To encourage economic development after Nepal’s devastating 2015 earthquake, the USA granted special trade preference to Nepal and now offers DUTY-FREE TREATMENT to certain products, including:
- many kinds of handbags,
- sports bags;
- various carpets;
- scarves and shawls;
- and hats and other headgear.
You can save up to 20% on products made in Nepal. Follow the simple tips below to capitalize on this Trade Facilitation and Enforcement Act of 2015.
How do I take advantage of the Nepal Trade Preference?
1. Check to see if your products are included in this Trade Facilitation and Enforcement Act of 2015. Section 915 lists 66 subheadings of the Harmonized Tariff Schedule of products when made in Nepal that will receive duty free entry to the United States.
You can use this website (https://hts.usitc.gov/) 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. Buy items from Nepal on the list of 66 products and ensure that the manufacturing step in Nepal is adding at least 35% value and is more than simple combining or packaging operations.
3. Ensure your manufacturer in Nepal fills out a GSP Form A and Certificate of Origin, declaring your items as one of those on the list of 66 HS Codes, annotating Nepal trade preference with an “NP” next to the HS Code, gets it signed and stamped on export by the Nepal Customs department, and sends you copies.
4. Before your goods arrive, let your customs broker or shipping company know that your items are eligible for the Nepal Trade Preference and request they declare them accordingly.
How long will the trade preference last? Until 2025
Do other countries qualify for the Trade Preference? The Trade Preference only applies to products made in Nepal, shipped to the US. However, because Nepal is a Least Developed Country under the GSP system and a former conflict country, many countries such as those in the EU and Canada offer special duties discount to goods that come from Nepal. Each country’s rules may be different.
What if I am still charged duties? Purnaa has produced goods for many customers that qualify for the Trade Preference. However, a few customers have still been charged duties. We assume this is because a country specific Trade Preference is quite rare and few customs officials are aware of Nepal specific rules. If your goods mistakenly get charged import duties even though they are on the Trade Preference list, you can request a refund.
How do I know if my product is one listed in the Trade Preference? At Purnaa, we can advise you if your product is included in the Trade Preference, and we can even give some advice for product changes to help take advantage of the program. But in the end, it’s up to you to check that your product meets the classification criteria of the US HTS system. You can use this website (https://hts.usitc.gov/) 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”, your product is included in the Trade Preference Program.
Nepal is a country with higher than 40% unemployment, which leads to a people who are very vulnerable to exploitation. When you choose to manufacture at Purnaa in Nepal, not only can you save money with this trade preference law, but you will also help to employ marginalized people and survivors of exploitation.
At Purnaa, we love to make products for clients that value ethical manufacturing and transparent supply chains. So, check out the US-Nepal Trade Preference Program and consider manufacturing your products here in Nepal. This could be the beginning of a beautiful partnership.
Get a Production Quote Here to explore if Purnaa is a good fit for your manufacturing needs.