Turkey has agreed to annul the 17 per cent anti-circumvention duty on import of Nepalese yarn. Turkey earlier provided duty-free access to Nepalese yarn. It imposed the duty last year alleging Nepalese traders were exporting foreign yarn under domestic brand names.

Alleging that Nepal was exporting Chinese yarn, Turkey had suspended the generalised system of preferences (GSP) benefit on export of yarn from Nepal in January this year. It had cited a considerable growth in export from Nepal — around 190 per cent between 2011 and 2017 — without a reliable domestic production base as the reason for suspending the facility. Nepal exports polyester and viscose blend yarn worth around four billion Nepali rupees to Turkey every year.

Nepal insists its yarn producers, traders and yarn manufacturers export genuine domestically produced yarn. There are four producers of yarn in Nepal and they jointly produce almost 40,000 metric tons of yarn a year. Annually, the country exports more than 80 per cent of locally produced yarn to several countries.

Nepalese yarn amounting to almost seven billion rupees is exported to Turkey every year. Nepal and Turkey established diplomatic relations in 1962. Among Nepal’s exports to Turkey are carpets, pashmina and shawl, and handicrafts. After the earthquakes which struck Nepal in 2015 Turkey delivered humanitarian assistance and took part in rescue operations.