Submit your Article

Nepal’s foreign trade expanded sharply in the first five months of the current fiscal year 2025/26, driven by a strong rebound in exports and rising imports. However, the latest data also underline persistent structural weaknesses—most notably a widening trade deficit and growing dependence on a narrow range of export items.

According to figures released by the Department of Customs, Nepal’s total foreign trade reached Rs 882.69bn by mid-December, marking a 20.07 percent increase compared to the same period of the previous fiscal year. Imports stood at Rs 766.18bn, while exports amounted to Rs 116.5bn.

Although exports surged by an impressive 58.17 percent year-on-year, they accounted for just 13.2 percent of total trade, highlighting the country’s continued reliance on imports to meet domestic demand.

Ballooning trade deficit persists

Despite strong export growth, the trade deficit widened to Rs 649.68bn in five months.

Trade imbalances with Nepal’s two largest trading partners—India and China—remain particularly stark. Nepal incurred a trade deficit of over Rs 339.02bn with India during the review period. Imports from India totaled Rs 434.06bn, while exports were limited to Rs 95.04bn.

The situation with China was even more skewed. Nepal imported goods worth Rs 163.73bn from China but exported just Rs 46.68m, resulting in a trade deficit of Rs 163.26bn.

Nepal posted a trade surplus with only a handful of countries. Romania emerged as the top surplus destination, with Nepal recording a net trade gain of Rs 63.47m over the five-month period. Sweden and Iraq were among other countries where Nepal maintained a positive trade balance. However, trade volumes with these countries remained small.

Petroleum imports overtake total exports

For the first time this fiscal year, fuel imports have exceeded Nepal’s total export earnings. 

In the five-month period, Nepal spent Rs 121bn on fuel imports which surpassed total export earnings of Rs 116bn.

Petroleum products continue to dominate the import basket, reflecting Nepal’s heavy dependence on imported energy.  Nepal imported Rs 45.6bn worth of diesel, Rs 27.33bn worth of petrol and Rs 22.39bn worth of LPG, and Rs 8.34bn worth of aviation turbine fuel (ATF) during the period.  

The country also imported lube oil and petroleum bitumen, among others, during the period.

Heavy reliance on soybean oil exports

Soybean oil emerged as Nepal’s single largest export item, accounting for Rs 46.55bn in the first five months. This accounts for 40.12 percent of total exports. 

Nepal also exported sunflower oil worth Rs 3.73bn during the same period.

This export surge is largely driven by the duty-free access Nepal enjoys under the South Asian Free Trade Area (SAFTA) in India. While India imposes high tariffs—up to 35.75 percent—on refined vegetable oils imported from third countries, Nepali products enter the Indian market at zero duty.

Taking advantage of this preferential access, Nepali firms import crude soybean and sunflower oil from global markets, refine them domestically, and re-export the finished products to India.

However, experts warn that this model is highly vulnerable. Any significant reduction in India’s tariffs on vegetable oils from other countries could erode Nepal’s competitive edge and potentially wipe out nearly half of its exports to India.

In the previous fiscal year, Nepal exported soybean oil worth Rs 106.79bn and sunflower oil worth Rs 12.33bn. Together, they accounted for 43 percent of total exports, underscoring the concentration risk in Nepal’s export profile.

Electric vehicle imports decline sharply

Electric vehicle (EV) imports fell sharply in the first five months of 2025/26, even as overall car imports edged up.

Customs data show EV imports declined by 23.55 percent to 3,800 units, down from 4,695 units a year earlier. The total value of EV imports stood at Rs 8.95bn which generated Rs 5.64bn in government revenue.

Importers attribute the decline largely to stockpiling at the end of the previous fiscal year amid expectations of tax changes.

In contrast, imports of petrol-powered vehicles surged. Petrol car imports rose by 50.68 percent to 2,801 units from 1,799 units a year earlier, indicating renewed interest in internal combustion engine vehicles—at least in the short term.

Argentina emerges as a major trade partner

Argentina has emerged as Nepal’s third-largest import source in the first five months of the fiscal year, after India and China. Nepal imported goods worth Rs 44.46bn from the South American nation during the period.

The bulk of these imports consisted of crude soybean oil for domestic refineries. 

Argentina has emerged as Nepal’s important trade partner in recent years. In 2024/25, Nepal imported Rs 99.3bn worth of goods from Argentina—nearly eight times higher than the Rs 12.38bn recorded in 2023/24.

Crude soybean oil alone accounted for Rs 88.91bn, or nearly 90 percent of imports from Argentina during the year, followed by crude sunflower oil worth Rs 8.89bn.

The price of gold has increased by Rs 1, 200 per tola in the domestic market on Friday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 269, 300 per tola today. It was traded at Rs 268, 100 per tola on Thursday.

Similarly, the price of silver has increased by Rs 1, 835 and is being traded at Rs 4, 585 per tola today.

The incumbent government has been effortful in creating an atmosphere for elections.

In a bid to enhance the environment for upcoming March 5 elections to the House of Representatives (HoR), the government has started consulting with top leaders of three key political parties, Nepali Congress, CPN-UML and Nepali Communist Party.

In this connection, Minister for Communication and Information Technology Jagadish Kharel is now holding a discussion with Nepali Congress President Sher Bahadur Deuba at the latter's residence, Maharajgunj.

According to the Minister Kharel's secretariat, he is scheduled to have separate discussions with CPN-UML Chair KP Sharma Oli and Nepali Communist Party (NCP) Chair Pushpa Kamal Dahal today itself.

The second Ichchhakamana Orange Festival and Food Festival is beginning from today.

The festival is being organized jointly by the Chitwan Industry Association Ichchhakamana Committee and the Hotel Entrepreneurs Association Ichchhakamana Unit in Muglin Bazaar.

Ramhari Kandel, President of the Chitwan Industry Association Ichchhakamana Committee, stated that the festival is organized to attract both domestic and international tourists.

He added that there will be more than 50 stalls in the exhibition. As many as 100 farmers producing oranges in Ichchhakamana will directly benefit from the festival.

According to the organizers, the festival will contribute to the preservation and promotion of local arts, culture and traditions.

The festival will include various programs, such as interactions between expert farmers and people's representatives, and orange-eating competitions. Chairperson Kandel said that the festival in Muglin Bazaar is expected to help promote local products. 

Chair of Ichchhakamana Rural Municipality, Danbahadur Gurung said that farmers in the area are annually making transactions of Rs 9 million to 10 million from orange production.

With an 80.4 score, the United States tops the Asia Power Index, which is driven by unmatched military reach, alliance networks with Japan, South Korea, Australia and the Philippines, and dominant financial and technological influence. Despite domestic polarization, it remains Asia’s primary security guarantor and key player in trade, AI, and semiconductor supply chains.

According to the Lowy Institute Asia Power Index Nepal ranks 25 among the 27 countries of Asia, with an overall score of 5.0 out of 100. The report says that Nepal is a minor power in Asia. Nepal’s scores rose slightly by 0.2 points to five in 2025.

Nepal’s strongest measure is cultural influence, where it places 21st. Its weakest measure is diplomatic influence, where it dropped one place to second-last. Nepal exerts less influence in the region than expected given its available resources, as indicated by the country’s negative power gap score, which increased since 2024, the report says.

China scores 73.7, reflecting vast economic weight, world‑leading manufacturing, and rapid naval and air‑power expansion. Its Belt and Road Initiative, trade ties, and assertive posture in the South China Sea and Taiwan Strait underpin influence, though slowing growth and pushback from neighbours and the US temper its rise.

China, the only peer competitor to the United States in what remains a bipolar distribution of power in Asia, appears well prepared and confident in its responses to US economic coercive policies, retaliating with its own tariffs and export controls. Beijing has also successfully positioned itself to regional countries as a reliable partner opposing protectionism and unilateralism, benefiting from uncertainty about the Trump administration’s approach to Asia.

Russia’s power in Asia is resurging, aided by support from other authoritarian revisionist powers, in particular China and North Korea. The closer collaboration between these countries—on full display during China’s 2025 Victory Day Parade—will continue to challenge the United States and its allies.

 Caught between the two superpowers, and anxious about rising tensions and protectionism, Southeast Asian countries are trying to assert their own influence. Under Prime Minister Anwar Ibrahim, Malaysia has cut a more prominent profile internationally, even before it assumed the rotating chairmanship of the Association of Southeast Asian Nations (ASEAN) in 2025. Other Southeast Asian middle powers have been less well able to project influence: Thailand has been preoccupied with its border conflict with Cambodia. And while Indonesia’s new president, Prabowo Subianto, is more interested in diplomacy than his predecessor, his efforts have been focused globally rather than regionally.

India’s 40.0 score makes it the third most powerful country in Asia and the only “major power” category state. Strong economic growth, a huge population, an expanding blue‑water navy, and a central role in the Quad and Indian Ocean security lift its clout, even as infrastructure gaps and internal inequalities remain constraints.

National cricket player Manish Thapa died in a motorcycle accident in Biratnagar on Thursday.

According to police, Thapa is a permanent resident of Biratnagar Metropolitan City-5.

Morang Police Chief Kabit Katuwal, Thapa was heading towards Ganesh Chowk from Airport Line via Biratnagar-4-based inner road when the incident occurred at around 1 am today.

He was riding the bike with registration number Pradesh 1-02-042 Pa 8002.

Critically injured in the incident, Thapa was rushed to the Koshi Hospital but doctors pronounced him dead on arrival.

National cricket player Thapa had been playing for over nine years, representing Koshi Province.

Police said that the body has been kept at the Koshi Hospital for postmortem, police said.

Prime Minister Sushila Karki, and top guns of three major political parties jointly called on President Ram Chandra Paudel today.

PM Karki, Nepali Congress President Sher Bahadur Deuba, CPN-UML Chairman KP Sharma Oli and Nepali Communist Party Coordinator Pushpa Kamal Dahal are holding the meeting with the Head of the State, according to the President's secretariat.

It is the first time that the top leaders and PM Karki held a joint meeting with the President after the September 8-9 Gen Z movement.

They are discussing the current political situation including the March 5 election.

All schools in Gaur Municipality in Rautahat district have been closed until Friday citing biting cold in the district in the past few days.

Issuing a notice on Monday, the Gaur Municipality announced a holiday in all community and institutional schools until December 26.

Chief Administrative Officer of Gaur Municipality Subas Kumar Thakur said that a decision to give a holiday in the schools was made, as the regular classes were affected due to excessive cold and considering the fact that the cold could impact the school children's health. The holiday will be adjusted with the summer break, it is said. 

Normal life in the district was affected due to a severe cold since the second week of December.