WASHINGTON, D.C. — In a significant shift for bilateral commercial relations, the United States has formally terminated duty-free access for 77 Nepali products following the expiration of the Nepal Trade Preference Program (NTPP) on December 31, 2025. Originally established by the U.S. Congress in 2015 as a critical recovery measure following Nepal’s devastating Gorkha earthquake, the program officially reached its sunset clause this week after a decade defined largely by underutilization.
Despite the program's initial intent to bolster the Nepali economy through preferential market access, trade data reveal a stark gap between the potential benefits and the reality of the last ten years. Out of the 77 eligible items identified for duty-free entry, Nepal managed to export only 29, leaving 48 items with zero recorded exports to the U.S. market. While the final years of the program saw modest gains in certain sectors, these small successes were insufficient to offset a decade characterized by volatile trends and inconsistent trade performance.
This expiration creates immediate economic headwinds for Nepali exporters, as it coincides with a new U.S. trade policy imposing a 10% additional tariff on Nepali goods. This shift is expected to further strain the competitiveness of Himalayan products in the North American market, making it increasingly difficult for local businesses to maintain their presence abroad.
Market analysts and trade experts attribute the program’s failure to deliver meaningful results to several systemic bottlenecks. They cite a selection mismatch where the eligible products often did not align with Nepal’s actual comparative advantages, alongside chronic supply-side constraints such as low production capacity and high logistics costs. Furthermore, many small and medium enterprises (SMEs) remained unaware of the program's benefits, while those who were interested often found the complex procedural requirements and stringent "rules of origin" standards too difficult to navigate.
As the duty-free window closes, the focus now shifts to the Nepali government and the private sector to explore new bilateral trade agreements. Industry leaders emphasize that enhancing the quality and competitiveness of exports will be essential for Nepali businesses to survive in a higher-tariff environment.
