Nepal’s trade deficit has reached an alarming level, with figures from the Department of Customs revealing a staggering Rs 1177 billion deficit as of the end of the month of Baisakh (mid-May) in the current financial year. This widening trade gap, fueled by a surge in imports and lackluster export performance, has raised concerns about its potential impact on Nepali businesses, the local market, and the broader economy.
Trade Imbalance:
According to the Department of Customs, Nepal imported goods worth Rs 1303 billion during the first 10 months of the current financial year, while exports were limited to a mere Rs 126 billion. This stark imbalance has resulted in a substantial trade deficit, highlighting the urgent need to address the country’s import-export dynamics.
Declining Foreign Trade:
Furthermore, the country’s overall foreign trade transactions worth Rs 1429 billion during the first 10 months of the current year marked a decline of 2.50 percent compared to the corresponding period of the previous financial year. Both imports and exports experienced a downturn, with imports decreasing by 2.39 percent and exports falling by 3.61 percent during the same period.
Bilateral Trade Deficits:
Nepal’s trade deficit with its neighboring countries, India and China, remains a significant concern. The country suffered a trade loss of Rs 729 billion with India, as imports from India totaled Rs 815 billion, while exports to India were a mere Rs 86 billion. Similarly, the trade deficit with China stood at Rs 238 billion, with imports from China valued at Rs 240 billion and exports to China at only Rs 22.74 billion.
Import Composition:
The largest import for Nepal during the review period was petroleum products, including petrol worth Rs 115.67 billion, diesel worth Rs 56.80 billion, and cooking gas worth Rs 46 billion. Additionally, Nepal imported mobile phones worth Rs 24 billion during the same period.
Export Highlights: On the export front, Nepal’s highest export was carpets, worth Rs 8.79 billion, followed by cardamom worth Rs 6.91 billion, iron worth Rs 5.52 billion, and palm oil worth Rs 5.60 billion.
