U.S. Ends Tariff Exemption on 77 Nepali Products, Up to 26% Tax Imposed

Kathmandu –  Starting today, the United States will impose taxes of up to 26% on the export of 77 Nepali products. This marks the end of tariff exemptions that the U.S. had provided on various Nepali goods since 2015.

The exemption was initially granted as aid following the devastating earthquake in Nepal. Under this facility, 48 Nepali items, including pashmina shawls, mufflers, and caps, were exported to the U.S. at reduced or zero tariff. However, many other items could not be exported despite the exemption.

With the end of this facility, Nepali exports will now face tariffs of up to 26%, according to former Chairman of the Nepal Export Council, Ramesh Bahadur Pokharel. Of this, 10% is the baseline tariff already imposed by the U.S., while the remaining 16% to 26% comes from the terminated exemption.

“Until yesterday, we paid only 10% on all items; now the tax goes up to 26%,” said Pokharel. “On items that previously had exemptions, the U.S. imposed tariffs of 6–16%, which now will fully apply.”

Ahead of the termination, exporters and trade associations had submitted memoranda to the Ministry of Industry, Commerce, and Supplies, urging the continuation of the tariff exemption. However, the results were not realized before the exemption expired, Pokharel added.

“We faced not only the earthquake but also COVID-19 and many other challenges. We requested at least a five-year continuation of the exemption, which did not happen. Now the full tariff applies,” he said.

Impact on Businesses

With the end of the U.S. facility, Nepali goods will become 6–16% more expensive in the American market, which may reduce competitiveness, affecting production and employment.

However, due to reciprocal tariffs imposed by the U.S., Nepali exporters still maintain some competitive advantage compared to countries like India and Bangladesh, who face higher U.S. tariffs. Garment exports face stiff competition from Bangladesh and India, which are key competitors for Nepal.