Trade deficit widening with most global partners

Kathmandu, Apr. 8:  Nepal continues to struggle with a growing trade deficit, as it faces deficits with 126 out of its 160 trading partners in the first eight months of the current fiscal year. 

The trade statistics released by the Department of Customs showed that while Nepal’s exports have seen a notable increase, its imports continue to outpace exports, escalating the country’s trade deficit.

Nepal's exports grew by 57.2 per cent to Rs. 158.17 billion, while imports rose by 11.2 per cent to Rs. 1,145.56 billion during the first eight months of the current fiscal year compared to the same period last fiscal year. 

Despite this rise in exports, the country's trade deficit with the majority of its partners has remained significant, with a total deficit of Rs. 987.39 billion, marking a 6.22 per cent increase from same period of last fiscal year.

Nepal enjoyed trade surplus only with 34 of its 160 trade partner countries during the review period.

During the review period, the highest deficits were recorded with Nepal’s largest trading partners, India and China. 

Nepal’s trade deficit with India reached an overwhelming Rs. 563.67 billion, driven by imports worth Rs. 688.68 billion from India, while Nepal exported goods worth only Rs. 125 billion. 

India is the largest trading partner of Nepal with more than 60 per cent of the country’s trade undertaken with the southern neighbour.

The statistics showed that more than 79 per cent of Nepal’s exports have been directed to India and about 60 per cent of Nepal’s total imports have been from India.

Similarly, the deficit with China stood at Rs. 217.06 billion, with Nepal importing goods worth Rs. 219.18 billion from China, while exports were a meagre Rs. 2.12 billion.

In addition to these neighboring countries, Nepal has the third biggest trade deficit with Ukraine at Rs. 18.55 billion. Goods worth Rs. 18.55 billion were imported while goods only worth Rs. 4.7 million were exported to Ukraine during the review period.

The county has trade deficit with United Arab Emirates at Rs. 17.82 billion, with Australia at Rs. 11.67 billion, with Malaysia at Rs. 9.65 billion, with Thailand at Rs. 9.26 billion, with Brazil at Rs. 6 billion, with Canada at Rs. 5.01 billion, with France at Rs. 5.84 billion, with South Korea at Rs. 4.14 billion and with Japan at Rs.  2.83 billion during the first eight months of the current fiscal year.

Similarly, Nepal had a trade deficit with Indonesia at Rs. 9.40 billion, Qatar at Rs. 5.15 billion, with Saudi Arabia at Rs. 3.41 billion, with Singapore at Rs. 3.61 billion and with Canada at Rs. 5.01 billion.

The country incurred a trade deficit with Bangladesh at Rs. 2.54 billion, with Bahrain at Rs. 2.44 billion, with Oman at Rs. 2.51 billion, with Turkey at Rs. 2.92 billion, United States of America at Rs. 5.97 billion, Viet Nam at Rs. 4.05 billion and with Brunei Darussalam at Rs. 1.82 billion during the review period. 

Highest trade surplus with Afghanistan 

According to the report, the country had trade surplus with Afghanistan, Angola, Aruba, Austria, Bahamas, Bosnia and Herzegovina, Cayman Islands, Chad, Colombia, Croatia, Denmark, Fiji, Georgia, Iceland and Latvia.

Likewise, Nepal had trade surplus with Lebanon, Libyan Arab Jamahiriya, Maldives, Mali, Malta, Mauritius, Morocco, New Caledonia, Norway, Panama, Papua New Guinea, Russian Federation, Serbia (Europe), Seychelles, Sudan, Tajikistan, Uruguay, Yemen and Zambia.

But the surplus amount has remained too low to balance the ever-widening trade deficit of the country.

Nepal has high trade surplus with Afghanistan followed by Denmark. 

During the first eight months of the current fiscal year, Nepal had made a trade surplus of Rs. 657.9 million with Afghanistan and Rs. 189 million with Denmark.

During the period, the country exported goods worth Rs. 673.88 million to Afghanistan and imported goods worth Rs. 15.9 million. 

Nepal exported goods worth Rs. 455.1 million to Denmark while imported goods worth Rs. 266 million during the review period. 

During the review period, the country made a trade surplus with Latvia at Rs. 15 million, with Maldives at Rs. 15 million, with Croatia at Rs. 12 million, with Iceland at Rs. 11 million, with New Caledonia at Rs. 9.8 million, with Malta at Rs. 9.7 million and Norway at Rs. 6.9 million.