Background of the Association
Those engaged in the gold and silver business in Nepal have long faced various challenges. To address these issues in an organized manner, the Nepal Gold and Silver Business Association was established in 2044 B.S. Recognizing the need for local representation, the Lalitpur Branch of the association was formally founded in 2051 B.S. Over time, this branch evolved into the Lalitpur District Gold and Silver Merchants Association, which was officially registered at the District Administration Office on 2069/09/25 B.S. Looking back on over 30 years of history, the association has experienced many highs and lows. In a sector that significantly contributes to the country’s economy, entrepreneurs involved in the gold and silver trade have continued to serve the needs of both the government and general consumers, all while earning their livelihoods.
Despite their contributions, traders have faced numerous challenges, including policy hurdles, economic instability, and safety concerns. In the past, gold traders have even suffered from incidents like theft, robbery, and police harassment. Yet, through the leadership and resilience of its members, the Lalitpur association has steadily advanced, and is now in the process of constructing its own office building. As part of the Nepal Gold and Silver Merchants Federation, the association abides by the code of conduct issued by the federation and follows the guidelines set by various agencies of the Government of Nepal. These efforts have helped the association maintain a strong reputation.
Moreover, the association ensures that products meet the measurement standards set by the Department of Standards and Metrology, providing pure and high-quality jewelry to consumers. As recognition for its efforts, the federation awarded the Best District Association Award for the Year 2080, adding another proud chapter to its history.
Relationship with the Lalitpur Chamber of Commerce and Industry
Following its official establishment in 2052 B.S., the association began its affiliation with the Lalitpur Chamber of Commerce and Industry in 2056 B.S. A major milestone occurred in 2071 B.S. when, for the first time, Mr. Sabin Shrestha was elected Vice President on behalf of the association during Mr. Ajarman Joshi’s second term as President. Later, under the leadership of Mr. Krishna Lal Maharjan, former association president Mr. Roop Kumar Shakya was elected unopposed as Vice President.
Through active participation in various chamber programs, the association has made significant contributions. Notably, in collaboration with the Trade and Export Promotion Centre (TEPC), a two-month training program on traditional butta kud jewelry making was organized—marking a first in the chamber’s history. This experience remains a cherished memory. The association, with support from the chamber, has also conducted various public awareness campaigns and training programs for its members, including workshops on accounting systems, which proved very effective.
A tragic incident during this time—the robbery and murder of Jujukaji Bajracharya in Pulchowk by Indian assailants under the influence of drugs—highlighted the risks traders face. In response, the association, in collaboration with the chamber and other local organizations, successfully organized the Lalitpur Bandh movement demanding justice. Despite obstacles such as economic recessions and systemic issues, the solidarity between the region’s traders and industrialists has allowed Lalitpur to uphold a strong image in both business and policy advocacy.
Gold and Silver in the Global Market
Gold and silver jewelry hold immense value not only economically but also culturally and historically, making this trade one of the world’s oldest. Major producers of gold and silver jewelry include India, China, the United Arab Emirates, Italy, and Thailand. In 2022 alone, the global gold jewelry market was valued at USD 260 billion, with projections estimating it will reach USD 550 billion by 2030. Silver jewelry, especially popular among women, also holds a significant share of the international market.
The demand for jewelry fluctuates with global economic conditions, pricing trends, and the emergence of new designs. Unique craftsmanship and original designs have helped silver jewelry carve out a distinct identity in the world market. Interestingly, Thailand is currently the top exporter of silver jewelry. Thirty years ago, Nepalese craftsmen were among the first to gain global recognition for their ready-made designs. During a meeting between representatives of the Nepal Gold and Silver Merchants Federation and the Thai Gems and Jewelry Association, then-president Pornchai Chuan Chomladale acknowledged that Nepalese artisans were a source of inspiration for Thai designs. However, despite Nepal’s early promise, the country still lacks clear and supportive policy frameworks. This has prevented the gold jewelry market in Nepal from reaching its full potential globally, even though the sector is slowly gaining identity.
According to 2022 data, gold and silver jewelry ranked as the 36th most traded commodity in the world, with Nepal’s imports valued at USD 433.3 million, making it the third most imported item. The major countries from which Nepal imports gold include the UAE, Qatar, Saudi Arabia, Switzerland, and Turkey. As gold and silver continue to be seen as symbols of wealth in various cultures, the jewelry industry is poised to grow further with evolving customer preferences and new market trends.
Nepali Gahana Culture and Its Globalization
Cultural Significance and Market Potential
Gold and silver jewelry hold deep cultural significance in Nepal. These ornaments are an essential part of weddings, festivals, and other social functions. Traditional pieces such as velvet necklaces, nathiya (nose rings), phuli (ear studs), tilhari, bulaki, and jareko topko reflect Nepal’s unique cultural identity and craftsmanship.
These traditional designs are not only symbolic but also distinctly Nepali in character. Nepal has shown promising potential in the production and export of gold and silver jewelry. The intricate craftsmanship and cultural richness embedded in each piece offer Nepal a competitive edge in the global market. The Nepalese jewelry industry is evolving by blending traditional motifs with modern designs, increasing its appeal both domestically and internationally. In 2022 alone, Nepal exported approximately $50 million worth of jewelry. This indicates strong export potential—especially if backed by strategic initiatives such as quality improvement, technological adoption, and foreign investment. The unique, handmade, and culturally inspired designs of Nepali jewelry have the potential to distinguish Nepal in the global jewelry market.
Role of the Nepali Diaspora in Global Promotion
The Nepali diaspora plays a crucial role in promoting traditional jewelry on the global stage. Nepali communities in countries such as the United States, Europe, Australia, and the Gulf nations continue to uphold traditional practices, including wearing ethnic jewelry during weddings and cultural celebrations. This continued practice has helped sustain and even increase the demand for Nepali jewelry abroad. The diaspora serves as a strong platform for introducing Nepali jewelry to international markets. Interest in these ornaments is especially high around weddings and cultural events, making it a valuable niche market. Not only does this help in preserving cultural heritage, but it also creates significant economic opportunities for Nepal. To leverage this potential, both the government and private sector must invest in branding, digital marketing, and the use of online platforms. Doing so will enhance the global visibility and competitiveness of Nepali jewelry.
Current Status of Workers in the Jewelry Industry
Nepal is home to an estimated 25,000 gold and silver traders, and the sector provides direct and indirect employment to nearly 2 million people. However, a major concern in the jewelry production industry is the dominance of Bengali workers, who outnumber Nepali artisans in many production units. Despite having a rich tradition of hereditary jewelry craftsmanship, Nepali artisans make up only 20% of the workforce, while 80% are foreign workers—mostly from India. This imbalance poses a long-term challenge to the sustainability of Nepal’s jewelry industry.
To address this issue, the association, in coordination with Lalitpur Metropolitan City, the Nepal Handicraft Federation, and the Bagmati Province Government, has initiated training programs aimed at reviving local craftsmanship. However, support from government regulatory bodies has been minimal. Developing skilled local artisans not only preserves cultural heritage but also prevents capital outflow and dependency on foreign labor. For sustainable industry growth, it is essential to attract Nepali youth to this sector. Establishing training centers in various regions and producing skilled manpower at the local level are crucial steps.
As of 2022, Bengali workers dominated about 80% of the production units. Reducing this reliance and bringing more Nepali workers into the workforce is vital. The Government of Nepal and the private sector should jointly launch initiatives that provide financial incentives, training opportunities, and access to modern tools and technology to enhance local skills.
Policy and Regulatory Challenges in Nepal’s Jewelry Trade
Nepal’s jewelry industry faces several policy and regulatory challenges that hinder its development. Issues related to import/export taxes, legal procedures, and trade policies significantly affect the sector’s ability to compete globally.
1. Customs Duty Rates
Currently, Nepal imposes a 20% customs duty on gold imports, up from the previous 15%. This has driven the price of gold in Nepal to around NPR 28,000 per tola, making it substantially more expensive compared to neighboring India, where the customs duty is only 9%. This 11% gap encourages illegal gold smuggling from India, undermining official imports and disrupting the market.
The result is not only a shortfall in government revenue but also a market skewed in favor of smugglers, affecting both traders and consumers. Moreover, cheaper ready-made jewelry imported from India threatens Nepal’s traditional jewelry designs and indigenous cultural identity.
To preserve and promote Nepal’s rich heritage in gold and silver jewelry, the government must urgently address these policy discrepancies. Supportive trade regulations and balanced tax structures are essential to help Nepali artisans and traders compete in the international market and sustain the industry for future generations.
Impact and Prevention of Smuggled Goods in Nepal’s Jewelry Sector
Challenges of Smuggling
Smuggled goods, especially gold and silver, are widely available in Nepal due to open borders on three sides, making it relatively easy for illegal trade to occur. The high customs duty of 20% on gold imposed by the government results in the market price rising to around NPR 28,000 per tola. These price differences create incentives for tax evasion and directly impact government revenue through lost income tax and other duties.
This disparity also keeps gold prices in Nepal significantly higher than in neighboring India. To address this issue, customs rates should be revised to align with regional trends, and border security mechanisms must be strengthened. Additionally, efforts must be made to monitor and prevent the covert and unauthorized entry of smuggled jewelry into Nepal.
Barriers to Jewelry Exports
Nepal is permitted to export specific types of jewelry, but only in limited quantities. These policy restrictions limit the ability of Nepali manufacturers to expand and compete in the international market, presenting a major obstacle for the growth of the industry.
Policy Inequality with India
Nepal faces an uneven playing field when it comes to competing with India in the jewelry trade. India imposes lower taxes on gold and silver imports, allowing its jewelry industry to operate at a reduced cost. Furthermore, the Indian government offers incentives and support programs that reduce production costs even further.
As a result, Indian manufacturers are not only able to replicate popular Nepali designs, but also produce and export them at significantly lower prices. This severely undermines Nepali producers, who struggle with high production costs and declining competitiveness.
Policy Reforms and Recommendations
To make Nepal’s jewelry industry more sustainable and competitive, the following policy reforms and strategic measures are recommended:
1. Reduce Import Taxes
Lowering taxes on gold and silver imports can help reduce production costs, making local jewelers more competitive. This would also encourage the growth of domestic production and reduce reliance on smuggled goods.
2. Promote Jewelry Exports
Adopting flexible export policies and streamlining export procedures can increase the international reach of Nepali jewelry. With a smoother process, manufacturers would be encouraged to scale up production and explore global markets.
3. Establish Favorable Trade Agreements
Forming trade agreements with major jewelry-importing countries, especially India, can enhance Nepal’s global competitiveness and reduce Indian market dominance. Such agreements could offer tariff relief or quota-based exports for Nepali jewelry.
4. Invest in Local Production
The government should promote local craftsmanship by offering soft loans, technical training, and infrastructure support. This will not only improve the quality of jewelry but also attract younger generations to the craft sector, ensuring long-term sustainability.
The Way Forward
Nepal must reform its tax and trade policies to close the competitive gap with India. Despite the current challenges, the country has significant potential to thrive in the global jewelry market by leveraging its cultural heritage, supporting local artisans, and engaging the Nepali diaspora in international promotion. The growing global demand for gold and silver jewelry represents a tremendous opportunity for Nepal. By combining its rich traditions with modern marketing strategies, Nepal can establish a strong and unique presence on the global stage.
To achieve this, coordinated efforts are required among business owners, consumers, stakeholders, and all levels of government. Collaborations with organizations like the Lalitpur Chamber of Commerce and Industry will be vital in making these efforts more effective. On the occasion of the 47th General Meeting of the Association, we extend our best wishes and express our commitment to strengthening Nepal’s gold and silver jewelry industry for generations to come.
