Trade deficit hits Rs 1177 bn, Nepal’s economy under strain

Kathmandu: By the mid-May, Nepal finds itself grappling with a trade deficit of Rs 1177 billion for the current financial year. The Department of Customs reports imports amounting to Rs 1303 billion, overshadowing exports which stood at a meager Rs 126 billion.

Foreign trade transactions for the first 10 months of the fiscal year totaled Rs 1429 billion, marking a 2.50 percent decline compared to the previous year. During this period, imports dipped by 2.39 percent, while exports experienced a sharper decline of 3.61 percent.

The trade deficit with India amounted to Rs 729 billion, with imports from India reaching Rs 815 billion and exports to India just Rs 86 billion. Nepal also faced a significant trade gap with China, recording a deficit of Rs 238 billion. China exported goods worth Rs 240 billion to Nepal, while imports from Nepal stood at only Rs 22.74 billion.

Key imports for Nepal included petroleum products such as petrol, diesel, and cooking gas, totaling billions of rupees. Additionally, the country imported mobile phones worth Rs 24 billion. On the export front, Nepal’s highest exports were carpets, cardamom, iron, and palm oil.

The persistent trade deficit underscores the need for Nepal to reevaluate its trade strategies, focusing on enhancing export competitiveness and reducing reliance on imports to ensure economic stability and growth.