Himal Press 
KATHMANDU: Nepal’s trade deficit widened by nearly 15% over the first 10 months of the current fiscal year.
According to the foreign trade data of the first 10 months of fiscal year 2025/2026 released by the Department of Customs on Friday, total trade deficit reached Rs 1,443.67 billion, up 14.92% from Rs 1,256.27 billion in the same period of the previous fiscal year.
The deficit is now just about Rs 200 billion short of the government’s revised budget of Rs 1,688.32 billion for the current fiscal year. The budget had been downsized from Rs 1,964.11 billion due to sluggish development spending and weaker-than-expected revenue collection.
The surge in the deficit comes as both imports and exports posted double-digit growth. While imports rose by 14.82% to Rs 1,692.64 billion, exports grew at a similar pace of 14.25% to Rs 248.96 billion. However, a small export basket meant export growth was insufficient to contain the rising trade deficit.
Total foreign trade expanded by 14.75% to Rs 1,941.60 billion. Imports accounted for a whopping 87.17% of total trade, while exports contributed just 12.82%. The imports-to-exports ratio stood at 6.79, slightly up from 6.77 in the previous fiscal year.
The marginal decline in export share highlights structural weaknesses in Nepal’s export capacity due to limited industrial diversification and competitiveness.
Three out of the top five imported commodities during the period were petroleum products. During the review period, Nepal imported diesel worth Rs 130.93 billion. Likewise, the country imported crude soybean oil worth Rs 106.82 billion, petrol worth Rs 58.63 billion, sponge iron worth Rs 48.05 million, and LPG worth Rs 46.13 billion.
Soybean oil continued to top the list of export commodities in the review period. Data show Nepal exported soybean oil worth Rs 101.26 billion. Next were big cardamom (Rs 11.42 billion), hand-knotted carpet (Rs 8.48 billion), sunflower oil (Rs 7.41 billion), and palm oil (Rs 5.56 billion).
Five of Nepal’s most exported products are processed oil, which Nepal exports to India by adding some value to crude oil imported from countries as far as Argentina. These exports are based on the duty-free facility provided by regional trade agreements. Any change in the duty structure by India can erase this trade advantage for Nepal.
