Yawning trade deficit: It’s hurting our economy

Nepal is one of the economically struggling sovereign states. The country is lagging far behind due to persistent political upheavals, underdeveloped manufacturing industries and lack of infrastructure. Nepal’s foreign trade is insignificant as the nation exports significantly less in comparison to the bulk of imports – the imports surpass exports by multiple folds. As a result, the yawning trade deficit is hurting the country’s economy.

Though the government of Nepal established the Trade and Export Promotion Centre (TEPC) as a national trade promotion organisation in 2006, there has not been any perceptible progress in international trade. The imports are drastically increasing every year, while export is shrinking. Nepal hence has become an import-based economy.

Nepal imports products from more than 100 nations and exports products to about 135 nations and 175 economic zones across the globe. India and China are the major import partners of Nepal with 65.1 per cent and 12.6 per cent of total imports from respective nations (TEPC, 2018).

On the other hand, India, the USA, Turkey, Germany, the UK, and China are the major export partners of Nepal with 56.6 per cent, 11.2 per cent, 6.4 per cent, 3.9 per cent, 3.4 per cent, and 3 per cent of total exports from the respective countries (TEPC, 2018).

High-speed diesel, MS Billet, Gold (semi-manufactured forms), cement clinkers, and LPG were the top five imports of Nepal in 2017 with their respective import value of 7.1 per cent, 4.7 per cent, 2.6 per cent, 2.5 per cent, and 2.3 per cent of total imports (TEPC, 2018).

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