While exports rebounded after a slump in the previous year, the growth rate of imports declined markedly, resulting in a significant fall in the growth of trade deficit.[break]
However, trade concentration with India reached its peak constituting about two thirds of Nepal´s total trade. The export trade had dropped by 10.2 percent in the previous year, recorded a growth of 6.1 per cent to Rs. 64.56 billion in the review year. Exports had amounted to Rs. 60.82 billion in the previous year.
Exports to India went up by 8.4 percent during the review year in contrast to a drop by 2.5 percent in the last year. Exports to other countries increased by 1.8 percent in contrast to a plunge by 22.0 percent in a year ago. The increase in the exports to India was mainly ascribed to the increase in the exports of zinc sheet, jute goods, juice, cardamom and thread, among others.
Exports to other countries increased due mainly to an increase in the export of pashmina, woolen carpet, tanned skin and tea, among others.
In 2010/11, merchandise imports increased by 5.5 percent to Rs. 394.90 billion, primarily led by strong growth (43.9 percent) of petroleum product import. Such imports had risen by 31.6 percent to Rs. 374.34 billion in the last year. On a monthly basis, the merchandise imports declined by 2.9 percent in June/July of the current fiscal year in comparison to the value of the previous month.
Imports from India soared by 20.5 percent during the review year compared to a growth of 33.7 percent in the last year.
Likewise, imports from other countries plummeted by 15.2 percent in contrast to a growth of 28.8 percent in a year ago. In the review year, the import of petroleum products, M.S. billet, medicine, cold rolled sheet in coil and hot rolled sheet in coil, among others, increased from India whereas import of gold, readymade garments, steel rod & sheet, other machinery & parts and betel nuts declined from other countries.
Due to the improvement in the export and reduction in the growth of import, total trade deficit went up only by 5.4 percent to Rs. 330.34 billion in the review year. Trade deficit had expanded by 44.6 percent in the last year. Trade deficit with India rose by 23.2 percent during the review year compared to a growth of 45.9 percent in the last year. On the contrary, trade deficit with other countries declined by 17.8 percent compared to a growth of 43.1 percent in a year ago.
The ratio of export to import increased marginally to 16.3 percent in the review year compared to a growth of 16.2 percent in the previous year. The share of India in Nepal´s total trade stood at 66.4 percent in the review year as compared to 59.1 percent a year ago.
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