Kathmandu, June 9: Nepal’s merchandise trade deficit expanded by 14.9 percent to Rs. 1443.68 billion during the first ten months of fiscal year 2025/26, driven by a faster rise in imports compared to exports.
According to trade data obtained from Nepal Rastra Bank (NRB), merchandise exports increased by 14.2 percent to Rs. 248.96 billion, significantly slower than the 72.7 percent growth recorded in the same period last year, indicating a sharp moderation in export momentum.
Imports, however, rose by 14.8 percent to Rs. 1692.64 billion, slightly higher than the 13.1 percent growth in the previous year, widening the overall trade gap.
Destination-wise, exports to India increased by 16.1 percent, while exports to other countries rose by 9.5 percent. In contrast, exports to China declined sharply by 41.7 percent, highlighting uneven external demand.
Key export gains were recorded in soybean oil, cardamom, palm oil, noodles, and jute goods. However, exports of zinc sheets, particle board, tea, woolen carpets, and handicrafts declined during the review period.
Imports driven by fuel, vehicles and inputs
On the import side, shipments from India, China, and other countries increased by 10.6 percent, 21.4 percent, and 20.7 percent, respectively.
Major import items included petroleum products, chemical fertiliser, silver, transport equipment, vehicles and spare parts, and crude soybean oil. Imports of hot rolled sheet in coil, edible oil, garlic, pulses, and M.S. wire rods and bars declined.
Trade gap continues to widen
The total trade deficit reached Rs. 1443.68 billion, up from a lower growth of 6.7 percent in the same period last year. The export-import ratio slightly declined to 14.7 percent from 14.8 percent, indicating marginal weakening in export coverage of imports.
Meanwhile, imports from India paid in convertible foreign currency stood at Rs. 160.80 billion, up from Rs. 152.48 billion a year earlier.
Composition of Foreign Trade
As per the Broad Economic Categories (BEC), the final consumption goods, intermediate goods, and capital goods accounted for 69.4 percent, 29.8 percent, and 0.8 percent of the total exports respectively in the review period. In the same period of the previous year, the ratio of the final consumption, intermediate, and capital goods remained 66.5 percent, 32.5 percent, and 1.0 percent of total exports, respectively.
On the imports side, the share of final consumption, intermediate, and capital goods remained 38.3 percent, 52.4 percent, and 9.3 percent in the review period. Such ratios were 39.3 percent, 51.8 percent, and 8.9 percent, respectively, in the same period of the previous year. #nepal
