[CLSTR]
< Back to situation

[REVISION HISTORY]

Nepal trade dynamics and widening deficit FY 2025/26

Updated 2 times since CLSTR started tracking revisions of this situation.

What changed

2026-08-23 06:15 UTC → 2026-08-23 22:25 UTC · added removed

Nepal-India Nepal trade dynamics and widening deficit FY 2025/26

In the 2025/26 fiscal year, Nepal’s trade with India and other partners presented a complex landscape of rising volumes and widening deficits. Total merchandise exports rose 13.8% to NPR 315.29 billion, heavily supported by refined soybean oil. This sector, which generated NPR 128.74 billion, accounted for approximately 40.8% of total export earnings, with the industry relying on crude oil imported from South American suppliers like Argentina. However, specific sectors faced challenges. Nepali tea shipments through the Kakarvitta border fell from 15,311 to 13,045 metric tons, reducing export earnings by roughly NPR 640 million. Chief Customs Administrator Shivlal Neupane attributed this decline to Indian market price fluctuations, non-tariff quality testing barriers, and shifting global demand. Simultaneously, Nepal’s import bill grew significantly. Petroleum imports rose 15.5% to NPR 332.27 billion, representing nearly 16% of total imports, with diesel being the largest component. At the start of the current fiscal year (Shrawan), a surge in imports—including electric vehicles from China and India—outpaced export growth, causing the trade deficit to widen by 24.88% to NPR 148.73 billion. Additionally, Recent data from the Plant Quarantine Office first month of the current fiscal year shows exports rose 61.72% to Rs 38.70 billion, while imports increased 31.04% to Rs 187.43 billion. Electric vehicle (EV) imports have surged; electric car imports rose fourfold to 689 units compared to the previous year, and electric two-wheeler imports reached 5,174 units, accounting for 18.60% of total two-wheeler imports. Traders cite expanding charging infrastructure and rising petroleum prices as drivers for this shift. This transition coincides with rising energy demand. The Nepal Electricity Authority reported that over NPR 24 billion per capita electricity consumption rose 5.98% to 418.31 units in agricultural products, including grains and fruits from India, China, Australia, and Bangladesh, were imported through the eastern border during the previous last fiscal year. However, the authority faced distribution challenges, with system leakage rising to 10.44%, resulting in an estimated revenue loss of Rs 14 billion.

Versions

  1. 2026-08-23 22:25 UTC Nepal trade dynamics and widening deficit FY 2025/26
  2. 2026-08-23 06:15 UTC Nepal-India trade dynamics and widening deficit FY 2025/26
  3. 2026-08-03 10:04 UTC Nepal-India trade dynamics FY 2025/26

Only revisions since CLSTR began indexing content versions appear here. Select a version to see what changed compared to the one before it.