Foreign Trade Rises by 13.3% in FY 2024/25, But Trade Deficit Remains High

According to the latest data released by Nepal Rastra Bank, Nepal’s total foreign trade in FY 2024/25 (Nepali FY 2081/82) increased by 13.3%, reaching Rs. 21.36 trillion, compared to Rs. 18.83 trillion in the previous year.

During the review period, imports rose by 12.5%, totaling Rs. 19.18 trillion, while exports grew by 21.5%, amounting to Rs. 2.18 trillion.

Major Imports

Nepal’s key imports included petroleum products, gold, automobiles, machinery, medicines, mobile phones, electrical equipment, raw materials, and construction goods. These items accounted for the bulk of the country’s import bill.

Major Exports

On the export side, major items were handmade carpets, woolen yarn, ready-made garments, metal products, ayurvedic medicines, paper, tea, ginger, resin, and wooden products. Among these, handmade carpets (rugs) continued to dominate Nepal’s export earnings.

Rising Trade Deficit

Despite growth in exports, the trade gap widened further. The trade deficit reached Rs. 17.99 trillion, up from Rs. 16.20 trillion in the previous year. Analysts note that while exports have shown progress, the overwhelming scale of imports remains the primary driver of the growing deficit.

Trade Structure

India remained Nepal’s largest trading partner, accounting for 64.7% of total imports and 80.1% of total exports. Trade with China and other countries also increased, but Nepal’s heavy reliance on India persists.

Although exports registered double-digit growth in FY 2024/25, the persistently high level of imports kept the trade deficit alarmingly wide. Economists warn that unless Nepal strengthens its productive sectors and reduces dependence on imports, the imbalance in foreign trade will continue to pose long-term economic challenges.