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FY 2017-18: Nepal Witnesses Record Slump in Trade Numbers
During the period of mid-July 2017 and mid-June 2018 the country’s export-import ratio showed as 1:14.9
In a dismaying revelation made by Nepal’s Department of Customs (DoC), it was noted that Nepal’s trade deficit increased to a record high of more than Rs. 1 trillion in the first 11 months of FY 2017-18 owing to the rising import expenses and decreased export earnings.
As per the department’s records, the country displayed a decline in trade balance worth Rs 103 trillion during the review period. When compared, the import figures stood at Rs 10 trillion and the export figures at Rs 74.32 billion.
Over the passage of time, the imports shot up by 23.82 percent in comparison with a 10.46 percent jump in experts.
During the period of mid-July 2017 and mid-June 2018, the country’s ‘export-import ratio’ was 1:14.9 indicating an import spend of Rs 14.9 against an export earning of every Rs 1.
Explaining the situation, former Commerce Secretary Purushottam Ojha says factors like supply constraints and underlying non-tariff barriers with trading partner countries like India have been responsible for Nepal’s poor exports.
It is important to note that India is Nepal’s only biggest trading partner with the total trade of 65 percent.
Ojha feels that Nepal experiences challenges over exporting products such as vegetables, aromatic plants and herbs to India.
“Although the Nepal-India Trade Treaty revised in 2009 talks about improving cooperation for trade, it has not happened in practice,” says Ojha.
Some Trends in the Nepal’s Trade Business during FY 2017-18:
It is noteworthy that Nepal has trade relations with 153 countries but was rewarded with a trade surplus from only 27 countries during the period
The country profited from its relations with Turkey with a surplus of Rs. 1.93 billion, followed by United Kingdom at Rs 336.71 million
The country has the biggest trade deficit from its business with India, marked at Rs 689.85 billion. While the country received Rs 42.46 million from its exports to India, it spent Rs 732.31 billion on its imports
The country spent the most on fuel import accounting to Rs 175 billion, followed by mills & machinery at Rs 115.30 billion, iron & steel at Rs 112.11 billion, vehicles at Rs 77.82 billion and electronics & telecommunications at Rs 69.81 billion
Essentials such as mate, spices, coffee and tea earned Rs 8.49 billion for Nepal
Articles such as carpets, apparel, yarn and iron & steel stood as the top five exports from the country
DoC records depict increasing dissatisfactory trade with countries like Indonesia, Vietnam, China and Thailand.