the major buyer of the handicraft products. Although Nepalese handicraft possess the great export potential, it is not being able to contribute major to the total export. It has only contributed around 5-7% in the total export. Thus, this study identifies the major challenges faced by the handicraft exporters. This study is based on the article by Suhail M. Ghouse who conducted a research on an export challenges to MSMEs with the reference of handicraft industry in India.To identify the challenges more precisely, various export related problems such as export documentation, export market-based demand, regulatory policy uncertainty, infrastructure, technology & tools in manufacturing, exchange rates, market awareness & export promotion, export related subsidies, research & development, HRD related, and social capital resources were asked to rate on a 5-point Likert Scale to the concerned member of the handicraft exporter. The result showed that quality management followed by lack of export related subsidy and lack of market awareness and export promotion were the major challenges for the handicraft exporting enterprises. The lack of skilled and professional craftsmen, no or low demand from the importer, limited awareness among exporter about market linkages are also creating the challenges.The other challenges such uncertainty in the regulatory policies, infrastructure related problems, tools and technology, exchange rate, research and development also pose to create barriers in export growth.