Nepal's pride industry is under existential threat
Time:2023-05-29 14:35

Our shoes are not just products; they are symbols of national pride, telling the world that we are a nation that values tradition, innovation, and excellence.

Nepal's footwear industry is a vital sector of the economy, employing over 55,000 workers, with more than one-third of them being women. With approximately 1,500 footwear industries operating in the country, the sector contributes significantly to employment and economic growth. However, the industry faces daunting challenges that threaten its survival, including rampant smuggling and under-billing practices, stakeholders suggest, adding, it is high time that the government takes decisive measures to protect and nurture this homegrown industry.

According to Footwear Manufacturers' Association of Nepal (FMAN), one of the major challenges faced by the Nepali footwear industry is smuggling across the Indian border. Large quantities of shoes and slippers are illicitly transported into Nepal by misusing the open border. This nefarious activity not only hurts the domestic manufacturers but also deprives the government of much-needed revenue. Smuggled footwear goods flood the market, attracting sellers with the promise of high profits. Furthermore, poor supervision and lax implementation of rules and regulations contribute to the transportation of smuggled goods within the country undetected.

"To combat smuggling effectively, the government needs to bolster its agencies and actively mobilize personnel to conduct warehouse checks and raids. These efforts should be focused on the areas along the Nepal-India border where smuggling activities are most prevalent, such as Butwal, Bhairahawa, Krishna Nagar, Nepalgunj, Birgunj, Janakpur, Mahendranagar, Dhangadi, Biratnagar, and Jhapa," FMAN's Chairperson Naniraj Ghimire said.

Additionally, customs and security agencies should be extensively deployed in border areas to tighten control over illegal activities. Checkpoints along highways can also be established to monitor and prevent the movement of goods by transport companies using fake invoices.

Underbilling is another grave concern that plagues the Nepali footwear industry, said Ghimire. Traders resort to declaring lower prices and manipulating the quantity and nature of goods to evade customs duties and taxes. This deceptive practice not only harms the government's revenue collection but also creates an unfair playing field for domestic manufacturers who dutifully adhere to regulations. The government should take stringent action against those involved in underbilling, ensuring that they face the full force of the law. Regular monitoring and audits can help identify such cases and serve as a deterrent to those engaging in fraudulent practices.

It is crucial for all government agencies, from the bottom to the top, to prioritize the control of revenue leakage and smuggling, said FMAN. This requires a coordinated effort and a commitment to enforcing the law. By mobilizing resources and personnel effectively, positive results can be achieved. Additionally, cooperation and collaboration between Nepal and India are crucial in addressing cross-border smuggling. Establishing channels of communication and sharing intelligence can go a long way in curbing illicit activities.

Furthermore, supporting the domestic footwear industry should be a priority for the government. This can be done by providing incentives, such as tax breaks and access to finance, to local manufacturers. Investing in research and development for innovative designs and technologies can help enhance the competitiveness of Nepali footwear in both domestic and international markets. By promoting "Made in Nepal" products, the government can instil a sense of pride among consumers and boost demand for locally produced footwear.

Footwear Manufacturers' Association of NepalFootwear Manufacturers' Association of Nepal

The formation of a strong alliance among shoe manufacturers in Nepal is of paramount importance to effectively advocate for the protection and growth of the industry. Currently, these players operate independently, which limits their collective impact on policy formulation and implementation. By coming together and forming a unified front, they can consolidate their resources, expertise, and influence to shape policies that prioritize the interests of the domestic footwear industry.

A strong alliance of shoe manufacturers can have a powerful voice in advocating for policies that address the challenges faced by the industry, such as smuggling and underbilling. By pooling their knowledge and experiences, they can provide valuable insights and recommendations to the government on how to combat these issues effectively. Through collaborative efforts, they can engage in constructive dialogues with relevant stakeholders, including government officials, trade organizations, and consumer groups, to raise awareness about the importance of supporting and protecting the homegrown footwear industry. This unified approach will strengthen their bargaining power and enable them to negotiate for favorable policies, incentives, and regulations that foster a conducive environment for local manufacturers to thrive.

Moreover, a strong alliance can also drive initiatives aimed at enhancing the competitiveness and quality of Nepali-made footwear. By sharing best practices, promoting innovation, and investing in research and development, the alliance can collectively elevate the standards of the industry, making it more attractive to consumers both domestically and internationally. The alliance can also facilitate knowledge-sharing and capacity-building programs among its members, fostering a collaborative environment that nurtures growth and excellence, stakeholders said. "Through joint marketing campaigns and promotional activities, they can create a distinct identity for Nepali footwear, showcasing its unique craftsmanship and cultural heritage to the world. Nurturing Nepal's homegrown shoe industry is nurturing Nepal!"


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