Trade deficit widens 34.71% to Rs 532.49 billion in Q1

KATHMANDU: Nepal’s trade deficit widened by 34.71% to Rs 532.49 billion in the first three months of fiscal year 2026/27, as imports continued to outpace exports despite stronger export growth.

According to foreign trade data for the first quarter of 2026/27 released by the Department of Customs on Wednesday, the trade deficit increased from Rs 395.30 billion in the same quarter of the previous fiscal year.

Nepal recorded its largest trade deficit with India, its biggest trading partner. The country imported goods worth Rs 366.78 billion from India, while exports to its southern neighbor totaled just Rs 95.59 billion, resulting in a trade deficit of Rs 271.19 billion.

Nepal also recorded trade deficits of Rs 133.63 billion with China and Rs 35.63 billion with Argentina. Crude oil accounted for a major share of Nepal’s imports from Argentina in the review quarter.

Nepal’s total foreign trade, meanwhile, expanded by 40.71% to Rs 761.07 billion during the review period. Imports rose 38.18% to Rs 646.78 billion, while exports surged 57.03% to Rs 114.29 billion.

Despite faster export growth, the country’s export earnings remained far below its import bill due to a small export basket. Imports accounted for 84.98% of total foreign trade, while exports made up only 15.02%. The export-to-import ratio stood at 5.66%, down from 6.43% a year earlier.

Crude soybean oil was Nepal’s largest import by value, with 298.49 million liters worth Rs 52.60 billion imported during the review period. Diesel imports amounted to 288,468 kiloliters worth Rs 47.31 billion, while petrol imports totaled 181,554 kiloliters valued at Rs 24.62 billion.

Nepal also imported 171.98 million kilograms of liquefied petroleum gas worth Rs 23.19 billion and 165.18 million kilograms of fertilizers worth Rs 19.30 billion.

Soybean oil topped the export list, with 217.10 million kilograms worth Rs 52.60 billion exported during the period. Jute ranked second, with exports of 39.72 million square meters valued at Rs 2.96 billion.

Large cardamom exports amounted to 1.45 million kilograms worth Rs 2.57 billion. Sunflower and safflower oil exports totaled 11.23 million liters valued at Rs 2.53 billion, while refined palm oil exports reached 7.31 million liters worth Rs 2.42 billion.

The figures show that Nepal’s foreign trade expanded in the first quarter, but the persistent gap between imports and exports continued to drive the trade deficit higher.