Trade Expands, Deficit Persists

Nepal’s foreign trade jumped 26.04 percent year-on-year in the first quarter of fiscal year 2025/26, as both exports and imports recorded sharp increases, according to the latest Foreign Trade Statistics released by the Department of Customs.

Between mid-July and mid-October 2025, total trade reached Rs 540.86 billion, up from Rs 429.13 billion during the same period last year. Imports rose 19.79 percent to Rs 468.08 billion, while exports surged 89.64 percent to Rs 72.78 billion.

Refined soybean oil continued to dominate Nepal’s export basket. Its outbound shipments were valued at Rs 30.69 billion. Other major exports included woollen and fine animal-hair carpets and textile floor coverings (Rs 2.57 billion) and sunflower-seed and safflower oil (excluding crude) and their fractions (Rs 2.13 billion).

On the import side, crude soybean oil topped the list at Rs 30.24 billion, followed by diesel (Rs 20.69 billion), diammonium phosphate (Rs 17.11 billion), petrol (Rs 16.76 billion), liquefied petroleum gas (Rs 13.98 billion), and smartphones (Rs 13.62 billion).

Despite the robust export growth, Nepal’s trade deficit widened 12.18 percent to Rs 395.3 billion in the three-month period, compared to Rs 352.37 billion a year earlier.

In FY 2024/25, which ended on July 16, Nepal’s exports had soared 81.8 percent to a record Rs 277.03 billion – the highest ever – up from Rs 152.38 billion in FY 2023/24, largely driven by refined edible oil exports. Imports during the same period grew 13.25 percent to Rs 1,804.12 billion from Rs 1,592.99 billion the previous year.

Refined soybean oil exports alone amounted to Rs 106.79 billion last fiscal year, buoyed by India’s hike in import duties on crude and edible oils in mid-September 2024. However, New Delhi’s subsequent duty cut in May 2025 has squeezed margins for Nepali refineries, which had been benefiting from duty-free access to the Indian market under the South Asian Free Trade Area (SAFTA) agreement.