Nepal's trade deficit widens to Rs 289.62 billion

- POST REPORT, Kathmandu

Feb 16, 2014-

Nepal’ trade deficit expanded to Rs 289.62 billion in the first half of current fiscal year. Nepal imported goods worth Rs 334.83 billion in the six-month period, while exports stood at Rs 45.21 billion, according to the latest statistics of the Trade and Export Promotion Centre (TEPC). 

The overall trade volume stood at Rs 380.04 billion, an increment of 14.2 percent compared to the same period a year ago. The TEPC data show the country’s exports increased by 17 percent, while imports grew 13.8 percent. “The ever increasing trade deficit shows the government’s policy targeted at increasing exports has failed to deliver,” said trade expert Bijendra Man Shakya. “The government had rolled out cash incentives on several export-oriented products last year. However, this hasn’t made any impact on arresting the trade deficit.” 

Experts say the rise in imports of luxury goods has further worsened the situation. Nepal imported gold worth Rs 12.51 billion in first six months of this fiscal year.  Shakya said the trade deficit can only be reduced by either increasing exports or discouraging imports.

According to the TEPC data, the country spent the highest for the import of petroleum products. In the review period, Nepal imported petroleum products worth Rs 61.62 billion, which is higher than the country’s overall export earnings.

On the import list, iron and steels stood second, followed by automobile and spare parts. Nepal imported iron and steel products worth 29.5 billion, while automobiles and spare parts imports stood at Rs 20.28 billion.

Although the country’s overall exports surged by 17 percent, the exports of lentils, ginger and silver jewellery declined during the review period. Lentils export slumped from Rs 2.01 billion to Rs 964.72 million. The saving grace was the export of woollen carpet and readymade garment, one of the mainstays of Nepal’s export basket. 

The TEPC statistics show woollen garment exports increased by a handsome 40.3 percent to Rs 3.63 billion, while readymade garment exports swelled 50.4 percent to touch 2.72 billion. In terms of trading partners, India is the largest trading partner of Nepal, both in terms of exports and imports. Nepal exported goods worth Rs 29.51 billion to India, while imports from the southern neighbour stood at Rs 221.89 billion. After India, USA, Germany, China, UK and Bangladesh are the major export destinations of Nepali products.

The TEPC data show exports of goods under the Nepal Trade Integration Strategy (NTIS) declined in the first six months of this fiscal year. Nepal exported NTIS products worth Rs 14.20 billion in review period, against Rs 14.68 billion in the same period last year. Among the 13 NTIS items, nine posted rise in the exports, while the rest—including lentils, medicinal herbs, ginger and silver jewellery—saw their business dwindle in the international market.


Foreign Trade Balance of Nepal                                                

   Total Exports Total Imports   Total Trade              Trade Deficit


FY 2013-14   Rs 45.21 billion Rs 334.83 billion Rs 380.04 billion      Rs 289.62 billion


Percentage share  in total trade  11.9 percent 88.1 percent


Percentage change in first 6 month  17.0 percent 13.8 percent 14.2 percent               13.3 percent

of FY 2013-14 against same period of the last year

Published: 17-02-2014 09:34

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