Nepal is one of the least developed countries of the world. The development process of country is directly affected by the trade structure of respective country. Nepal’s trade is directly affected by China and India’s policy and rules. The geographic structure is the main difficulties for import and export trade with other countries. Nepal is facing with some trade difficulties which can be classify
Macro level difficulties include geographical structure; legal, political, economic and technological environments etc…
2. Micro level
Micro level difficulties include social cultural environment, internal corruption, research, human development indexes etc..
Nepalese politics is seems to be unstable for eleven years. But it is highly unstable after peoples movement in 2006. Nepal is also in a transitional phase. Government policies are also unstable. Due to Maoist war in 1996, different trade difficulties were arises. Establishment of business becomes more difficult. Business Company has to pay more charge due to war. Different strikes during war make difficulties. Black money transactions become higher. Regulatory mechanism in cross border trade become lengthy and strict. Due to decrease in internal production Nepal have to import more. Finally, trade difficulties of Nepal has increased.
The growth rate of GDP is also decreasing since 1996. Different unnecessary trade unions were established. They forced to provide more wages and salary to employer. Therefore, the productions of international goods are highly affected. During the trade. India, United states, China and other countries reduced their monetary support after the dismissal of Nepalese legislation in 2002. Establishment of any business has become very challenge able after the peoples movement in 2006 politics of Nepal.
The geographic structure of Nepal is more difficulty in cross border trade. Nepal is land locked country which is covered three sides from India and one side from China. Road transportation is the cheapest transportation in Nepal. But road can only connect to India and China. While transporting the product to third country Nepal have to depend on air medium. The air cost is much high which increases prize of product. While utilizing the cheap media of transportation of India and China the processing of passport and visa policy increases the time as well as cost.