KATHMANDU, July 23: Nepal trade deficit increased by six percent in the last fiscal year (FY) despite the massive rise in export earnings that the country secured during the period.
The records with the Department of Customs (DoC) show that the country’s trade deficit stood at Rs 1.527 trillion in FY 2024/25, up from Rs 1.440 trillion in FY 2023/24. It shows the country lost additional Rs 87 billion in net outflows in merchandise trade in the review period.
The increased gap in trade deficit was due to the surge in import expenses compared to the nominal rise in export earnings. According to the DoC, Nepal imported goods worth Rs 1.804 trillion, up by 13.25 percent. On the other hand, exports increased by 81.80 percent to Rs 277.03 billion. The overall trade volume of the landlocked country surged 19.24 percent to Rs 2.081 trillion.
Nepal’s foreign trade declines, trade deficit reaches over Rs 1...
Trade expert Purushottam Ojha, who is also a former commerce secretary, said the trade deficit widened mainly as the country failed to export high value products. “As we have to rely largely on the imported raw materials by paying huge amounts in US dollars, the value addition inside the country is very minimal. In addition, the government has not introduced any programme to make a breakthrough in the export of Nepali goods and services,” Ojha told Republica.
The excessive import of petroleum products was one of the components that contributed to the heavy surge in the country’s trade deficit. In the last FY, import expenses in petroleum products surpassed the country’s total export earnings by Rs 49.11 billion. As the country made receipts of Rs 277.03 billion from exports, it paid more than Rs 325 billion to purchase petroleum products.
In the review year, Nepal achieved net gain in cross-border trading of 13 items that include coffee, tea, raw leather, vegetables and fruits, and carpet, among others. The country exported woolen carpet of Rs 12.25 billion as it imported the product worth Rs 577.8 million.
In the trading of vegetables and fruits, Nepal exported the farm products of Rs 7.74 billion compared to the imports of Rs 2.38 billion. In this regard, the country earned Rs 5.35 billion in net value.
Similarly, the export earnings from coffee, tea and related ingredients stood at Rs 13 billion compared to the imports of Rs 4 billion of these products. This gave net earnings of Rs 9 billion in the segment to the country.
