Boosting Export Trade

Amidst the ballooning trade deficit, the first month of the current fiscal year witnessed an encouraging increase in export trade. According to the latest trade statistics released by the Department of Customs, Nepal's export trade nearly doubled in the first month of this fiscal year compared to the same period last year.   The volume of export trade jumped to Rs. 23.93 billion in the first month of this fiscal year, up from Rs. 12.22 billion a year ago, which is almost a whopping increase of 96 per cent.  However, the volume of export trade could be further higher if electricity export is included in this figure. Electricity is not a commodity that passes through customs, and the latest trade statistics have not included this.  

However, when we compare the export trade with the import trade of the same period, it is highly disappointing. The country exported goods worth Rs. 143.04 billion in the first month, which means a deficit of Rs. 116.15 billion. The export trade also saw an increase of 11.42 per cent in the first month.  When the trade deficit of a single month is Rs. 116.1 billion, the total trade deficit may reach almost Rs. 1400 billion this fiscal, while the total value of export trade will be less than Rs. 300 billion. The highest export volume as of now was recorded at Rs. 277 in 2024/25.  

Of the goods exported in the first month, soybean oil's share is the highest at 45 per cent.  A news report published in this daily stated that Nepal exported soybean oil worth Rs. 10.69 billion in the first month of the current fiscal. Likewise, sunflower oil and palm oil were also key export items. However, these are not the products of Nepal. Nepal imports crude soybean and other oils before exporting them. Ironically, the country imported soybean oil worth Rs. 10.8 billion, crude palm oil worth Rs. 1.28 billion, and sunflower oil worth Rs. 822 million, but their export volume was Rs. 10.69 billion, Rs. 714 million, and Rs. 651 million, respectively. Although these oils shared the largest portion of export trade, they could not be reliable items, as they have to be imported, and any new trade policy introduced by the exporting countries could hurt their trade at any time

Of course, Nepal should diversify its export trade by including more domestic products and increasing their production, mostly agro products. When tea and coffee, cardamom, and dog chew have emerged as the key export items, efforts should be made to increase their production. Gingers and herbs could also be added to this list. However, the government should facilitate their smooth export, as there have been incidents in which their export was halted due to some policy introduced by the southern neighbour. While carpet and garments are still dominant export items, genuine efforts need to be made to enhance their quantity and quality. 

An increase in export trade obviously demands the establishment of more industries, which will also create employment in the country.  Focus should be on sustainable industries based on local production. In recent years, Nepal has started exporting electricity to India. This year, the power was also exported to Bangladesh. When several hydro projects are under construction or are in the final phase of construction, the country will be exporting more power in the coming years. This will increase export trade and contribute to narrowing trade deficit as well.