Nepal’s import expenses start to leap in successive months after government lifted import restrictions

Published On: April 19, 2023 09:30 PM NPT By: Republica | @RepublicaNepal

Last month, Nepal spent Rs 143.12 billion on imported goods: petroleum products’ expense stood Rs 261 billion

KATHMANDU, April 19: Nepal’s expense on imported goods surged by a notable amount in the past one month between mid-March and mid-April.

According to the Department of Customs (DoC), the country’s import expenses stood at Rs 143.12 billion during the review period. The import figure in the review period was one of the highest in monthly expenditure of the country.

The DoC records show that the import expenditure as of mid-March this fiscal year was Rs 1.058 trillion, which rose to Rs 1.201 trillion by the end of the first nine months in mid-April. The import figure has started to increase mainly after the government lifted restrictions on imports.

In December 2022, the government lifted a 10-month long ban on import of luxurious goods. Subsequently, on January 19, Nepal Rastra Bank also removed the provision of cash margin, which the importers need to maintain against their letters of credit (LCs) while importing goods.

Citing an improvement in the foreign currency reserves that once plunged to a very low level, the government and the central bank lifted the restrictions. However, the surging imports have again created threat to the government when it comes to the draining of foreign currency.

According to the DoC, the imports figure stood Rs 126 billion in the month between mid-January and mid-February, which rose to Rs 139 billion in the following month. In the last month alone, the country imported goods worth Rs 143 billion, which was Rs 4 billion more than the previous month.

In the first nine months, the country’s trade deficit stood at Rs 1.083 trillion, a decline by 17.06 percent compared to the same period in the last fiscal year. During the period, the exports declined by 26.34 percent, while the imports fell by 18.08 percent.

Meanwhile, Nepal spent Rs 261 billion on imports of petroleum products in the review period. Likewise, the country imported iron and steel products worth Rs 100 billion, electric appliances worth Rs 73.67 billion and vehicles and parts worth Rs 36.44 billion.