Nepal to Prioritize Domestic Products in Public Procurement

Sabika Shrestha & Kamala Aryal

Nepal is going back to its roots making domestic indigenous products mandatory in public sphere.  

The government has started implementing a provision requiring public bodies to mandatorily use domestically produced goods.

However, stakeholders say putting the provision into practice remains challenging.

Although the government has repeatedly introduced policies making the use of domestic products mandatory, such measures have failed to become effective in the past.

The government has now revived the policy through the draft National Supply Policy, 2026, prepared by the Ministry of Industry, Commerce and Supplies.

However, stakeholders point out those previous attempts to implement the policy effectively failed due to inadequate production and quality, inconsistent supply of required goods, the inability of domestic products to compete with imported goods on price, easier access to foreign products during procurement, and weak monitoring mechanisms.

The draft policy states that all public bodies will be required to use domestically produced goods such as uniforms, furniture, furnishings, stationery and gifts, even if they are up to 15 percent more expensive than imported alternatives.

The policy also includes provisions to encourage the consumption of domestic products and give priority to local products in public use and public procurement.

The government believes this will provide relief to local entrepreneurs and micro, cottage and small-scale industries.

The policy also seeks to establish a mechanism for setting minimum support prices and guaranteeing the purchase of local products to ensure producers receive fair prices.

In addition, the government plans to upgrade laboratory and quarantine facilities at customs points to ensure that only quality goods are allowed to enter the country.