The development of industrial base is still in rudimentary stage in Nepal. Despite agriculture being the mainstay of the national economy, the agro-based industries are still less than fledgling. These industries are far short of meeting the national demand for respective products. The manufacturing sector has gained a marginal momentum over the last few years. The development of manufacturing industry is led by the consumer product based industries, particularly those fulfilling the everyday consumer needs. Virtually all industries have been conducive to import substitution and have shown a dismal performance in promoting their exports.

As against the backdrop of far inadequate industrial development, the current account balance has long been in the red. The two top performers in the area of generating foreign exchange have been tourism and exports of handicrafts and other products.

Growth in tourism is not up to its par and the full potential is far less than realized. Business activities in this area of national economy have proliferated with the marginal effect. Tourism has its bearing upon the production, demand and marketing of the products from handicrafts metalcrafts, silverware and woodcrafts) garments and carpet industries in particular. As these products are exported oriented, efforts are underway for a greater access to international markets for these products. The promotion of the Nepalese products on the foreign market calls for greater concerted efforts from the government and private business sectors alike.

The export-based industry of Nepal has increasingly contributed to the national economy. Although the performance of export sector has been on the rise in terms of revenue generation, a lot more is to be performed in exploring the market niche and exploiting the full potential.

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