Nepal’s Foreign Trade Rises by 18.8%, Driven by a Surge in Exports

Nepal’s foreign trade has shown significant growth in the first month of the current fiscal year (2082/83), according to preliminary data from the Trade and Export Promotion Centre. The country’s total foreign trade increased by 18.8% compared to the same period last year, reaching Rs. 166.97 billion. This growth is primarily fueled by a remarkable surge in exports.

Exports Soar by 95.7%

In the first month, Nepal’s total exports jumped by an impressive 95.7% to Rs. 23.93 billion, indicating a positive shift in the trade balance. During the same period, imports also increased by 11.4%, reaching Rs. 143.04 billion.

The export-to-import ratio has improved significantly, moving from 1:10.5 in the first month of the previous fiscal year to 1:6.0 in the current period. This indicates a reduced reliance on imports and a growing contribution of exports to the economy.

Key Export and Import Products

The major contributors to the export growth were soybean oil, palm oil, and sunflower oil, which together accounted for 50.4% of the total exports in July. Notably, soybean oil exports saw a massive increase, reaching Rs. 10.70 billion.

However, some key export items saw a decline, including:

On the other hand, exports of yarn and jute products showed positive growth, increasing by 26.68% and 40.49% respectively. Similarly, cardamom exports saw a remarkable increase of 99.54% to Rs. 321.8 million.

Regarding imports, there were mixed results. While imports of petroleum products decreased by 5.63%, imports of iron and steel, vehicles and their parts, and food grains increased significantly. Raw soybean oil and raw palm oil imports also saw substantial growth, rising to Rs. 10.81 billion and Rs. 1.05 billion respectively.

Trade with Key Partners

Exports to India, Nepal’s largest trading partner, surged by 156.66% to Rs. 19.45 billion. India’s share of Nepal’s total exports rose from 60.51% last year to 81.28% in the current period.

Other important export destinations include the United States, Germany, the UK, the UAE, Japan, and Australia. Major import partners are India, China, Argentina, Qatar, and the UAE.

Trade Deficit Widens Despite Export Growth

Despite the significant increase in both exports and imports, Nepal’s trade deficit has widened. The deficit grew by 2.5%, reaching a total of Rs. 119.11 billion. This highlights the ongoing challenge of managing the trade balance, even as export performance improves.

• Iron and steel products: A 71.44% decrease.
• Woolen carpets: A 26.58% decrease.
• Ready-made garments: A 5.22% decrease.
• Plywood: A 56.58% decrease.