Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010The industry is electricity-intensive and frequent interruptions have caused problems. Self-generation costsare 200 per cent higher than power from the grid. Transportation of distribution transformers to Bhutanrequires trans-shipment through India, which adds additional costs and potential delays.A significant increase in exports of transformers, in particular distribution transformers, may not be for the nearfuture. Such exports have been erratic in recent years, but it is hard to imagine that distribution transformerswill become a major export item, given the high transport costs and no evidence for particular comparativeadvantages in this sector. Labour-intensive assembly of micro-transformers or similar electronic componentsmight have greater potentials. These exports rely on low labour costs, but suffer from low labour productivity.It is a sector that has probably less in common with distribution transformers than with the garment sector,where Nepal’s competitiveness is problematic when compared to more efficient low-cost producers such asVietnam or China, especially once preferential access is gone.126NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT