Foreign Trade continues to bear grim face

Kathmandu, Sept. 3: Of its 185 partner countries in international trade, Nepal is facing trade deficit with 142 nations along with its neighbours India and China.

Country's export trade plummeted by approximately 17.54 per cent last year.

Foreign Trade Statistics of the last Fiscal Year 2015/16 published by the Department of Customs (DoC) shows that Nepal's highest trade surplus is Rs. 643 million with the United Kingdom which is followed by the United States with Rs. 617 million, Afghanistan by Rs. 117 million and Norway Rs. 107 million.

Total size of trade with the UK is Rs. 4.92 billion, USA Rs. 17.79 billion, Afghanistan Rs. 294 million and Norway Rs. 298 million.

But, the trade deficit data show a horrible figure with Rs. 443.84 billion with India and Rs. 114.39 billion with China.

Nepal exported goods and services equivalent of Rs. 39.56 billion to its southern neighbour against the import of Rs.483.30.

Its import size was Rs. 116.16 billion against Rs. 1.71 billion export to its northern neighbour.

Other trade partners with higher deficits are the United Arab Emirates with Rs. 16.87 billion, Switzerland Rs. 10.60 billion and Thailand Rs. 9.99 billion. 

Of 185 countries that Nepal traded goods and services with, there were imports only from 51 countries.

Likewise, there were no imports from 13 countries like Algeria, Bermuda, Guam, Rwanda and Tajikistan.

There are instances that Nepal imported goods or services equivalent to about Rs. 1,000, Rs. 3,000 and Rs. 7,000.

Major facts of Nepal's international trade

Trade surplus (Rs. in millions)
Country	Exports	Imports	Trade Balance	Total Trade
United Kingdom	2,782	2,139	643	4,921
United States	9,208	8,590	617	17,798
Afghanistan	206	88	117	294
Norway	203	95	107	298
American Samoa	12	0.07	12	12.6
Trade deficit (Rs. in billions)
India	39.56	483.30	-443.74	522.86
China	1.71	116.16	-114.39	117.83
UAE	0.75	16.95	-16.87	17.02
Switzerland	0.63	11.23	-10.60	11.87
Thailand	0.12	10.12	-9.99	10.24

Source: Nepal Foreign Trade Statistics 2015/16

According to the DoC, the minuscule size of trade with those countries was not a formal trade instead they were the good brought in by Nepalese workers or tourists from those countries. As they pay the customs charges, such imports are listed on the foreign trade statistics.

For instance, Nepal imported goods equivalent of Rs. 3,000 from Chad, Rs. 1,000 each from Iceland and Moldova and 3,000 from Nigeria.

During the last decades, Nepal's export trade registered positive growth but the continuous supply chain constraints for almost five months after the promulgation of the constitution last year, it suffered decline.

Similarly, annual imports declined plummeted by 1.46 per cent last year.

Imports sunk largely due to the Indian blockade at the southern Nepal-India border.

Nepal imported only two-third of its total petroleum demand while vegetables and other agro-products were also saw negative growth.

Nepal imported the goods and services of Rs. 774.71 billion in the last fiscal which is 1.46 per cent less than the previous fiscal year 2014/15. Likewise, it only exported the goods and services of Rs. 70.25 billion. The size of export was Rs. 85.19 billion in the previous fiscal.

The import export ratio stands somewhere 11.03, higher by 19.50 per cent than the last year's ratio of 9.23.

Export trade is the major source of foreign currency income for many countries around world while Nepal is almost fully dependent on the remittances coming from the overseas as its tourism and export trade both are not fully developed.

Nepal exports goods that are largely labour intensive like handicraft, carpets and other textiles, felt products, basket ware and other indigenous artifacts.

Another characteristic of its export is less value addition – it exports raw hides, ginger and other agro-products with zero value addition.

The grim scenario of export trade indicates that there are less employment opportunities in the country which itself explains the exodus of youth power to the Gulf countries and elsewhere in search of work.

Published in The Rising Nepal English Daily