Nepal - PricingNepal - Pricing
Pricing formulas are based on the availability of similar products, the level of demand for the product in the local market, and total costs required to bring the product to market. Before selecting a pricing strategy, the exporter should obtain as much information as possible from local agents, market research, potential customers, and competitors. Exporters should factor in applicable tariffs and taxes, which are levied on all imported products. Examples include: customs tariffs ranging from 5 percent (for certain agricultural products) to 80 percent (for four-wheel vehicles); value-added tax (VAT) of 13 percent; and local development tax of 1.5 percent. For vehicle imports, an additional excise duty of 250 percent is levied on the gross value, which includes the invoice price, customs tariff, VAT, local development tax, and special tax. These tax rates were valid for FY 2018/19. While the 2018/19 budget raised duties on a number of items such as vehicles, mobile phones, and alcohol, they will remain the same under the 2019/20 budget. Interested businesses can request hard copies of the complete tariff schedule directly from Nepal’s Department of Customs, which also put up the latest schedule on their website: http://www.customs.gov.np/en/tariff.html.
Pricing structures in Nepal are erratic. Imported goods are priced higher than locally produced goods. Prices of imported goods reflect transportation costs and other mark-ups. Indian manufactured goods, when available, are cheaper than imports from more distant countries. When determining a price for U.S. products, the exporter should consider potential competition from India, which has an open border with Nepal. Chinese products – mainly consumer goods such as appliances, shoes, and textiles – are imported via sea or land. Products from the European Union, Japan, South Korea, and Taiwan are also popular and help determine the local price for goods and services. Profits in excess of 20 percent are considered profiteering and violate Nepal’s laws against black marketing. Enforcement of this law is erratic.
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Pricing structures in Nepal are erratic. Imported goods are priced higher than locally produced goods. Prices of imported goods reflect transportation costs and other mark-ups. Indian manufactured goods, when available, are cheaper than imports from more distant countries. When determining a price for U.S. products, the exporter should consider potential competition from India, which has an open border with Nepal. Chinese products – mainly consumer goods such as appliances, shoes, and textiles – are imported via sea or land. Products from the European Union, Japan, South Korea, and Taiwan are also popular and help determine the local price for goods and services. Profits in excess of 20 percent are considered profiteering and violate Nepal’s laws against black marketing. Enforcement of this law is erratic.