Positive Export Trend

In view of ballooning trade deficit, Nepal has witnessed impressive trend in the export trade. It has recorded a double-digit growth in the first five months of the current fiscal year. Another positive thing is that the export of agricultural products, handicrafts and garments, tea and medicinal herbs has significantly increased. The country holds potential in these areas, requiring investment and incentives. The increment in the export of soybean oil, sunflower, cardamom, carpet, garments and tea and coffee has contributed to an increase in export trade during the review period. Although it is a positive indicator, the country's trade deficit has increased due to the astronomical volume of imports than exports. As per the statistics, Nepal faced a trade deficit of Rs. 579 billion during the first five months of the last fiscal year. 

However, a matter of concern is that there is a wide gap between import and export ratio. We are importing everything but are not focused on reviving our industries and being self-reliant even in the sectors that have prospects of improvement. Nepal should at least focus on being self-reliant in agricultural, poultry and dairy products. However, the country remains heavily dependent on imported goods. Nepal mostly imports refined petroleum, petroleum gas, rice and readymade garments and India is the primary market of these items. Reports show that over the last ten years, approximately 66 per cent of Nepal's exports have been with India. 

Despite being rich in resources, we have not been able to set up thriving industries. The industries like Bansbari Leather Shoes, Biratnagar Jute Mill, Bhrikuti Paper Mills, Gorakhkali Rubber Udhyog Ltd and Hetauda Cement Industry have remained shut down for long now. The dilapidated state of the industries shows the government has not worked to strengthen our industrial sector which is the backbone of product self-reliance and export trade boost. The closure of these industries has an adverse effect on our economy over the years and it marks a setback for us in our journey of being self-reliant and creating jobs. Moreover, we are exporting raw materials at a very low cost and importing refined goods at higher rates. 

 According to the trade statistics made public by the Department of Customs on Sunday, goods worth Rs. 73.65 billion were exported during the first five months (mid-November to mid-December) of the current fiscal year 2024/25. Our immediate neighbours India and China are the fastest-growing economies. However, we are still grappling with low productivity, a lack of industrialisation and infrastructure to facilitate industries and trade.  We should promote the use of locally produced goods to reduce the reliance on imported goods. Likewise, there is a need to increase import duties on nonessential and luxury goods.

The trend of worker migration to foreign countries in search of better earnings is on the rise.  So we should be able to check the exodus of youths, as the going out of youth especially skilled workers and professionals will deprive the nation with scarcity of capable human resource. We should focus on increasing agricultural yields through modern farming techniques, attracting foreign investment, expand electrification in rural areas which can decrease the dependency of the local people on biomass and imported fuels. The government should provide subsidies or tax incentives to export-oriented industries.