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Sanjay Kathuria, TG Srinivasan and Swarnim Wagle

Senior Fellow at the Institute of South Asian Studies, Singapore, and Visiting Professor at Georgetown University and Ashoka University. (Twitter: @Sanjay_1818) T.G. Srinivasan is an independent Economics Consultant and former Senior Economist of the World Bank Swarnim Wagle is a former Vice Chair of the National Planning Commission of Nepal. (Twitter: @SwarnimWagle)

How trade spats increase poverty: the India-Nepal Episode of 2015

Published On: June 23, 2021 07:55 AM NPT By: Sanjay Kathuria, TG Srinivasan and Swarnim Wagle

In September 2015, there was a huge trade disruption between Nepal and India that reduced Nepal’s imports from India by 40 percent. Given Nepal’s dependence on imports from India, the decline in trade is likely to have temporarily increased the number of poor people in Nepal by nearly 17 percent, or 1.2 million people. Clustering of people around the poverty line and dependence on net food imports are likely causes for some provinces being more severely affected by the trade disruption. This human-made crisis exacerbated the impact of an earthquake that devastated Nepal in May 2015.