KATHMANDU, Aug 22: Nepal’s foreign trade saw a significant improvement in exports in the first month of the current fiscal year (FY 2026/27), although the trade deficit widened due to the continued rise in volume of imports.
According to data released by the Department of Customs on Friday, Nepal’s exports increased by 61.72 percent in the first month of the fiscal year. The country exported goods worth Rs 38.70 billion between mid July and mid-August, compared with Rs 23.93 billion in the corresponding month of the previous fiscal year. This represents an increase of Rs 14.77 billion in exports year on.
Imports also increased significantly during the review month. Nepal imported goods worth Rs 187.43 billion in mid-July to mid-August, compared with Rs 143.04 billion in the same month last fiscal year. Imports therefore increased by Rs 44.39 billion year-on-year.
Trade deficit exceeds Rs 148 billion
Despite the substantial growth in exports, Nepal’s trade deficit failed to narrow because of the much larger volume of imports. Nepal recorded a trade deficit of Rs 148.73 billion in the first month of the current fiscal year.
Nepal faces trade deficit with 133 countries
The trade deficit stood at Rs 119.10 billion in the corresponding period of the previous fiscal year. It has therefore increased by Rs 29.62 billion, or 24.88 percent, according to the Department of Customs.
Nepal’s earnings from exports remained significantly lower than its spending on imports. The wide gap between imports and exports continues to be the main driver of the country’s trade deficit.
Export growth more than double import growth
A positive aspect of the latest figures is that exports grew at a significantly faster rate than imports. Exports increased by 61.72 percent, while imports grew by 31.04 percent.
The figures indicate that Nepal’s export trade has gained some momentum over the past year. However, because the overall volume of exports remains much smaller than imports, the high percentage growth in exports has not yet had a major impact on the overall trade.
The figures show that for every Re 1 worth of goods Nepal exported, it imported goods worth around Rs 4.84. The ratio was around Rs 5.98 in the first month of the previous fiscal year.
This indicates some improvement in exports relative to imports.
Total foreign trade reaches Rs 226.14 billion
Nepal’s total foreign trade reached Rs 226.14 billion in the first month of the current fiscal year. Imports accounted for 82.89 percent of total trade, while exports accounted for 17.11 percent.
In mid-July to mid-August of the previous fiscal year, exports accounted for 14.33 percent of total foreign trade. The share increased to 17.11 percent in the first month of the current fiscal year.
Similarly, the share of imports declined from 85.67 percent last year to 82.89 percent this year. The shift indicates that exports have made a somewhat larger contribution to Nepal’s overall foreign trade.
Signs of improvement in trade structure
Analysts say the 61.72 percent growth in exports and the improvement in the import-export ratio can be viewed as positive signs for Nepal’s external trade. In particular, the increase in the share of exports in total trade indicates that Nepali goods may be gaining greater access to international markets.
Experts say the government’s challenge now is to sustain export growth, strengthen the competitiveness of Nepali products and reduce excessive dependence on imports.
