Trade Deficit Widens 10.15 Percent Due to Excessive Dependence on Imports

Nepal’s trade deficit widened by 10.15 percent in the first six months of the current fiscal year driven largely by a continued surge in imports despite a notable increase in exports during the review period.

According to data released by the Department of Customs on Wednesday, Nepal’s total foreign trade increased by 17.36 percent to over Rs 1081 billion during mid-July and mid-January of FY 2025/26. The country’s trade volume in the corresponding period of the previous fiscal year stood at Rs 921 billion.

The trade deficit stood at around Rs 797 billion. Imports during the six-month period rose by 14.18 percent to over Rs 939 billion, compared to Rs 822 billion in the same period last year.

Exports, although growing at a faster pace, remained significantly lower than imports. Nepal exported goods worth over Rs 142 billion in the first half of the fiscal year, marking a 43.76 percent increase from Rs 98.87 billion recorded a year earlier.

Despite the sharp rise in exports, imports continued to dominate Nepal’s foreign trade. Of the total trade volume during the review period, imports accounted for 86.86 percent, while exports made up just 13.14 percent.

Economists say the persistent gap between imports and exports remains a key challenge for the economy, as higher import dependence continues to exert pressure on the country’s external sector, even as export earnings show signs of recovery.