Nepal's total imports have witnessed a notable upswing in the first eleven months of the fiscal year 2024/25, increasing by 13.1% compared to the same period last year. According to data released by the Nepal Rastra Bank, imports rose to Rs. 1.64 trillion, up from Rs. 1.45 trillion during the corresponding period of FY 2023/24.

This surge comes after a marginal contraction of 1.8% in FY 2023/24, signaling a sharp rebound in international trade activity amid improving domestic consumption and capital goods demand.

India Maintains Lead, But Share Contracts Slightly

Imports from India, Nepal's largest trading partner, rose by 7.6%, reaching Rs. 977.13 billion in the first eleven months of 2024/25. Though still dominant, the growth is relatively moderate when compared to the import increase from other regions. This suggests a diversification of sourcing, particularly toward China and third countries.

India had seen a 3.1% decline in the same period last year, which analysts attributed to tightening foreign exchange reserves and fuel import restrictions at the time. The 2024/25 rebound is supported by increased imports of petroleum products, automobiles, and pharmaceuticals.

Imports from China Continue to Climb Sharply

Imports from China surged to Rs. 314.57 billion, a 15.3% increase from the previous year’s figure of Rs. 272.81 billion. This builds on an already strong growth of 34.8% in 2023/24. The two-year compound growth indicates rising dependency on Chinese electronic goods, construction materials, and machinery.

With ongoing infrastructure projects and a shift in consumer electronics preferences, China’s role as a supplier is expected to expand further, possibly overtaking some segments currently dominated by Indian imports.

Significant Recovery in Imports from Other Countries

The most striking growth is seen in imports from other countries, which soared by 29.5%, from Rs. 272.59 billion in 2023/24 to Rs. 353.08 billion in 2024/25. This recovery follows a sharp 20% decline the previous year and reflects resumed trade with regions like the Gulf, Europe, and Southeast Asia.

The resurgence may be attributed to diversified procurement of industrial inputs, refined petroleum products, and luxury consumer goods that were temporarily restricted or deprioritized in the post-COVID recovery period.

Economists suggest that while import growth is a sign of economic recovery, it may reignite concerns about the widening trade deficit and pressure on foreign exchange reserves. The central bank may need to revisit import control policies or strengthen export incentives to restore trade balance.

Looking ahead, the upcoming months will be critical in determining whether this import growth sustains into FY 2025/26 or stabilizes as internal production and industrial substitutions improve.