Trade in Nepal

Nepal has been pursuing an open and market-oriented trade policy. The country is a member of the WTO, SAFTA, BIMSTEC, and MIGA. The Trade Policy 2015 aims to create a conducive environment for the promotion of trade to make it competitive at the international level. The Government of Nepal has incorporated a trade agenda as a main strategy in its development plan. The country is trying to increase exports and minimize the trade deficit. Currently, the Nepal Trade Integration Strategy (NTIS) 2016 is being implemented to increase trade competitiveness.

Foreign Trade Composition of Nepal of 2020/21 (in "000 NRs):

S.N. Country Export Import

1. India 917,603,945 106,372,055

2. China 1,016,057 233,923,060

Total 141,124,080 1,539,837,068

Major Exports

Brooms and brushes, Paintings, drawings, sculptures and statuary, Sanitary towel (pad), Iron and Steel Products, Woolen Carpets, Yarns, Textiles, Readymade Garments/ Shawls, Juices, herbs, tea, cardamom, Hides and skin, Footwear, Handicrafts

Major Imports

Petroleum Products, Iron and Steels, Machinery and parts, Electronics and electrical equipment, Pharmaceuticals, Fertilizers

Priority Export potential Sectors/Products (As identified by NTIS, 2016) :

1. Agrobased products

Cardamom

Ginger

Tea

Medicinal and Aromatic Plants

2. Craft and manufacturing products

All fabrics, textile, yarn and rope

Leather

Footwear

Pashmina

Carpets

3. Services

Skilled and semi-skilled professionals in various categories (Remittance generating services)

IT and BPO, and IT Engineering

Tourism (including leisure, business, education, and medical)

Other export potential products and services:

1. Hydroelectricity

2. Bottled Mineral Water (Himalya Water)

3. All fabricated steel and metals

4. Coffee

5. Fruit and vegetable juices

6. Honey

7. Instant noodles

8. Lentils

9. Paper products

10. Ready-made garments

11. Semi-precious stones

12. Silver Jewellery

13. Wool products

Nepal-China Trade Relations

Nepal and China have been doing trade since ancient times. The border points that are open between the two countries are Kodari-Nyalam, Rasuwa-Keyrong, Yari(Humla)-Purang, Olangchunggola-Riwu, Kimathanka Riwu, and Nechung(Mustang)- Lizi. However, border trade takes place through forty different passes. The border inhabitants of the two countries may, within the area of 30 Kilometers from the border, carry on the traditional trade on a barter basis. Kodari-Nyalam and Rasuwa-Kerong are the two points of international trade via land route. Currently, the land routes have a permitted quota of vehicles from China to Nepal owing to the outbreak of the COVID-19 pandemic. At present, China is second second-largest trading partner. Though the volume of bilateral trade is small, the trade deficit against Nepal is widening. Nepal has duty-free access for 7787 items in China. The Government of Nepal is encouraging businessmen to increase exports to China. Along with bilateral trade agreements, there is also an intergovernmental trade and economic committee at the Vice Ministers' level for enhancing trade and economic activities between the two countries. There is also a separate trade facilitation mechanism between Nepal and the TAR of China. Nepal and TAR of China also hold Nepal-China Tibet Economic and Trade Fair every two years in Kathmandu and Lhasa alternatively.