Gold imports to Nepal have experienced a significant drop in the first quarter of the current fiscal year, reflecting changes in both global market conditions and domestic trade policies. According to data from the Department of Customs (DoC), only 132,564 grams (132.564 kilograms) of gold were imported from mid-July to mid-November.
This marked a steep decline compared to the same period last year when the country imported over 1,000 kilograms of gold. In terms of value, the first quarter of this fiscal year saw Rs 1.43 billion spent on gold imports, with the government collecting Rs 285.5 million in revenue. By comparison, during the first quarter of the previous fiscal year, Nepal imported 1,000.5 kilograms of gold, amounting to Rs 8.28 billion in foreign exchange spending, and the government collected Rs 1.23 billion in revenue.
The drastic reduction in gold imports is primarily driven by two key factors. First, the ongoing rise in global gold prices has made the metal significantly more expensive for consumers in Nepal, leading to reduced demand. As the price of gold has continued to climb on the international market, it has become less affordable for many people, which in turn has resulted in fewer imports of raw gold.
Second, the government’s decision to increase taxes on gold imports has further dampened demand. Higher customs duties and taxes have made it more costly to bring gold into the country, prompting both traders and consumers to scale back their purchases. This combination of global price hikes and domestic tax policies has led to a sharp reduction in the volume of raw gold entering Nepal.
Despite the drop in raw gold imports, there has been a modest increase in the import of gold jewelry. In the first quarter of the current fiscal year, Nepal imported Rs 198 million worth of gold jewelry, up from Rs 113.2 million during the same period last year. This slight rise in jewelry imports suggests that while the demand for raw gold may be weakening, the demand for finished gold products, such as jewelry, remains relatively stable.
In conclusion, the sharp decline in raw gold imports reflects a combination of external and internal factors, including rising international gold prices and higher domestic taxes. While jewelry imports have shown a modest uptick, the overall trend signals a shift in consumer behavior and trade patterns, as higher costs discourage large-scale gold imports. This shift could have broader implications for Nepal’s gold trade and its balance of payments in the coming months.
