Nepal has been experiencing a trade deficit with Bangladesh for the past decade. The deficit began in Fiscal Year 2014/15, reversing the earlier surplus Nepal enjoyed in its trade with Bangladesh. Since then, the trade imbalance has persisted without significant improvement.

In Fiscal Year 2023/24, Nepal recorded a trade deficit of Rs 46.31 million with Bangladesh. Nepal exported goods worth Rs 463.18 million to Bangladesh, while it imported goods worth Rs 3.59 billion from the neighbouring country. The growing trade deficit has been exacerbated by the halt in the export of lentils, which previously helped balance trade with Bangladesh.

"Nepal has faced a trade deficit with Bangladesh for ten years," said Ram Prasad Regmi, head of the Mechi Customs Office. "From electrical goods to pressure cookers, we are importing a range of products from Bangladesh." However, he noted that the trade deficit with Bangladesh has been decreasing over the past few years.

According to the Department of Customs, the trade deficit in Fiscal Year 2022/23 amounted to Rs 5.18 billion, while in Fiscal Year 2021/22, the deficit was Rs 10.38 billion.

Pannalal Jain, the founding president of the Nepal Bangladesh Chamber of Commerce, believes that while it may take time to reduce the trade deficit with India, Nepal can potentially reverse its trade deficit with Bangladesh if the government takes the right steps. He pointed out that Bangladesh imposes an 80% customs duty on Nepali agricultural products, limiting Nepal’s export potential. He also highlighted that Myanmar's agricultural produce is entering Bangladesh illegally due to the high customs duties imposed on Nepali goods, leading to a loss of market share for Nepal.

Jain emphasized that an open trade agreement for agricultural products could help balance the trade deficit, especially as the demand for certain industrial products has declined. Government officials are optimistic that the sale of electricity to Bangladesh could help reduce the trade deficit. An agreement between Nepal, India, and Bangladesh to facilitate electricity exports from Nepal to Bangladesh is expected to be signed soon.

Two weeks ago, a team led by Mechinagar Municipality Mayor Gopal Bahadur Budhathoki visited Bangladesh to explore the potential for exporting Nepali agricultural products. In 2019, during the Nepal-Bangladesh Commerce Secretary-level meeting in Dhaka, the two countries agreed to provide duty-free access to 108 Nepali agricultural products. However, this bilateral agreement has not yet been implemented. Bangladesh also proposed customs duty exemptions on 50 products from Nepal, including fish, potato chips, refrigerators, batteries, garments, plastic items, cement, tobacco, tomato sauce, and biscuits.