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As of October in the current fiscal year 2024/25, Nepal’s trade deficit has decreased by 3.96 percent compared to the previous year. In the last fiscal year, Nepal faced a trade deficit of Rs 366.8bn, while in the first three months of this fiscal year, the deficit stands at Rs 352.3bn, indicating some improvement.

Nepal’s economy has long relied heavily on imports, with exports constituting only about 10 percent of total imports. For every Rs 100,000 of imports, only Rs 10,000 worth of exports occur, leading to a persistent trade deficit. In the first three months of the current fiscal year, both imports and exports have decreased.

The country continues to face trade deficits year after year due to its inability to increase domestic production. The trade deficit remains substantial because exports cannot keep pace with imports. However, a slight reduction in imports has recently contributed to a minor decrease in the deficit, though the change is not significant. Business owners report that the production capacity of domestic industries is steadily declining.

Petroleum products, machinery, electrical equipment, vehicles and parts, plastic goods, fertilizers, pharmaceuticals, vegetables, textiles, and food items make up the largest share of imports, significantly widening the trade deficit. Nevertheless, imports have contracted compared to the same period last fiscal year.

According to foreign trade statistics released by the Customs Department on Wednesday, approximately Rs 47.75bn worth of goods were imported in October last year. In the first three months of fiscal year 2024/25, imports have decreased by 4.17 percent. Goods and services imports have led to an outflow of foreign currency equivalent to Rs 390.75bn, with petroleum products alone accounting for Rs 66.9bn, the largest share. Iron and steel follow, with an import value of Rs 33.11bn.

Since the Covid-19 pandemic, the production capacity of domestic industries has declined, which has also hindered exports. Compared to last fiscal year, exports have decreased by 6.11 percent at the start of October. Last year, exports totaled Rs 40.8bn in the first three months, while this year, they have fallen to Rs 38.3bn. The main export items include tea, coffee, spices, carpets, rugs, and handicrafts.

While imports amount to Rs 39bn, exports total just Rs 38bn, and petroleum products alone account for Rs 66.9bn in imports. Approximately 60 percent to 65 percent of all goods and services imported into Nepal come from India. Currently, Nepal imports essential goods and services from 132 different countries.

The production of export goods in Nepal has helped increase export volumes and earn foreign currency. In the first three months of this fiscal year, exports of tea, coffee, and spices reached Rs 3.4bn. The second-largest export is human-made staple fiber, valued at Rs 3.2bn, while carpets and other textile floor coverings are the third-largest, at Rs 377m. Other exports are valued at less than Rs 3bn.

In the first three months of the fiscal year, goods and services worth Rs 2.4bn were imported from India, accounting for 62 percent of total imports. Imports from China totaled Rs 78.6bn, while imports from Ukraine, Australia, and Argentina were Rs 6.5bn, Rs 5.6bn, and Rs 4.9bn, respectively.

Nepal imports basic goods and services from 132 countries while exporting to around 100 countries. India remains Nepal's top export market, with exports totaling Rs 24.8bn as of October. The United States is the second-largest export destination, accounting for Rs 4.7bn in the first three months. Exports to Germany, the UK, and Japan totaled Rs 1.23bn, Rs 13m, and Rs 59.9m, respectively.

The gold is being traded at Rs 166, 000 per tola in the domestic market on Friday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of silver has dropped by Rs 25 and is being traded at Rs 2,070 per tola today. 

The Nepal Stock Exchange (NEPSE) plunged by 18. 25 points to close at 2,627.14 points on Thursday.

Similarly, the sensitive index dropped by 2. 99 points to close at 474. 26 points.

A total of 12,283,623-unit shares of 317 companies were traded for Rs 5. 41 billion.

Meanwhile, Nepal SBI Bank Limited (SBI) was the top gainer today with its price surging by 9. 75 percent. Likewise, Rawa Energy Development Limited (RAWA) was the top loser with its price dropped by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 4. 17 trillion.

The Kaligandaki Corridor (Beni-Jomsom-Korala) road project, a vital part of Nepal’s national pride infrastructure, has made significant strides with 80 percent of the physical work completed, according to the latest project report. Financial progress stands at 75 percent. The project, initiated on 27 Nov 2016, aims to establish an all-weather road network connecting southern Nepal to the Korala border with China in the north.

A total of Rs 10bn was allocated for the construction and upgrading of 202 kilometers of road and bridges stretching from Maldhunga in Parbat to Koralanaka in Mustang. As of the last fiscal year, Rs 7bn has been contracted for the project. Initially projected for completion by the fiscal year 2022/23, the deadline has been extended to 2025/26 due to challenges such as natural disasters and construction delays.

Out of the 202 kilometers, 150 kilometers of road are under the contract management project. So far, 45.71 percent of the planned blacktopping is completed, with 48 kilometers finished. Additionally, 77 kilometers of gravel road have been completed, though the 25-kilometer Charang-Chooser stretch remains unfinished due to slow contractor performance and adverse weather.

Dhurba Jha, head of the Korala Road project, reported that of the 24 bridges needed along the route, 19 have been contracted, with 11 bridges already completed. The project has faced delays in bridge construction, with four contracts broken, but efforts are underway to enter new contracts for the remaining bridges.

Despite setbacks, the project has maintained momentum. Jha mentioned that five of the eight contracts from Maldhunga to Kagbeni are under construction, while some bridges have already been completed. The Korala road, once fully operational, is expected to boost trade and connectivity between Nepal and China, strengthening Nepal’s northern trade corridor.