nepal trade issue 2 english1

8/17/2019 Nepal Trade Issue 2 English1

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NEPALTRADEIssue # 2

January 2012


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NEPAL TRADE

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IMPRINTPublisher:

Deutsche Gesellschaft fuerInternationale Zusammenarbeit (GIZ) GmbHNarayani Complex, 4th floor, P.O.Box 1457

PulchowkLalitpur, Nepal

T +977 1 55 552 89F +977 1 55 217 12

E [email protected] www.giz.de/nepal

Place and date of publication:Nepal, January 2012

Editor:Philipp Kruschel (Team Leader)

GIZ WTO/EIF-SPDeutsche Gesellschaft fuer

Internationale Zusammenarbeit (GIZ) GmbHNarayani Complex, 4th floor, P.O.Box 1457

PulchowkLalitpur, Nepal

T +977 1 55 552 89F +977 1 55 217 12

E [email protected] www.giz.de/nepal

Text:Kuber Chalise (THT)

Gabriele Schlaeger (TEPC)Puspa Sharma (SAWTEE)

Philipp KruschelBanu ShresthaVidha PradhanHimadri PalikheRup Kumar BK

Moheindu ChemjongJannu Chudal Sherpa

Photos/Graphics:WTO

Himadri PalikhePhilipp Kruschel

Ujjwal BajracharyaSuman DhakhwaRup Kumar BK

Layout:Jannu Chudal Sherpa

Translated by:Ramchandra Khatri

Printed by:S Printers

Disclaimer:Views expressed in Nepal Trade are those ofthe authors and do not necessarily reflectthe official position of GIZ or its member

institutions.

CONTENTS

Aid for Trade and Nepal

Silver Jewellery trade and Intellectual Property

Protection (IPR)

Aid for Trade could boost Nepal’s trade

Plans and policies of Silver Jewellery

The Silver Jewellery Industry

Starting a Silver Jewellery business - the Legal

aspects

Silver Jewellery in the making

Silver Jewellery making as an

occupation - an artisan’s perspective

The Project Advisory Group

10 Facts on Silver

International Demand for Silver Jewellery

News

Calender of Events

Dear Reader, After a successful 2011 for the GIZ WO/EIF-SP, we are full of optimism andhope for 2012. I would like to wish you, the reader, a very Happy New Year 2012.

After 2011 saw the publication of the first issue of Nepal rade magazine with afocus on Medicinal and Aromatic Plants and Essential Oils of Nepal, we are nowhappy to provide you with the second issue of the magazine. Yet again, we chose toprovide a special focus on one of the 19 identified products and services within theNIS 2010. Tis time: Silver Jewellery products from Nepal. We will showcasechallenges and opportunities this sector faces in Nepal as well as p rovide you withadditional background information on Aid for rade, Intellectual Property Rightsand other issues.

We hope you will find this issue as insightful and helpful a s the last one. Kindlydo provide us with your feedback and let us know, what else you would like to seecovered in future issues.

Happy New Year 2012!

Philipp Kruschel

EDITOR’S NOTE

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AID FOR TRADE AND NEPALAid for Trade is an initiative of the WTO designed to help the least developed countries to improve their traderelated skills and infrastructure needed to implement and benefit from the WTO agreement and to consequentlyexpand their trade.

What is Aid for rade?

Aid for rade (Af) is the World radeOrganization’s (WO) initiative for supportingthe Least Developed Countries (LDCs) toincrease their capacity in trade. Af helps LDCsto benefit from the WO agreements to expandtrade by supporting with trade related skillsand infrastructure. Further, Af emphasizes itssupport in the export of goods and services, inLDCs’ integration into the multilateral tradingsystem and in LDCs’ benefitting from liberalizedtrade and increased market access.

Te WO during the Hong Kong MinisterialConference in December 2005 initiated Afby forming a task force. In July 2006, thetask force recommended Af to focus on theneeds of the recipient countries. In addition,the task force also suggested Af to act as abridge between recipient countries and donors.Further, the task force also recommendedestablishing a monitoring body in the WO forperiodic review based on the information fromstakeholders.

Te Enhanced Integrated Framework (EIF)of the WO is the mechanism for the LDCsto access Af. Te EIF was established at the

WO in 2005 after reviewing the IntegratedFramework (IF) which was set up in 1997.

Te EIF, a multi-donor programme, supportsthe LDCs to improve their supply side capacityto make them more active in the global tradingsystem. Currently, the EIF is supported by amulti-donor trust fund, the EIF rust Fund,

with contributions from 23 donors to benefit47 LDCs.

Te WO plays a vital role in mobilizing Afby encouraging additional flows of Aid for radefrom bilateral, regional and multilateral donors.Te WO also encourages the mainstreamingof trade into national development strategies ofthe LDCs.

Cooperating Partners

Te Af ask Force, in 2006, recommendedthe Director General of the WO to form an

Advisory Group. Next, the Directorate Generalestablished an Advisory Group comprising ofdevelopment partners at the WO to coordinateamong the key players in the Af initiative.Te Advisory Group members are: the AfricanDevelopment Bank, the Asian DevelopmentBank, the European Bank for Reconstructionand Development, the IMF, the Inter-

American Developmen t Bank, the IslamicDevelopment Bank, the IC, the OECD,the UNCAD, the UNDP, the UNECA, theUNIDO and the World Bank.

Implementation of Aid for rade Based on the recommendation of the taskforce in 2006, the Af initiative moved intoits first stage of implementation in 2007.Further, the WO established a system ofmonitoring Af at the global, the donor andthe individual recipient country level to trackdown the implementation. Te Af task forcerecommended reviewing Af at the regionaland the global level based on the informationfrom stakeholders. Regional reviews offer a better understandingof Af as well as encourage the implementationplans. Tat reviews help to identify prioritiesand is a mechanism to best balance them withplans. Te WO conducted regional reviewson Af together with the regional banks andthe governments in Peru, the Philippines andanzania in 2007, and in Zambia, Jamaica andCambodia in 2009.

Te Monitoring Body conducts Global Reviewon Af twice a year. Te global review is asharing of the profiled-up information of theprevious regional reviews. Te purpose of theGlobal Review is to strengthen the Monitoringand Evaluation of the Af to provide a strongincentive for both the donors and the recipientsin advancing the Aid-for-rade agenda.

In addition, the global Af review takes stock of what is happening, identifies what should happennext, and improves the WO monitoring andevaluation. Te WO has conducted Af globalreviews in 2007, 2009 and 2011 in Geneva.

How Af can help LDC?

Economic growth is the most powerful tool toreduce poverty. In fact, trade is a major driving

force to boost economic growth in any country.Te importance of trade for development ofLDCs was emphasized by the internationalcommunity at the 2002 ‘UN Conference onFinancing for Development’ in Monterrey,Mexico. However, the discussion on Af at the

WO started much earlier during the Uruguayround. Later, in 2005 the United Nations(UN) Millennium Project ask Force on radeconcluded that the Af was an essential part ofthe package and that such a funding is additionalto the current aid flow.

Nepal and many other low-income countriesface obstacles in expanding and diversifyingtheir trade. Policies pertaining to trade reformsand liberalization in these countries havenot always delivered the expected benefits interms of trade expansion, growth and povertyreduction. Te international community has

agreed to expand and improve aid for trade tohelp LDCs build supply-side capacity and trade-related infrastructure. Eventually, this will helpLDCs to expand their trade and to benefit fromtheir integration into the world economy.

Aid for rade in Nepal

Nepal is a candidate for Af because it is aLDC, a WO member and has weak supplyside capacity. Nepal joined the IntegratedFramework of the WO in 2002 and undertookthe Diagnostic rade Integration Study (DIS)

with the support of the global trade body.Nepal government approved the DIS in

August 2003. Poverty Reduction StrategyPaper (PRSP) incorporated a number of DISrecommendations on trade issues in May 2003.EIF has Af funding arrangements as WindowI and Window II, also known as ier 1 and ier

2. Te Window I is a financing arrangement thatsupports in-country capacity building includinghuman resource of National Implementation

Arrangements, providing operational supportand updating DIS. Whereas, Window IIfinances for priority activities identified in theDIS, its update, and its Action Matrix.

he DIS was updated as the Nepal radeIntegration Strategy (NIS) with the supportof the UNDP. Nepal government approvedthe NIS in June 2010. NIS 2010 isthe effort of the Government of Nepal tostrengthen its ability to coordinate andmanage rade-Related echnical Assistanceand Af by implementing the mechanism ofthe Enhanced Integrated Framework.

Under the EIF’s support measure, thegovernment launched two Window II projects;the rade-Related Capacity Building Project andEnhanced rade Related Capacity (ENReC)project between 2005 and 2008.

Te Nepal government established NationalImplementation Arrangements (NIAs) in 2008and 2009. Government of Nepal establishedthe following structures according to the EIFguidelines.1. Te National Steering Committee (NSC)2. Te National Implementation Unit

(NIU): based in the MoCS, with associatemembers in key line Ministries (‘extended’NIU);

3. echnical Committees of key lineMinistries to support the NIU;

4. Te EIF focal point to lead the NIU andliaise with DPs and Geneva/WO/EIF

and Af Initiatives;5. a donor facilitator

Major donors contributing Af in Nepal are World Bank, Germany, Japan, Switzerland andNorway. Disbursed amount of Af in Nepal hasalmost doubled to USD 173.55 million in 2011from USD 89.1 million in 2009, according toOrganization of Economic Cooperation andDevelopment (OECD).

Aid for rade Flow in Nepal (USD’000,2009)

Source: OECD,2011

Aid for rade has been committed to supportin rade policy and regulations, Economicinfrastructure, Building productive capacityand rade related adjustments. In addition,specific sectors covered by Af commitmentsare transport, storage, energy generation/supply,agriculture, forestry, fishing, banking, financialservices and industry.

Disbursement of Af in Nepal (USD ‘000,

2009)

Source: OECD,2011

In November 2010, the Government of Germany was selected as the new donor facilitator. At thepolitical level, the German Embassy fulfills thisrole while at the technical level, the DeutscheGesellschaft für Internationale Zusammenarbeit(GIZ) GmbH, through WO/EIF-SupportProject, is responsible for undertaking therole of donor facilitator to facilitate Aid forrade in Nepal.

Rup Kumar BK, GIZ

For more information:

www.enhancedif.org/EN%20web%20pages/ Where%20we%20work/Nepal.htm

www.oecd.org/dataoecd/5/12/48324820.pdf

Photos: WO


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Any physical asset such as a house or a vehiclethat one acquires through some legal meansis ones physical property. Similarly, designs,compositions and processes that one creates and

which did not exist before is ones intellectualproperty (IP). Te World Intellectual Property

Organization (WIPO) defines IP as “creationsof the mind: inventions, literary and artistic works, and symbols, names, images, and designsused in commerce”. People have rights overtheir property, either physical property or IP .However, there are differences in mechanisms ofestablishing rights over them.

IP is divided into two categories: (i) industrialproperty, which includes patents, trademarks,industrial designs and geographical indicationsand (ii) copyrights. Tese different forms ofIP are used according to the types of creation.For example, while patents are used to protectinventions such as new medicines and itsmanufacturing process, trademarks are used toprotect and differentiate between the identityof a company (or its products) from the others,such as the combination of special symbolsand names used to distinguish between cell

phones produced by different companies.Unique designs of a company’s products, forexample, the design of the VW Beetle car, areprotected through industrial designs. Similarly,geographical indications are used to protectthe identity of a product owing to its specialcharacteristics based on its geographic origin,e.g., Darjeeling tea. Copyrights are used toprotect creations such as literary works, art,music, and so on.

Absence of IP protection leads to imitation oforiginal products, designs, logos, names andpiracy of films, music and literary works, causingdamage to the originators. Strong IP protection,on the other hand, helps companies increasetheir market share given that the company and

its products have earned good reputation in themarket already. Such an important link betweentrade and Intellectual Property protection ledto the Agreement on rade-Related Aspects ofIntellectual Property Rights (RIPS) becominga part of the single undertaking of the Worldrade Organization (WO) when it wasestablished in 1995.

Seeking IP protection, however, is not easy.It demands clear understanding of the legalprocedures and huge amounts of resources.Moreover, IP should be registered in everycountry where protection is sought. In thesecontexts, there is an importance of IP p rotectionfor the Nepali silver jewellery sector.

Silver jewellery is one of the 19 productsidentified by the Nepal rade IntegrationStrategy (NIS) 2010 as having export potential.NIS has suggested that IP should be used asa tool for most of the 19 products, includingsilver jewellery, to enhance their exports. Te

possible IP vehicle suggested by NIS in thecase of silver jewellery is “traditional knowledgeor design” and the associated Action that theGovernment of Nepal should take is to legislateindigenous knowledge laws.

Innovations and creations of local andindigenous communities are also IP. Tey shouldbe protected as traditional knowledge, but thisis not the correct vehicle for IP protection ofNepali silver jewellery. Te suggestion to usetraditional knowledge or design as the IP vehiclefor silver jewellery could be based on the factthat people engaged in manufacturing silver

jewellery in Nepal are mostly ethnic minoritiessuch as sunars. Tey possess unique skills inmanufacturing fine jewelleries using handtools, passed on to them through generations.Tere is no denying that such traditional skillsshould be preserved and protected. But there is

not much fear regarding the imitation of theirskills by others. Tey can be passed onto othersonly through rigorous trainings. Terefore,the concern is not regarding the imitationof traditional knowledge and skills, rather ofdesigns, logos and names. Hence, IP vehiclesthat are more relevant for silver jewelleries aretrademarks and copyrights.

rademarks help protect br and names, logos andcertification marks; copyrights help protect theartistic aspect of jewellery like designs. However,since each piece of jewellery will have a differentdesign from the rest, to seek IP protectionfor every design, each has to be registered forcopyright protection. In the present context,this is virtually an impossible task for Nepali

entrepreneurs since the small volume oftheir trade does not enable them to seek suchprotection. Terefore, the most appropriatevehicle to seek IP protection for Nepali silver

jewellery at present is trademark. Registering atrademark will be useful in restricting imitationsand creating niche in a market given that qualityof products is ensured (See Box).

Source: Sharma, Puspa and Niraj Shrestha. 2010. Silver

Jewellery Exports from Nepal: Status and Way Forward.

A study report prepared for SAWEE and submitted to

GIZ (unpublished).

rademarks also carry additional benefits such

as providing product quality assurance and

traceability of the manufacturer to buyers, which

provides trademark owners a competitive edge

over the others. Terefore, Nepali entrepreneurs

who export silver jewellery substantially in

international markets should register trademarks

in major export markets. However, they should

note that ensuring quality of their products is

the key to benefit from such IP protection.

Puspa Sharma

Te author is Programme Coordinator, South AsiaWatch on rade, Economics and Environment(SAWEE), Kathmandu.

Importance of trademark

Suman Ratna Dhakhwa from Lalitpur, is the

owner of a small enterprise that manufactures

and exports silver jewellery, including

jewelleries mixed with other metals. His

major export market is Japan. He used to

export his products under the brand name

“Valhalla”, which had earned good reputation

in Japan. When he tried to register his brand

name sometime ago in Japan, he found that it

was already registered by someone else, and he

was restricted in selling his products under the

same name. He then got another brand name

“Suman Dhakhwa”, including a logo he hadcreated and was using as trademark, registered

in Japan and also in Nepal. Since then, he has

been selling his products under the registered

name and logo and has not faced any hassle

in the Japanese market. Because of the unique

designs and good quality of his products, he

has earned good reputation among traders

and users of silver jewellery, mainly wedding

rings, in Japan. He has found that buyers look

specifically for his brand name now and even

place special orders.

SILVER JEWELLERY TRADE AND INTELLECTUAL PROPERTYPROTECTIONIntellectual Property protection is important for any thriving industry to make a mark at the global l evel.

AID FOR TRADE COULD BOOST NEPAL’S TRADE

Focus should be made in the prioritised sectors. Nepal Trade talks to the Secretary of MoCS on AfT and Nepal.

Increase in the Aid for rade (Af) resourceallocation to Nepal might bring change in thetrade sector in the next five years.

Af provides immense opportunities Mr. Purushottam Ojha, Secretary of theMinistry of Commerce and Supplies (MoCS)says that there has been an increase in the flowof Af, though Nepal is not in the list of top tenrecipients of Aid for rade countries. However,he thinks that the Af flow in Nepal is notin the priority sectors due to lack of nationalawareness and capacities in sensitising donors onthe prioritised sector. “Efforts are being made toaware the donors on these issues,” the Secretary

adds. “But there is still a huge gap between Aidfor rade commitment and disbursement.”Nepal received a total of USD 173.55 millionunder Af in 2011, almost double from twoyears ago, when it received USD 89.1 million,according to the OECD global database. “Wehave resources under the Enhanced IntegratedFramework (EIF) and donor agencies likeUSAID, ADB, World Bank and GIZ have beensupporting Nepal, but being a recipient country,Nepal needs to utilise these funds and resourcesunder the Af progr amme.”

Goals of Af

Te main goals of Af are to achievesustainability in trade and alleviate poverty.

“Sustainability in trade entails that there hasto be an increase in the level of export,” thesenior bureaucrat says. “For increasing exports,Nepal has to have sufficient quantity and valueof goods and services.” However, he opines thatthe short-term focus should be on quick winproducts and services which can harness benefitsinstantly. Long-term efforts should be made indeveloping trade related infrastructure, businessenvironment and skilled human resources.

According to him, it may take some four to fiveyears for Nepal to develop this infrastructure.“Te development in the trade sector will helpreduce poverty.”

On supply side constraints

Mr. Ojha elucidates that Nepal has comparativeadvantages but the lack of infrastructure and anon-conducive business environment makesNepal uncompetitive in the global market. Mr.Ojha goes on to explain that the NIS 2010

was enacted with the purpose to convert Nepal’scomparative advantages into competitiveadvantages. In the NIS 2010, 19 sectorsand their potential markets were identified toenhance the supply side capacities. “It is not justthe supply side constrains but the inability ofthe Country to take advantage of the increasedmarket access,” he thinks. Te country needshuge investment and increased production asonly market access does not lead to increasedexports of LDCs like Nepal. “Tis is basically due

to non-tariff barriers like standards and qualityof goods . Even with a zero tariff preference,

we cannot utilise the market due to stringentrules.” International companies have set certainstandards and when those standards are notmet, they do not accept our goods, the secretarysays. “o meet these standards, Nepal must haveincreased quality and service facilities and thenecessary infrastructure.” He informs us thatsteps are being taken to form an AccreditationBoard, improve laboratory facilities and receiveaccreditation at the international level.

Working with Private Sector

Te private sector and the Government are

like two wheels of a vehicle and absence of anyone of them makes the vehicle non-functional.

According to Mr. Ojha “A strong partnershipmust exist between the two. We have alwaystaken the private sector in confidence and theyhave always been on board”. Te Governmenthas been working in coordination with FNCCI,CNI and the Nepal Chamber of Commerce.Te government holds extensive consultations

with all stakeholders prior to taking decisions.“Te role of Public Private Partnership (PPP) isvital to develop sustainable practices,” he says,adding that effective social and infrastructuraldevelopment is delivered through the PPPapproach. Partnerships allow the private sectorto share costs and risks while maintaining apublic interest, whereas the Government ensures

Photo: Philipp Kruschel

“ Funds from Af shouldnot be limited to studiesand research. We have torather focus on developmentof infrastructure. Tedirect beneficiaries shouldbe the producers and theenterprises .”

Photos: Himadri Palikhe


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maintaining pre-determined levels of services without playing a direct management andoperational role. PPP offers potential benefitslike a well-structured partnership in risks ofcost-overruns including the private sectorbearing time over run costs instead of taxpayers.Tese partnerships also offer government greaterflexibility to tailor projects to best meet local

needs. Mr. Ojha opines that effective PPPhelps the country to take advantage of the

Af resour ces.

ier II project

ier II projects address the pr iorities of the NIS2010. Its key purpose is to collaborate with allinterested public, private and non-governmentagencies to develop bankable ier 2 proposalsfor implementation of actions identified in theNIS. “ier II is one of the windows where

we can get support from the EIF rust Fund,”says Mr. Ojha. Te secretary maintains thatvery few countries have ier II projects in placeand Nepal is soon going to be one of them. Heexplains that the focus has shifted from software

activities like research to hardware activitieslike road connectivity, warehouse facilities, bigdry ports and market development, laboratoryfacilities for tests and certification and internalcapacity development. “Funds from Afshould not be limited to studies and research.

We have to rather focus on the development ofinfrastructure. Te direct beneficiaries should

be the producers and enterprises,” he adds. Tegovernment has published an Expression ofInterest inviting stakeholders to implement the258 actions according to NIS. he NationalImplementation Unit (NIU) will facilitatethe process.

Way Forward

Mr Ojha opines that there is still much tobe done in the field of enhancing the tradecapacities of Nepal. Efforts are being made toget more Af resources for product and servicesdevelopment and national capacity building. TeGovernment has passed the Board of Investment

Act and announced Nepal Investment Year2012/13 to attract foreign direct investment in

large infrastructural projects of over ten billionNepali Rupees.

Te Government has signed the BilateralInvestment Promotion and Protection

Agreement (BIPPA) and revised the Doubleaxation Avoidance Agreement (DAA)

with India to create a favourable business

environment, he adds. Despite regular hoursof power outage, frequent labour unrest andbureaucratic hassles, Mr. Ojha is optimistic thattrade and export in Nepal will see a growth inthe next five years due to more Af resourcemobilisation in the priority sectors.

Jannu Chudal Sherpa, GIZ

For more information

www.mocs.gov.np

PLANS AND POLICIES OF SILVER JEWELLERYSilver Jewellery is a handicraft item produced largely by micro and the small-scale enterprises. As there are noparticular laws and regulations governing the manufacturing and export of Silver Jewellery in the country, theplans and policies relating to the handicrafts sector apply to silver jewellery as well.

rade Policy 2009

Te key objective of the rade Policy 2009 is

to support economic development and povertyalleviation initiatives through enhancedcontribution of the trade sector to the nationaleconomy. It is formulated in a way that addressesissues such as dynamism in internationaltrade, the country’s affiliation in regional andmultilateral trading systems, sanitary andphytosanitary measures (SPS), technical barriersto trade (B) among others.

Te rade Policy 2009 has incorporated anumber of working policies and strategies forhandicrafts sector. Te Policy has given specialfocus to handicrafts. Since there is no separatesection for the silver jewellery sector:

• Assistance will be given to develop,pashmina, woollen products, silverproducts, metal products and handmadepaper that are being exported in largequantities.

• Programmes will be conducted underthe aegis of Federation of Handicraft

Association of Nepal and with thesupport of Government of Nepal forresearch activities and trainings onproduct diversification, designing,quality development and market accessof handicrafts. Moreover, a HandicraftDesign and Development Centre willbe developed as an institute in providingservices on designing.

• Te payment system in handicrafts export will be made simple by reviewing exportsagainst the advance payment and letterof credit (L/C). Special provisions will bemade to allow imports of samples, andpurchases under buy back L/C and exportsunder buy-back arrangement.

• Exports of handicrafts other than thoseexported under the letter of credit willbe allowed on the basis of the documentsagainst payment.

• Provisions will be made to refund dutybased on a flat rate specified in proportionto the export value for making the dutydraw back practical and effective.

• All agencies issuing certification andrecommendations required for exportinghandicrafts will be brought at one place tosimplify the procedures.

• All government agencies like customshouse, Department of Archeology,security police and others will be pooledat one place to facilitate onetime customsinspection and sealing.

• Archeological examination of handicraft

products will be made hassle free andsimple in coordination with the concernedagencies.

• Comprehensive programmes will belaunched in coordination with the Ministryof Forest and Soil Conservation and theForest Product Development Committeein consideration of the economic activitiesstemming from the production andcollection of Lokta used in the productionof Nepali paper products in rural areas.

Te rade Policy 2009 also specifies thefollowing strategies that apply to Precious/semi-precious gems and stones, and gold and silverornaments:

• Imports of raw materials required forproducing ornaments will be made simpleand duty free by adopting a separate specialpolicy for the production, developmentand export promotion of precious andsemi-precious gems and stones, and goldand silver ornaments.

• Te production, import-export and re-export of ornaments made of preciousmetal, gems and stones will be facilitatedby encouraging mining extractions ofprecious and semi-precious gems andstones.

• ax and customs duty will be waived on theimport of machinery and tools necessaryfor industries producing and exportingprecious and semi-precious stones andornaments.

• Production of ornaments will beencouraged by targeting particularmarkets.

• Additional promotional activities will be carried out for availing exportopportunities through provisions of capitalnecessary for producing and maintainingsufficient stock of various types of gemsand stones, and gold and silver ornaments.

• rainings will be given to craftsmen of goldand silver ornaments to enhance their skill.

Periodic plans

None of the periodic plans prior to 1997had specific plans for the development of theNepali silver jewellery industry. Te Ninth Plan(1997–2002) laid emphasis on the productionof handicrafts in line with international demandand preferences. Te Plan envisaged conductingtraining programmes to develop traditionalNepali-featured products as well as products inmodern/ contemporary designs. It emphasizedimplementing programmes to provide relevantinformation to manufacturers

and traders so that good quality products basedon international preferences could be producedand exported. Similarly, the enth Plan (2002–2007) sought to emphasize quality promotionof traditionally developed exportable itemsincluding handicrafts.

One of the strategies of the Tree Year InterimPlan (2007–2010) was to give special emphasison the production and export of handicraftsbased on traditional skills. It sought to studyand complete preliminary efforts for theestablishment of a separate promotion centrefor the production, processing, and export ofsilver jewellery, among others. For this, it statedthat a separate policy would be prepared withregards to import of raw materials, control ofproduction or processes, local sales, export,custom processes and duty incentives. Tepolicy emphasized training domestic humanresources and establishing an integratedtechnical institute in collaboration with theprivate sector for quality improvement, productdevelopment and diversification.

Te second Tree Year Plan Approach Paper(2010-2013) does not contain any specificplan or programme relating to the handicraftor the silver jewellery sector. However, the Planidentifies the following priority sector:

• Priority will be accorded to employmentcreation and economic growth byproviding priority to agriculture sector,tourism, industry, and export trade

• High priority will be accorded to nationallyimportant priority projects and those that

will contribute directly to the relief ofthe people.

Source: i) Silver Jewellery Exports from Nepal:Status and Way Forward. A study report preparedby SAWEE and submitted to GIZ (unpubli shed).ii) rade Policy, 2009: published by Governmentof Nepal, Ministry of Commerce and Suppliesiii) Tree Year Plan Approach Paper (2010/11-

2012/13)

Vidha Pradhan, GIZ


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THE SILVER JEWELLERY INDUSTRY

Opportunities and challenges.

It has been estimated that the Silver JewelleryIndustry can contribute one fourth to thetotal handicraft export of Nepal. However,this potential has not yet been realized due tovarious constraints in the sector. According toTe Nepal rade Integration strategy (NIS)2010, the annual production of Silver Jewelleryin Nepal is 15 - 20 Metric onnes (M) whilethe annual production capacity is estimatedat 50 M. According to the Federation ofHandicrafts Association of Nepal (FHAN), 527firms and companies were directly involved in

jewellery production and export in 2007. In thefiscal year (FY) 2009-10, the country exportedabout US$ 4.7 million worth silver jewellery

which accounted for about 13 p ercent of thetotal Nepalese handicraft export.

Tough not very substantial in terms of itscontribution to the total merchandise export,the sector, nonetheless holds a special placein the Nepalese economy, as it createsemployment opportunities, directly andindirectly. It also has substantial potential for

increasing exports and empowers ethnic andindigenous communities economically.

According to the Nepal Gold and Silver Dealers Association, there are currently more than

2500 entrepreneurs working in the jewellerysector. In the NIS 2010 it is estimated that itis currently providing employment to 10,000craftsmen directly. Te strategy reported thatit is estimated, that Nepal adds around 40-50percent value to silver while exporting it as

jewellery, which also makes it eligible for thegovernment’s cash incentive of three percent oftotal exports revenue.

Tere is a possibility of further value additionin silver jewellery by adding gemstones. Tegovernment can provide proper facility formining and refining of gems that could createadditional employment in the country. Tus theSilver Jewellery industry could be an economicdriver of Nepal.

International and Domestic Demand

Te International rade Center’s ‘ExportPotential Assessment in Nepal’ identified worldmarket prospects for Silver jewellery as veryfavourable. Te most attractive markets for

Nepalese Gems and Jewellery are some EUcountries, the US, Hong Kong, and India.

Nepal has a number of competitive advantageslike low labour cost, unique traditional design

and handmade quality in the sector which it coulduse to enhance its market share internationally.

A skilled craftsman earns around US$250per month on average, which is less than incompeting countries such as India and Tailand.Similarly, the Unique Selling Point for Nepalesesilver jewellery is its traditional design which iscompletely handmade with traditional process.

Nepal has good export potential to the top fourattractive markets as identified in the NIS -Hongkong, USA, Germany and UK in termsof growth in demand for Silver Jewellery. Othermajor markets grant duty-free access under theMost Favored Nation (MFN) status to Nepalesesilver jewellery. Te EU offers 2.5 per cent,the US offers 5-13.5 percent, Japan offers 6.2percent, Canada offers 5-8.5 percent, and Indiaoffers 10 percent duty free access to Nepal inSilver Jewellery.

According to a report by SAWEE on Silver Jewellery Exports from Nepal, d uring 2006–

2008, global exports of silver jewellery werein the range of about US$3 billion to aboutUS$5 billion annually. Te growth rate forsilver jewellery even during the pre-recessionera shows that there are good prospects for the

Photo: Rup Kumar BK

international trade of silver jewellery. However,Nepal needs to reap benefit from this growingexport potential.

Apart from the International market, thedomestic market looks equally promisingfor silver jewellery. Silver, as ornament ortraditional artifacts, is high in demand. Goldis becoming expensive fueling the demand of

silver ornaments, apart from its own popularityamong the young generation and expats livingin the country, since it is affordable and trendy.

According to tradition, some communities ofNepal like Newars have a tradition of givingsilver artifacts as a gift during their daughter’smarriage creating regular demand for silverduring the wedding season.

Challenges

Silver Jewellery is not free from challenges. Temajor constraints are - access to raw materials,cadmium mixing, lack of skilled labour,meeting large volume demands, internationalcompetition, lack of export-friendly legislationand inadequate Intellectual Property Rightsprotection systems.

Nepal Rastra Bank sells silver only in bulk. TeCentral Bank requires that firms possess a Value

Added ax (VA) registration to be eligible forpurchase. Te provisions of the Central Bank deterSmall and Medium Enterprises (SMEs) to procuresilver from banks. Te buyers opt to purchase silverfrom local markets even if these markets do notguarantee the purity of silver. Te domestic supplyof required raw materials like raw silver, gems andprecious stones, and the tools required for theproduction of Silver Jewellery is not enough for largevolume export. Te craftsmen are using traditionalartistic design, skills and techniques only and notlooking to expand their market commercially.

Cadmium mixing into silver jewellery hasbecome yet another challenge in the recent

years. Cadmium is a toxic metal that is difficultto separate from silver. It is known to causeallergic reactions to the skin and the inhalationof its fumes causes serious damage to therespiratory tracts and kidneys. Te EU, whichis Nepal’s second largest buyer of silver products,has explicitly stated that it will ban the entry ofsilver goods from Nepal if they are found mixed

with cadmium. In order to test for cadmium,

the Government of Nepal in partnership withthe FHAN and the Nepal Bureau of Standardsand Metrology established a testing facility.However, the machines in this testing facilityhave its own limitations in terms of the depthof its penetration.

Similarly, the pool of Nepalese craftsmen hasshrunk considerably due to the lack of awarenessof the potential that their profession holds. Lackof enough skilled craftsmen has created p roblemsfor exporters to accept large orders. With thelimited supply of qualified Nepalese craftsmen,

jewellery producers have been heavily dependenton immigrant jewellery makers, leading toboth limited employment opportunities forNepalese as well as losing valuable knowledgeof traditional designs to the migrant workforce.

Nepal is facing tough competition from other

countries like India, Tailand, Sri Lanka, Mexico,and Indonesia. Unlike its competitors, Nepal hasyet to conduct market research to identify newmarkets for the Nepalese silver jewellery.

According to the findings of the IC’s assessment,there is also an absence of export-friendly andtransparent legislation and simplified proceduresto facilitate mining, processing, manufacturing,exporting, importing, re-exporting of preciousmetals, gems, stones, and jewellery.

Due to the inadequate Intellectual PropertyRights (IPR) protection system in the country,Silver Jewellery designers are unable to protecttheir designs (both old and newly developed) tosecure their rights. Entrepreneurs complain that

apart of domestic copying, competing countriesare also copying Nepalese design and producingit in mass scale using specialized machinery.

Nepal’s small-scale Silver Jewellery producersare limited in their capacity to manufactureand export in volume. It is believed that fullautomation of the manufacturing process andexporting in bulk from Nepal is not feasible

mainly for two reasons: (i) Nepal’s market forsilver jewellery abroad is due to its handmadenature and good quality. (ii) Countries suchas India, Tailand and Indonesia have alreadymechanized their manufacturing process and areable to export in large quantities. So, Nepal maynot be able to compete with these establishedcountries in terms of both cost and volumeeven if it got into machine manufacturing.Terefore, Nepal needs to come up with a soundpromotion strategy that capitalizes on its corestrengths and is able to benefit from the g rowing

jewellery market.

In order to address the challenges, thegovernment and the private sector are workingtogether like establishing testing labs, andproviding trainings to craftsmen. Similarly,the Ministry of Commerce and Supplies isdeveloping and implementing an action plan

for the overall development of the sector withsupport from GIZ WO/EIF – SP.

A Project Advisory Group (PAG) consisting ofthe stakeholders in the sector has been formedto support the project in its interventions. TePAG has developed an action plan consistingof 19 activities that focuses on pre-requisitesof the sector like the upgrading of labs forquality testing, capacity building of designersand craftsmen and developing market linkages.More details can be viewed/ downloaded from

www.nepaltrade.org.

Himadri Palikhe, GIZ

“ Silver Jewellery industry could be

an economic driver of Nepal .”



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STARTING A SILVER JEWELLERY BUSINESSTHE LEGAL ASPECTSA step by step guide.

1. Register with the Metropolitan Office/Sub-Metropolitan Office.

All businesses are required to register with therespective Metropolitan Office. Te followingdocuments need to be submitted for registration:

1. An application form for the proposedshop/company.

2. A copy of the proposed owner’s citizenshipcertificate.

3. 2 passport size photos.

4. Registration fee: Rs. 1000 for a silver jewellery shop and Rs. 10000 for amanufacturing company.

Upon the submission of the documents, theMetropolitan/Sub-Metropolitan Office issuesthe business registration certificate to theapplicant. Tis certificate needs to be renewedon an annual basis. Te annual renewal fee is thesame as the registration fee. A business enjoys adiscount of 5 percent on the renewal amountif it is done within Shrawan (mid July to mid

August). Failure to renew at the stipulated timeleads to a fine.

For more information, visit:www.kathmandu.gov.np

2. Next, depending on its nature and type,a business then has to be registered with therespective department/s of the Governmentof Nepal.

• Department of Commerce

rading companies are registered with theDepartment of Commerce. Basically, theseare businesses that trade in different kindsof products sold to consumers, businesses orthe government agencies. Tese companies

buy a range of products, maintain a stock ora shop, and deliver products to customers.For the registration of trading companies, thefollowing documents must be submitted tothe Department of Commerce, Babarmahal,Kathmandu:

• A Citizenship Certificate of the proposedshop owner.

• 2 copies of passport size photos of theproposed shop owner.

• Registration fee on the basis of theauthorized capital of the shop as follows:

- Rs. 700 for up to Rs 1 lacs of authorized capital- Rs. 2100 for up to Rs 3 lacs ofauthorized capital- Rs. 4100 for up to Rs 5 lacs of authorized capital

For more information visit:www.doc.gov.np

• Department of Cottage and SmallIndustries

Silver jewellery manufacturing company likemost small scale businesses in manufacturing,tourism, energy, agricultural, service andconstruction need to be registered with theDepartment of Cottage and Small Industries(DCSI). o register with DCSI, one is required

to submit the following documents:

• An application for the registration.• A copy of the citizenship certificate.• 2 copies of passport size photos.• A copy of ‘lalpurja’ or land ownership

certificate.• A letter of recommendation from VDC/

metropolitan office.• An agreement paper from all neighbouring

land owners of the business site.• An agreement paper from other relevant

entities if required.• Stamp of Rs. 5.

For more informtion visit:www.dcsi.gov.np

Photo: Ujjwal Bajracharya

o get started in the silver jewellery business, as an independent legal entity, the chart below provides a step-by-step guide to the process involved.

However, the order of the corresponding institutions may vary depending upon the nature and the type of business.

3. Office of the Company Registrar

A private company has to be registered withthe Office of the Company Registrar, Ministryof Industry, ripureshwor. Te followingdocuments need to be submitted for theregistration of a private company.

• An application in the format as prescribedby the Ministry of Commerce and Supplies‘ANUSUCHI 1’, along with a 5 rupeesstamp attached to it.

• wo copies of Article of Association in theformat as per ‘ANUSUCHI 2’ in Nepalilanguage.

• wo copies of Article of Memorandumin the format as per ‘ANUSUCHI 3’ inNepali language.

• Attested copies of the citizenship certificatesof the founder shareholders.

• In case of a private company a copy of themutual agreement among the foundingpartners (if any).

• If the founder company is a Nepaliregistered company, then the followingdocuments need to be submitted as well:

– A copy of the company registration certificate.– A copy of the decision of the managingcommittee regarding details of the investmentto be made upon the aspiring company.– Name and a copy of the citizenship certificateof the person representing the foundingcompany.

Additional documents required for CompanyRegistration by a foreigner:• A copy of the permit received from

the concerned body to invest in Nepalaccording the existing rules.

• In case of the foreigner being a singleperson.

• An attested copy of the companyregistration certificate.

– A copy of the decision regarding details ofthe investment to be made upon the aspiringcompany by the founder

– An attested copy of the passport of the personrepresenting the founder company

Te concerned individual is normally notifiedabout the status of the registration of thecompany by the office within few days offiling for registration. Upon this, s/he has todeposit the registration charge and collect thecertificate. Te registration fee corresponds tothe company’s authorized capital.

For more information visit:www.cro.gov.np

4. Register with the Inland RevenueDepartment

It is important for a business to register withthe Inland Revenue Department (IRD) within35 days of its incorporation. Te silver jewellerybusiness is not subject to Value Added ax (VA)and therefore, a Permanent Account Number(PAN) number needs to be obtained from theInland Revenue Department. Te requirement

with respect to the documents to be presentedto the IRD is different in the case of a shop/storeand a manufacturing company.

In order to open a jewellery shop/store, theproposed owner should visit the office with thefollowing documents:

• An application form.• 2 passport size photos.• A copy of the proposed owner’s citizenship

certificate.• Business registration certificate.• An agreement paper with the landlord (if

any).

In case of a manufacturing and/or a tradingcompany, the registration process requires thefollowing additional documents:

• An agreement between the proposedpartners (if any).

• A copy of Memorandum of Association(MoA).

• A copy of Articles of Association (AoA).

For more information visit:www.ird.gov.np

5. Registering with other relevant entities

Tough optional, a business in silver jewellerycan be registered with various relevant andrepresentative organizations like the Federationof Handicraft Association Nepal (FHAN),Nepal Gold and Silver Dealers’ Association(NEGOSIDA), Nepal Gold and Silver Art

Association (NEGOSAA), Nepal Gems and Jewellery Association (NEGJA) and NepalChamber of Commerce (NCC). Tese aresuitable platforms to help businesses increasetheir network, explore new and existing marketsand protect their rights (Refer to page 18 for thework of aforementioned institutions.)

6. Nepal Bureau of Standards and Metrology

Nepal Bureau of Standards and Metrology(NBSM) is the government authority thatoversees aspects pertaining to the calibration ofthe measuring instruments used in the industry.Companies are required to use instrumentsthat conform to the standards with regards tomagnitude and correctness set by the NBSM.Some of the measuring instruments used in theindustry are weighing scale or taraju, weight boxor dhak, pressure gauge and vermeil caliber.

For more information visit:www.nbsm.gov.np

Vidha Pradhan, GIZ


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SILVERJEWELLERYIN THEMAKING

1. Silver granules.

2. Raw silver.3. Te silver is melted to bring it to form.

4. It is then sized and rolled according to

the shape of the jewellery.

5. Te silver is then carved into a design.

6. Once the carving is done, it is refined

and brought into shape. Te rough edges

are removed.

7. It is then heated using liquid petroleum

gas.

8. Te process of oxidizing takes place by

placing the jewellery in a chemical.

9. Buffing takes place in a buffing machine

to give it shine.

10.Te jewellery is then ready for sale.

1

2

3

4 5 6 7

8

9

10

Photos: Philipp Kruschel, Rup Kumar BK


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SILVER JEWELLERY MAKING AS ANOCCUPATION AN ARTISAN’S PERSPECTIVESilver Jewellery making is a cultural heritage, an establishedand promising business, and a portrayal of traditional Nepalicraftsmanship that showcases the beauty and ingenuity of Nepalesehandicrafts.

Silver Jewellery artisans have uniquetraditional skills and techniques of Nepalicraftsmanship. Te skill of silver jewellerymaking passes from generation to generation.Te new artisans assist their seniors or familymembers, who are already in the business, to

learn the skills of jewellery crafting. Teseartisans sharpen their craftsmanship skillsby using silver. After mastering the skills ofcraftsmanship, they start working with golditems. However, some of them continue

with silver jewellery but most of them craftgold as well as silver items depending uponthe orders.

Shyam Bahadur Sunar, who has beenrunning a jewellery shop in Chitwan, sincelast 30 years, opined that he learnt theskill from his father and have been playing

with silver since early childhood. “Most ofthe artisans begin as volunteer in jewelleryshops. In addition, there is no technicaltraining institute as such for silver jewelleryartisans”, he said. Likewise, no automated orsophisticated machines are used in most ofthe steps of silver jewellery making process.

Te artisans use simple instruments formelting, casting, sizing, rolling, carvingand cutting, heating, cleaning, soldering,refining and shining that are simple and easyto handle.

Te artisans usually work at jewellery shophowever; they also work at the workshop

which is sometimes far from the shop.Terefore, those artisans working in isolated

workshops get orders from more than one jewellery shops. Tey are paid on the basis ofnumber of finished products they produce.Te artisans can earn from Rs. 15,000 to40,000 depending upon the orders andseason. During marriage and festival seasonsthey receive more orders.

On difficulties facing the silver jewelleryindustry, another artisan, Rajendra B Ksaid, “here are enough silver jewelleryartisans in Nepal, however, heavy influxof Indian artisans, mostly from WestBengal, take away a considerable share of

the Nepalese employment opportunities”.here are cheap and machine finishedproducts from India. hough they arerelatively cheap, the jewellery craftedby hand is much more preferred bythe importers. “Handmade Jewelleriesare liked by many foreigners becauseevery item is different from each other.hey also love the traditional Nepali

jeweller y d esigns”, he ad ded. his is theunique selling point of the Nepali silver

jeweller y. Besides the comp etition f romIndian artisans, the current rise in thesilver price triggered a lower demand forsilver jewellery. his in turn has led to adecrease in the volume of work for theartisans.

Te demand of silver jewellery is increasingalong with the new market that includes

European Union, Russia, South Korea andSouth Africa and Japan. In addition, thesilver jewellery contributes 13 percent to thetotal handicraft export from Nepal. Likewise,Government of Nepal has listed silver jewelleryas one of the promising export items in theNepal rade Integration Strategy-2010, isanother milestone attained by the sector.Terefore, if we can provide proper trainingto that silver jewellery artisans, the sector addsanother ladder to employment creation forNepali youths.

Rup Kumar BK, GIZ

“ Tere are enough silver jewellery artisansin Nepal, however, heavy influx of Indianartisans, mostly from West Bengal takeaway a considerable share of the Nepaleseemployment opportunities .”

Photos: Philipp Kruschel

THE PROJECT ADVISORY GROUP PAGGet insights on the work of stakeholders involved in promoting the Silver Jewellery sector.

Te Ministry of Commerce and Supplies(MoCS) and the Deutsche Gesellschaftfür Internationale Zusammenarbeit (GIZ)GmbH are jointly implementing the project‘Supporting Nepal’s WO accession and

Enhanced Integrated Framework (WO/EIF-SP)’. As part of the project output an actionplan for two priority sectors of Nepal shouldbe developed and partially implemented. Silver

Jewellery has been selected as one of the sectors.

o facilitate this process of developing an actionplan and carrying out the activities under it,a Project Advisory Group (PAG) was formed.Te PAG includes stakeholders from relevantpublic and the private sector. Te members ofthe PAG include the Federation of Handicraft

Association of Nepal (FHAN), LalitpurHandicraft Association (LHA), Ministry ofCommerce and supplies (MoCS), Ministry ofIndustry (MoI), Nepal Bureau of Standards andMetrology (NBSM), Nepal Gem and Jewellery

Association (NEGJA), Nepal Gold & Silver Art Association (NEGOSAA), Nepal Gold & SilverDealers’ Association (NEGOSIDA), South Asia

Watch on rade, Economics and Environment(SAWEE), rade and Export Promotion Centre(EPC) and GIZ. Te Group was formed toensure proper preparation of the sector wideaction plan in the Silver Jewellery sector.

Te Group conducted three PAG meetingsin 2011. Te first meeting, held on April 28,helped identify the stakeholders, their mandates

and key challenges in the Silver Jewelleryvalue chain. Te stakeholders identified threechallenges i) lack of conformity assessment inevery activity of silver jewellery value chain ii)lack of assurance in the purity of silver and iii)

lack of systematic and reliable mechanisms forskills transfer.

In the second PAG meeting held on July 21,SAWEE presented a comprehensive sectorstudy on “Silver Jewellery Exports from Nepal-status and way forward”. Based on the Nepalrade Integration Strategy (NIS) 2010, thesector study report and discussions, a draftaction plan was prepared by the PAG. For thepurpose, the Group was divided into issue-based sub-groups and each sub-group identifieddifferent activities under two broad topics; i)Processing/Manufacturing and ii) Exports. Tesummary of problems and challenges identifiedare as follows:1. Processing/Manufacturing : Supply and

cost of raw materials, skilled manpower,motivation for manufacturers, high volumeproduction, lack of tools and equipment

and quality of jewellery products;2. Exports : Adaptation to the taste of

international Market, explore exportpotential in new markets (especiallyDenmark and Australia), facilitiesfor exporters, one stop showroom forexportable items, unavailability of testingfacility for precious metal and gems.

he third PAG meeting held on September6 focused on preparing a final and anoperational version of the Action Plan. heproposed activities under the Action Plan

were further broken down into a series of

sub-activities with detailed information onthe timeline, implementing agencies, budgetand financing agencies. he WO/EIF-SPalso presented some activities that could besupported by the project.

As a part of the Action Plan imp leme ntati on,the PAG and the WO/EIF-SP decided ona Public Private Partnership (PPP) model.Under the PPP model, ten qualifiedparticipants will be sent for a six monthtraining course at the Indian Institute ofGems and Jewellery, Delhi. Federation ofHandicraft Associations of Nepal (FHAN),Nepal Gold and Silver Dealers’ Association(NEGOSIDA), Nepal Gold and Silver Art

Associati on (NEGOSAA ) and GIZ areinvolved in the PPP model. he traini ngcourse will commence from the firstquarter of 2012.

Vidh a Pra dhan , GI Z


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PAG members:

Federation of Handicraft Association ofNepal (FHAN)Is a service-oriented non-profit organizationof private sector businesses and members ofthe artisan community. It helps its membersto improve their productivity, exploreand get exposure to both the national andinternational arena. It also works as a liaisonbetween its members and the Governmentaland Non-Governmental Organizations.More info: www.nepalhandicraft.org.np

Te Lalitpur Handicraft Association (LHA)Is a service oriented non-profit and non-governmental organization of art and artistsand handicraft trade of Lalitpur. It has morethan 200 members which include artists,manufacturers, wholesalers and exportersof Lalitpur. It works as a liaison betweenits members and the government and non-

government organizations to promote andpreserve handicraft business of Lalitpur.o encourage artists and entrepreneursof Lalitpur, it provides various handicrafttrainings, seminars, symposiums, conferencesand organizes exhibitions. Further, it worksto establish relationship with national andinternational organizations.

Ministry of Commerce and SuppliesIs an entity of the Government of Nepal. It isthe regulatory body and the main responsiblegovernment body for trade related policymaking. Decisions related to internationaltrade policy and operation of internationaltrade is made by the MoCS. It cooperates andcoordinates with agencies related to national,regional, international trade and transit.Further, it carries out intergovernmentaltrade negotiations and evaluates activitiesrelated to trade and transit.More info: www.mocs.gov.np

Nepal Bureau of Standards and Metrology(NBSM)Is the national standards body of Nepal. It works as a secretariat to the Nepal Councilfor Standards (NCS). It inspects andsupervises activities on industrial productionand processes. It also grants licenses to use theNepal Standards Mark on industrial productsin compliance with relevant Nepal Standardsas approved by the NCS. In addition, itprovides testing facilities, calibration andlaboratory accreditation services.More info: www.nbsm.gov.np

Nepal Gem and Jewellery Association(NEGJA)Is an authorized national level organization ofGem and Jewellery businesspersons. It worksas a facilitator to various tasks related to thegems and Jewellery sector as well as handlesemerging problems. It supports the regulationof the market, the enhancement of the quality

of products and competition in internationalmarkets. In addition, quality control is one ofits prime concerns.More info: www.negja.org.np

Te Nepal Gold & Silver Art Association(NEGOSAA) Was registered in 2056 B.S. with the objectiveof advocating for the rights of gold and silverentrepreneurs. Further, it aims to promoteand modernize these businesses to make them

internationally competitive. Currently thereare 300 members and 11 district offices.

Nepal Gold & Silver Dealer’s Association(NEGOSIDA)Is a non-governmental, non- political, non-profit making, autonomous and service-oriented organization. It safeguards andpromotes the interests, rights and privilegesof its members and the Jewellery community.It works to produce skilled manpower for

Jeweller y industr ies and helps promotelocal employment.More info: www.negosida.com.np

South Asia Watch on rade, Economics andEnvironment (SAWEE)Operates as a regional, non-profit NGO.It is also recognized as a think tank atlocal, national, regional and global levels. Itenvisions supporting fair, equitable, inclusive,and sustainable growth and development in

South Asia.More info: www.sawtee.org

rade and Export Promotion Centre (EPC) Has the objective of promoting foreign tradein general and export trade in particular of thecountry. It advises the government of Nepal informulating policies, acts as information poolby collecting, disseminating and publishinguseful trade related information, organizingbuyer/seller meetings, conducting training

seminars and workshops and simplifying theprocedures relating to export.More Info: www.tepc.gov.np

Deutsche Gesellschaft fur InternationaleZusammenarbeit (GIZ) GmbHIs a federal enterprise working on behalf ofthe German Federal Ministry for EconomicCooperation and Development (BMZ). Itsupports the German government in achievingits objectives in the field of international

cooperation for sustainable development. Itfurther supports its partners at local, regional,national and international level in designingstrategies and meeting their policy goals.More Info: www.giz.de

Vidh a Pra dhan , GI Z

Photo: Himadri Palikhe


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10 Facts on Silver

• Te major producers of silver include the United States, Mexico,Canada, Peru, Russia and Australia.

• Silver is used in the photographic industry.

• Argentina is the only country to be named after a chemical element‘Argentum’ (Latin), keeping the link with its mineral wealth.

• Sterling silver is an alloy of 92.5 % silver and 7.5 % other materials- usually copper. In recent times, germanium is often used as areplacement of the copper portion.

• Silver compounds were successfully used in World War I to preventinfection before the advent of antibiotics. Silver compounds are stillused externally to accelerate healing in burns victims.

• Silver is the best conductor of heat of all elements. Its uses in solarpanels and automobile rear window defoggers take advantage ofthis quality.

• More than 2/3 of the silver produced worldwide is a by-product oflead, copper and zinc mining.

• In 1477, silver was worth approximately 100 times more than it

is today.

• Silver is more malleability than any element except gold. One grainof silver can be made into a sheet one hundred and fifty times thinnerthan a piece of paper.

• Silver can be eaten, although it is not advised.



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INTERNATIONAL DEMAND FOR SILVER JEWELLERY

The EU market for Silver Jewellery demands a better understanding by the Nepalese exporters.

Te ten most attractive markets for Nepalesesilver jewellery as per the Nepal radeIntegration Strategy (NIS) 2010 are HongKong, USA, Germany, UK, France, Denmark,

Australia, Spain, Netherlands and Canada. Ofthe ten countries mentioned here, six belong tothe European Union (EU). Also, global importstatistics of silver jewellery place the EU secondonly to the US. his article is an effort topresent the demand side of the EU marketand covers market trends, consumer trends,and opportunities and threats facing theNepalese exporters targeting the EU silver

jeweller y market.

rade Data - Demand and Supply trend

Te total market for jewellery has been growingthroughout the EU. Te world import ofsilver jewellery shows a rising trend with anaverage annual growth rate of around 12%in terms of value, for years spanning 2007 to2010. Te principal importing country is theUS, followed by Germany, UK, Hong Kong/China, Denmark, France and others. Te value

of imports by the 27 EU countries in 2010at US$1.9 billion was as nearly as high as theimport value of the USA at US$2.0 billion(Source: IC, Market Analysis ools, rade Map,

2010).

able 1: World import of silver jewellery (valuein USD)

Importers World

2006 3,426,841,000

2007 3,962,871,000

2008 4,466,953,000

2009 4,488,527,000

2010 5,511,295,000

Source: IC calculations based on COMRDE statistics,Product: HS code: 711311- Articles of jewellery & ptsthereof of silver w/platd/clad w/o prec me t.

Te silver jewellery market in the EU in 2009 was worth 3.1 billion Euros or 13% of the total jewellery market of the EU. A large variance indemand exists among the EU countries: France(608 million Euros) and UK (396 million Euros)have the largest demand for silver jewellery,followed by Germany, Italy and Spain. In 2009,these top five countries accounted for as muchas 66% of the entire EU silver jewellery market.Owing to its growing middle class, Eastern

Europe too presents good business prospects insilver jewellery.

Most silver jewellery imports from outside ofthe EU come from Tailand. Looking again at

world statistics, Tailand is the world’s biggestexporter of silver jewellery (Source: IC Market

Analysis ools, rade Map, 2010 ). In 2009,Tailand’s share in the total EU silver jewelleryimports was 30% at 327 million Euros. BesidesTailand, countries like China, India andurkey are important importers to the EU.

Although the demand trend is positive, thesilver jewellery market in recent years has beenaffected by the global economic crisis and thehigh processing cost of precious metals.

Share of Nepalese silver jewellery in theglobal market

Worldwide, Nepal ranks 50th in terms of silver jewellery export value. In 2010, its share in the world market was less than 0.1% (Source: IC, Market Analysis ools, rade Map, 2010). Te

total silver jewellery exports from Nepal reached3.8 million Euros in 2010/2011, compared to1.7 million Euros in the previous year (EPC,Nepal Foreign rade Statistics, 2010/2011).

With regards to value imported, the USA ataround 2.4 million Euros remains the mostimportant market for Nepalese silver jewellery.Nepal’s export value to the EU reached about0.5 million Euros in the year 2010/2011;the EU countries, to which Nepal exported,

were Germany (around 0.13 million Euros– also the country with the highest value),Netherlands, Italy, France, U.K., Belgium,Spain and Denmark.

rends in production and consumption

Te production market in the EU itself isdeclining which presents good opportunities forexporters outside the EU. However, a growing

number of the EU silver jewellery productionhas already been outsourced to countries likeTailand and China, making it quite difficultfor smaller suppliers from developing countriesto expand their presence in the EU.

A global trend observed of the jewellery industryis that consumers are gradually moving awayfrom gold and platinum towards silver. ermslike “individualization and spiritual jewellery”,“statement jewellery” and “ethical jewellery”are used to describe the characteristics of silver

jewellery. Te developing countries, for notbeing in a position to compete in terms of massproduction, need to differentiate their productsin terms of quality and design, and capitalizeon fashion trends. It may also be necessary to

“ Worldwide, Nepal ranks50th in terms of silver jewellery export value.In 2010, its share in theworld market was lessthan 0.1% . Te totalsilver jewellery exports from Nepal reached 3.8 million Euros in 2010/2011, compared to1.7 million Euros in the previous year.”

upgrade the quality of the raw materials, using“Argentum”- a purer form of silver than Sterlingsilver and creating interesting fusion pieces usingsilver with different materials like stainless steelor different stones. Increasingly, jewellery isbeing integrated into items like bags, apparelsand footwears - an opportunity also for silver

jewelleri es for product line extension and wider mar kets.

Additionally, promotion, distribution andpricing are important elements for gaining andkeeping a market. It goes without mention thatthe importance of aspects like timely delivery andcustomer service to product sales and customersatisfaction cannot be overestimated. Jointpromotions with other exporters have provenmore successful than individual promotionalcampaigns. Te “Made in Italy” concept, set-up by the Italian jewellery industry to promoteitself at trade fairs is one such example. histype of promotion may not be specific for

silver jewellery alone and is a well-known andsuccessful strategy for many other products.

European buyer requirements

Aside from design and aesthetics, there existtwo important sets of requirements: legislativerequirements and non-legislative requirementsgoverning the silver jewellery imports to the EU.Te two main legal requirements that exportersneed to abide by are 1) avoiding the use ofCadmium and 2) observing the requirements

with regards to Nickel content in products thatcome in contact with the skin.

Non-legal requirements such as technical,environmental and social standards are equallyimportant. Te ISO Standards (InternationalOrganization for Standardization, www.iso.org) for silver jewelleries outline a number ofrequirements relating to working conditions,quality standards, health and safety, and social

accountability. A range of social labels exist inthis area too, including the fair trade standards.Not all labels are recognized in all countries.Hence, it is important for the exporters to take intoaccount these requirements while formulating theirmarketing and export strategies.

Sources:• Centre for the Promotion of Exports from

Developing Countries (CBI) (www.cbi.eu): Promising EU export markets for silver

jewellery, 2010; rends and segments forsilver jewellery, 2010; Compliances with EUbuyer requirements for silver jewellery, 2010.

• International rade Center (IC), Marketanalysis tools, trade map (www.trademap.org)

• rade and Ex port Promotion Centre (EPC):Nepal Foreign rade Statistics 2009/2010and 2010/2011.

Gabriele Schlaeger, EPC

Photos: Suman Dhakhwa Photo: Philipp Kruschel


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NEWSGet informed on the current news and activities.

Hong kong International Jewellery Show 16-20 February

www.hktdc.com

Calender of EventsIf you are interested in what has been discussed in this issue, feel free to get informed about or participate inthe following events.

Gem and Jewellery India International Exhibition 2012 (GJIIE)23-26 February

www.jewelleryfair.in

Elitexpo1-4 March

www.galexpo.lviv.ua

Fashion & Jewellery Grand Sale 201224 March-1 April

www.unionpan.com/event-calendar

Gifts Exhibition Kuwait 201229 March- 7April

www.kif.net

Photo: Suman Dhakhwa

Istanbul Jewellery Show 22-25 March

www.istanbuljewelryshow.com

Malaysia International Jewellery Fair 2012 July www.elite.com.my

Hyderabad Jewellery , Pearl & Gem Fair22-24 June

www.jewelleryfair.in

Te Giftionery aipei 201219-22 April

www.giftionery.net

Te 13th Beijing International Jewellery Fair 13-16 July

www.newayfairs.com/EN/EventCalender.asp

India International Jewelry Show August www.iijs.org

Japan Jewellery Show 28-30 August

www.jewellerynetasia.com

September Hong Kong Jewellery & Gem Fair 201219-23 September

www.exhibitions.jewellerynetasia.com

Nepal International rade Fair 2012 (NIF)Date: 5-9 April, 2012 Venue: Bhrikuti Mandap, Exhibition Road, Kathmandu

Te Federation of Nepalese Chambers of Commerce and Industry(FNCCI) in cooperation with the Government of Nepal is organizingthe Nepal International rade Fair (NIF) 2012, a five days eventin Kathmandu. Te exhibition is the rst of its kind in Nepal that isorganized with the aim to promote Nepal’s international trade andenhance the growth of Nepalese exportable products, especially thoseidentied in the Nepal rade Integration Strategy (NIS) 2010. Tisevent is expected to help in the internationalization of Nepalese Smalland Medium Enterprises (SMEs) and create opportunities for them.

NIF’s Offers:• Opportunities for market linkage of over 26 million people.• A platform for cost effective promotion of new concepts, ideas,

products, services and technologies.• A one stop sourcing platform for a wide range of products including

consumer goods and services for SMEs.• A platform for test marketing of new concepts, p roducts and

technologies.• Opportunities for entrepreneurs to learn and benefit from

technology transfer.• Opportunities to explore the possibility of investment and joint-

ventures.• A platform for Business to Business(B2B) and Business to

Consumers (B2C) connection.

More information available at: www.fncci.org and www.fncci.org/events/nitf2012/tf_brochure.pdf

Silver Jewellery raining ProgrammeDate: February – July, 2012 Venue: Indian Institute of Gems & Jewellery (IIGJ), Delhi, India

A training programme in silver jewellery was one of the activitiesidentified in the Action Plan developed by the Project Advisory Group(PAG). In alignment with the plan and under the Public PrivatePartnership (PPP), a total of ten qualified candidates will be sent to theIndian Institute of Gems and Jewellery (IIGJ) in Delhi for a trainingcourse in Jewellery echnology . Te selection of the course was done bythe private partners.

Te training which follows the in-house module consists of techniqueslike electroplating, electroforming, casting and lathe operating, stonesetting and traditional jewellery making. Tis is a six months trainingprogramme starting in February. Te candidates to the course willbe selected on the basis of criteria identified by the PAG and by therespective private partners.

Te private partners involved are Nepal Gold and Silver Dealers’ Association (NEGOSIDA), Nepal Gold and Silver Art Association(NEGOSAA), and Federation of Handicraft Associations of Nepal(FHAN). GIZ, along with the private partners and rade and Export

Promotion Centre (EPC) is supporting the training progr amme. Aftercompleting the training, the trainees will return to Nepal and transferthe skill and knowledge learnt through further trainings to other artisans.raining such as this is expected to help develop skilled human resourcesfor the manufacturing of quality silver jewellery in the country.

nepal trade issue 2 english1

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