India and Nepal share a significant trade relationship, with India being Nepal’s largest trade partner. Export companies looking to expand their business footprint in Nepal should be aware of important facts to facilitate the export process. This blog will highlight five crucial facts for India-to-Nepal export and provides valuable insights for a seamless trading experience. You will also get to know of exporting goods from India to Nepal along with documents required for the same.

5 Facts of Exporting Goods to Nepal

When it comes to trading with Nepal, India holds a significant position as its largest trade partner. As Indian companies explore business opportunities and aim to expand their exports to Nepal, it is crucial to be aware of certain facts that can facilitate the export process. Let’s understand these facts that will help streamline the export procedures and ensure a smooth and successful trading experience between the two nations.

• Registered Companies: 

Only registered manufacturing companies or trading firms from India are allowed by the Government of Nepal to trade in Nepal. It is essential for exporters to ensure their company is registered before engaging in trade activities with Nepal.

• Designated Routes: 

Indian trading and manufacturing companies can route their cargo through 22 designated routes on the India-Nepal border. These routes are determined by the respective governments of India and Nepal, ensuring smooth and regulated trade between the two countries.

• Document Requirements: 

Exporting goods to Nepal requires specific documentation. These include an authority letter from an authorized Customs Agent, delivery order from the Terminal Management Company (for inland clearance depots), invoice of trade, Nepalese customs declaration, packing list, and specific cargo documents for goods such as plants, food products, chemicals, raw wool, and animals.

• Customs House Agent (CHA): 

Engaging an authorized Customs House Agent (CHA) can greatly simplify the customs and regulatory compliance process for India-Nepal trade. A CHA can provide guidance, assist with obtaining customs clearance, and ensure adherence to all necessary procedures, as permitted by the Governments.

• Payment Methods: 

Payments for exports to Nepal are typically made in Indian Rupee. However, under the in-bond process, payments can also be made through the Nepal national bank in a convertible foreign currency. Exporters need to be aware of the payment options and comply with the regulations accordingly.

Documents Required for Export to Nepal From India by Road or Other Means:

Ensuring the proper completion and submission of these documents will facilitate a seamless export process and compliance with the customs and regulatory requirements of Nepal. It is advisable to consult with customs authorities or engage the services of a professional customs agent to ensure accurate and timely documentation for a successful export to Nepal. Exporting goods to Nepal from India requires the following essential documents:

• Authority Letter from an Authorized Customs Agent: This letter authorizes a Customs Agent to act on behalf of the exporter in customs-related matters and facilitates the smooth clearance of goods at the border.

• Delivery Order from Terminal Management Company: In the case of inland clearance depots located at Biratnagar, Birgunj, and Bhairahawa, a delivery order from the Terminal Management Company is necessary to ensure proper handling and release of the goods.

• Invoice of Trade: An invoice detailing the transaction, including the description, quantity, value, and other relevant information of the exported goods, is required for customs and record-keeping purposes.

• Nepalese Customs Declaration: A customs declaration form provided by the Nepalese customs authorities needs to be completed accurately, providing details about the goods being exported, their value, and other required information.

• Packing List: A comprehensive packing list specifying the contents, quantities, and packaging details of each item in the shipment is essential for customs verification and efficient handling of the goods.

• Specific Cargo Documents: Depending on the nature of the goods being exported, additional cargo-specific documents may be required. These may include permits, certificates, or licenses for goods such as plants, food products, chemicals, raw wool, animals, etc., as mandated by Nepalese customs regulations.

How to Export from India to Nepal:

Exporting goods from India to Nepal involves following specific procedures and utilizing designated routes. Here is a step-by-step guide on how to export from India to Nepal:

• Register Your Company: Ensure that your trading or manufacturing company is registered and authorized to engage in trade activities with Nepal. Only registered companies from India are allowed to trade in Nepal.

• Prepare the Required Documents: Gather all the necessary export documents, including an authority letter from an authorized Customs Agent, delivery order from the Terminal Management Company (if applicable), invoice of trade, Nepalese customs declaration, packing list, and any specific cargo documents required for the goods being exported.

• Choose the Designated Route: Determine the designated route for transportation. Indian trading and manufacturing companies can route their cargo through 22 designated routes on the India-Nepal border. These routes are determined by the governments of India and Nepal to ensure regulated and secure trade.

• Engage a Customs House Agent (CHA): It is advisable to enlist the services of an authorized Customs House Agent (CHA) who specializes in customs procedures and regulations. The CHA will guide you through the customs clearance process, assist with documentation, and ensure compliance with the necessary requirements.

• Arrange for Transport: Select a reliable transportation method to move your goods from India to Nepal. This can be through road transport using trucks or other appropriate means of transportation. Coordinate with logistics providers to ensure a smooth and timely delivery of your goods.

• Clear Customs: Work with your CHA to complete the customs clearance process. Submit the required documents, pay any applicable customs duties or taxes, and undergo necessary inspections and verifications by the customs authorities.

• Receive Payment: Payments for exports to Nepal are generally made in Indian Rupee. However, under the in-bond process, payments can also be made through the Nepal national bank in a convertible foreign currency. Ensure proper coordination with your buyer to facilitate payment.

FAQs:

How can I export to Nepal from India?

To export goods to Nepal, you need to ensure that your company is registered and authorized for trade with Nepal. Prepare the required export documents, choose a designated route for transportation, engage a Customs House Agent (CHA) for assistance with customs procedures, arrange for transport, clear customs, and coordinate with your buyer for payment.

Is export to Nepal exempted from GST?

Exports from India to Nepal are generally exempted from Goods and Services Tax (GST). However, it is advisable to consult with tax authorities or a professional tax advisor for specific details and any updates related to GST exemptions.

Do we need an export license for Nepal?

No, a specific export license is not required for exporting goods to Nepal. However, your company must be registered and authorized by the Government of Nepal to engage in trade with Nepal.

What can we export from India to Nepal?

Various goods can be exported from India to Nepal, including industrial products, machinery, automobiles, electrical equipment, pharmaceuticals, textiles, agricultural products, processed food items, and consumer goods. The specific list of exportable items can be determined based on the regulations and requirements of both the Indian and Nepalese governments.

What are the three major imports of Nepal?

The three major imports of Nepal include petroleum products, machinery and equipment, and electrical goods. These imports are crucial for fulfilling the energy, infrastructure, and industrial needs of the country.

What items are tax-free in Nepal?

Nepal has a list of tax-exempt items that include essential food items, agricultural products, educational materials, health-related items, certain medicines, and basic necessities. It is advisable to refer to the specific tax laws and regulations of Nepal for a comprehensive understanding of tax-free items.

Is there GST on goods sold to Nepal?

GST is not applicable on goods sold or exported from India to Nepal. However, it is advisable to consult with tax authorities or a professional tax advisor for the most up-to-date information and specific details regarding the taxation of goods sold to Nepal.

What is the export tax in Nepal?

Nepal does not levy an export tax on goods being exported from the country. However, certain administrative charges or fees may be applicable for specific export procedures and documentation. It is recommended to consult the customs authorities of Nepal for accurate information regarding export-related charges and fees.