Nepal suffers a trade deficit of Rs 1.454 trillion, a decline of 15.45 percent, in the last fiscal year, thanks to the government adopting measures to check imports citing the depleting foreign currency reserves along with a fall in the income of people due to recession.
The records with the Department of Customs(DoC) show Nepal suffers a trade deficit in 2021/22 of Rs 1.720 trillion. In the last fiscal year, it declined by Rs 266 billion, giving a respite to the country from an outflow of the foreign currency equivalent to the aforementioned amount.
The decline in the trade deficit resulted from a notable fall in the country’s import expenses. According to the DoC, Nepal imported goods worth Rs 1.611 trillion, a decline of 16.08 percent during the review period. The decline in the country’s expenses abroad has been attributed to the government’s imposition of a ban on the import of luxury items that was in place for almost six months in the last fiscal year.
In December 2022, the government lifted the 10-month long ban on the import of luxurious goods. Subsequently, on January 19, Nepal Rastra Bank also removed the provision of up to cent percent cash margin, which the importers needed to maintain against their letters of credit (LCs) while importing goods.
The DoC records show that the imports jumped after the import restrictions were put to an end. Until mid-January 2022/23, the country’s import expenses stood at 792.66 billion. In the six months following the complete removal of the import restrictions, the country imported goods worth Rs 818.34 billion.
The import amount soared mainly in the latter months toward the end of the last fiscal year. As of mid-March of the review period, the import figure was Rs 1.058 trillion, which rose to Rs 1.201 trillion by mid-April. Likewise, it jumped to Rs 1.480 trillion by mid-June. Just in the last one month of the fiscal year 2022/23, Nepal imported goods worth Rs 131 billion.
Along with the imports, the export earning of the country also declined 21.44 percent. Nepal earned mere Rs 157.14 billion from exports last year.
Top five imports in FY 2022/23:
Items Amount
Petroleum products Rs 278.76 billion
Iron products Rs 43.60 billion
Crude soybean oil Rs 35.58 billion
Coal and related products Rs 27.12 billion
Crude palm oil Rs 25.91 billion
