Nepal incurs excessive trade deficit with India, China

Kathmandu, May 21

Nepal's international trade has become a story of imbalance with a huge gap in trade surplus and deficit with its major trade partners. In the last 10 months of the current Fiscal Year 2022/23, the country's highest trade surplus is just Rs. 903 million with Norway. On the contrary, highest trade deficit is Rs. 753.3 billion with India.

According to the latest statistics of the Department of Customs (DoC), top countries that Nepal has trade surplus with are Algeria, Niger, Cambodia, Uruguay, Chad and Latvia with whom it has negligible trade out of its total Rs. 1466.2 billion.

In the same period of last FY 2021/22, Nepal's size of foreign trade was Rs. 1778 billion with the imports of Rs. 1604.6 billion and exports of Rs. 173.3 billion.

There is a higher drop in exports than imports. Exports declined by 24.5 per cent and imports fell by 16.9 per cent compared to the previous year.

Nepal imported goods worth Rs. 844.53 billion from India while its exports were of just Rs. 91 billion – 9.2 times higher. In the last 10 months (mid-July 2022 to mid-May 2023), Nepal's share in export is 8.93 per cent – almost one percentage point down from the same period last year. The share of export in 10 months of FY 2021/22 was 9.75 per cent.

Likewise, Nepal has witnessed a huge deficit with China, Indonesia, United Arab Emirates, Argentina, Malaysia, Ukraine, Australia and Qatar.

Trade with China is more pathetic with the exports worth just Rs. 1.3 billion against the import of Rs. 179.2 billion. This is the gap of 137.8 times, making trade with China one of the most unbalanced among the larger trade partners.

However, perhaps Nepal is witnessing the most unbalanced trade with Argentina where imports are 2154 times higher than the exports. Imports and exports from the South American country are Rs. 21.5 billion and Rs. 1 million respectively.

Similarly, Nepal's trade deficit with Indonesia is Rs. 35.4 billion, UAE Rs. 27.7 billion, Malaysia Rs. 20.5 billion, Ukraine Rs. 16 billion and Australia Rs. 15.5 billion.

Nepal's largest export partners are India, United States of America, Germany, United Kingdom, Turkey, Canada and France. Nepal exported goods worth Rs. 15.5 billion to the USA, Rs. 3.4 billion to Germany, Rs. 2.6 billion to the UK, and Rs. 1.6 billion to Turkey. 

Published in The Rising Nepal daily on 22 May 2023.