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 sizedhandicraft exporting firms. This study is based on the handicraft exporter around theKathmandu valley. Handicraft is the major export item of Nepal.The felt product, leathergoods, metal crafts, woolen products, cotton goods, etc. are major exported item ofNepal.These handicraft productsare exported toaround80 countries around theworld.Among them USA is the major buyer of the handicraft products. Although Nepalesehandicraft possess the great export potential, it is notbeingable to contributemajor tothe total export. It has only contributed around 5-7% in the total export.Thus, this studyidentifies the major challenges faced by the handicraft exporters. This study is based onthe article by Suhail M. Ghouse who conducted a research onanexport challenges toMSMEs with the reference of handicraft industry in India.To identify the challenges moreprecisely, various export related problemssuch asexport documentation, export market-based demand, regulatory policy uncertainty, infrastructure, technology & tools inmanufacturing, exchange rates, market awareness & export promotion, export relatedsubsidies, research & development, HRD related, and social capital resources wereasked to rate on a 5-point Likert Scale to the concerned member of the handicraftexporter. The result showed that quality management followed by lack of export relatedsubsidyand lackof market awareness and export promotion were the major challengesfor the handicraft exporting enterprises.The lack of skilled and professional craftsmen,no or low demand from the importer, limited awareness among exporter about marketlinkages are also creating the challenges.The other challenges such uncertainty in theregulatory policies, infrastructure related problems, tools and technology, exchange rate,research and development also pose to create barriers in export growth.