KATHMANDU, Sept 25: Nepal’s foreign trade volume declined 5.32 percent with a decline in both imports and exports in the first two months of the current fiscal year.
The records maintained by the Department of Customs (DoC) show that the country’s trade volume stood at Rs 286.19 billion during mid-July and mid-September, down from Rs 302.28 billion during the same period last year. The decline in the total trade has been attributed to the government revising its taxation policy on the imported goods amid the ongoing economic slowdown.
The DoC records show that the country’s import expense during the period was down 5.06 percent to Rs 259.74 billion. Likewise, the export earnings also fell 7.79 percent to Rs 26.44 billion.
According to traders, the decline in imports was due to the high interest rates of banks and a massive fall in income of people caused by recession. A heavy decline in imports has adversely affected the revenue collection of the government.
The records with the Financial Comptroller General Office (FCGO) show that the revenue collection recorded Rs 141.07 billion, down from Rs 154.23 billion in the review period. The government collected only 76 percent of the targeted amount under the heading of customs revenue.
Likewise, the country’s export was affected by a heavy decline in cross-border trade of edible oils. The government this year revised the policy of subsidizing customs duty on import of raw materials of palm oil, soybean oil and sunflower oil. In addition, Nepali exporters have been hard hit after India adopted flexible policy on its imported edible oils from countries other than Nepal.
With a heavy decline in the import volume, Nepal witnessed its trade deficit slump by 4.74 percent. In the review period, the negative trade balance dropped to Rs 233.30 billion from Rs 244.91 billion.