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Nepal’s external trade is expanding at a healthy pace. The country’s total foreign trade expanded by 13.55 percent to reach Rs 1,480.36bn over the first eight months of the current fiscal year. Figures released by the Department of Customs (DoC) show imports are rising strongly and exports are growing faster in percentage terms. However, the overall gap between the two remains stubbornly wide.

In the eight months of fiscal year 2025/26, trade deficit widened by 11.22 percent to Rs 1,098bn, up from Rs 987.39bn in the same period last year. Total imports surged by 12.54 percent to Rs 1,289.25bn, while exports by a notable 20.83 percent to Rs 191.11bn. On the surface, this suggests a positive shift—exports are growing faster than imports. But the reality is more complex.

Nepal’s external trade is overwhelmingly tilted toward imports. Even after healthy exports growth in the review period, imports account for 87.09 percent of total trade, while exports make up just 12.91 percent. Over the past decade, imports have nearly doubled, rising from Rs 984bn in fiscal year 2016/17 to Rs 1,804.12bn in the previous fiscal year. The trade deficit during the period remained at Rs 1527.09bn. Nepal imports fuel, vehicles, machinery, and a wide range of consumer goods, including food products, while exporting relatively little in comparison. This trend paints a picture of an economy driven largely by consumption rather than production. 

A persistent trade deficit puts continuous pressure on foreign currency reserves. The country relies heavily on remittances sent by workers abroad to finance its import bill. When remittance inflows weaken or external conditions shift, such as rising global fuel prices or slowing demand, this model becomes vulnerable.

In 2022, Nepal faced a sharp decline in foreign exchange reserves, which fell by more than 16 percent within seven months. To arrest the slide, the government imposed restrictions on the import of non-essential goods such as cars, cosmetics, and gold to prevent a balance of payments crisis. While those measures provided temporary relief, they did not address the structural roots of the problem.

Nepal is highly dependent on imports, and the gap between what it buys and sells abroad is still vast. The modest rise in share of exports in total foreign trade indicates that exports are either growing faster than imports or that import growth is beginning to slow slightly. However, the improvement is too small to significantly alter the macroeconomic picture. Also, a bulk of export receipts come from the export of processed edible oils like soybean and sunflower to neighboring India. Nepali importers import crude edible oil from countries as far as Argentina and export it to India after some value addition. If India increases crude import quota for its refineries, Nepal will lose a significant volume of its exports.   

One of the major factors behind rising imports and widening trade deficit is Nepal’s weak domestic production base. Limited industrial capacity, high production costs, and low competitiveness have for long affected Nepal’s ability to produce goods for both domestic consumption and export. As a result, the country remains reliant on foreign products even for basic needs. Despite being an agricultural nation, Nepal imports a significant volume of farm products, especially from India. The country imported paddy and rice worth Rs 27.95bn in the first eight months of fiscal year 2025/26. Potato imports also rose to reach Rs 5.73bn during the period.

Experts say traditional export sectors such as carpets, garments, and certain agro-products can perform better. However, this will be only possible if there is policy support aimed at boosting production, diversifying exports, and improving competitiveness. The political leadership should realize that encouraging industrial growth, investing in export-oriented sectors, and reducing reliance on imports are no longer optional—they are essential for long-term stability.

The Nepal Stock Exchange (NEPSE) surged by 19. 70 points to close at 2, 851. 09 points on Tuesday. 

Similarly, the sensitive index dropped by 3. 26 points to close at 484. 84 points.

A total of 27,942,779-unit shares of 339 companies were traded for Rs 1. 63 billion.

Meanwhile, Reliance Spinning Mills Limited (RSML), Bhujung Hydropower Limited (BJHL), Super Khudi Hydropower Limited (SKHL), Ridge Line Energy Limited (RLEL) and Hotel Forest Inn Limited (HFIN) were the top gainers today with its price surging by 10. 00 percent.

Similarly, Saptakoshi Development Bank Ltd (SAPDBL) was the top loser as its price fell by 8. 96 points. 

At the end of the day, the total market capitalization stood at Rs 4. 84 trillion.

The National Planning Commission (NPC) and the government ministries are engaged in preliminary discussions about the upcoming budget, focusing on ensuring sufficient budget allocation for the completion of underway projects as soon as possible.

Similarly, the discussions focused on proposing new plans and programs that have already undergone prior preparation, including cost–benefit analysis, and are ready for prompt implementation.

The Commission has prepared a checklist aimed at making the budget formulation process for the upcoming fiscal year 2083–84 BS (2026–27) more disciplined, results-oriented, and realistic.

The Commission is discussing with the Office of the Prime Minister and Council of Ministers, and the Ministries of Federal Affairs and General Administration; Culture, Tourism and Civil Aviation; and Health and Population today, according to Commission Assistant Spokesperson Dr Diwakar Luintel.

On Wednesday, discussions will be held with the Ministries of Forests and Environment; Labour, Employment and Social Security; Physical Infrastructure and Transport; and Urban Development.

Similarly, the current status of national pride projects and major programs included in the project bank should be clearly mentioned. It is expected that it would facilitate in progress evaluation of projects of long-term importance. 

The government has also emphasized on aligning the budget with the 16th plan. As per this, the ministries have to clearly propose transformational strategies and key programs and projects to be implemented in the coming fiscal year.

The ministries would have to submit proposals with realistic projections of resources and expenditure as per the budget ceiling and medium-term expenditure structure for next three years (2083/84-2085/86) provided by the Finance Ministry. 

In accordance with Financial Procedures and Financial Responsibility Act, 2076, details like the feasibility study, environmental assessment study, detailed project report, design, cost estimation, land acquisition situation, implementation schedule and purchase plan should be mandatorily included in the proposed plans.  

Similarly, arrangements have been made where expected outcome from the projects should be clearly mentioned. The details of guarantee of resources for national pride projects and multi-year projects should be compulsorily submitted. It is believed that it would increase transparency of budget commitment. 

The government has adopted a policy to give special priority to the projects that will yield quick return, can be completed on slated time and cost and will be completed in the next fiscal year. 

Projects that should be restructured or reviewed along with the details of incomplete and sick projects should be presented separately.  

Likewise, it is mandatory to disclose whether or not the financial liabilities created by previously completed projects are included in the budget.  

Earlier, the Finance Ministry had given March 29 as a deadline to propose plans and programs for the budget of the coming fiscal year, but it has extended the deadline, citing lack of homework.

"We had asked to enter the proposed plans and programs into Line Ministry Budget Information System (LMBIS) by March 29. But, the Finance Ministry will be flexible on it," Joint-Spokesperson of the Commission, Luintel. 

It is necessary to extend the deadline for proposing the plans and programmes into LMBIS in order to incorporate the provisions mentioned in the 100-point reform program, Good Governance Blueprint, 2082, election manifesto of the ruling party in the  budget, added the Finance Ministry.

The price of gold has increased by Rs 6, 700 per tola in the domestic market on Tuesday. 

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 290, 200 per tola today. It was traded at Rs 283, 500 per tola on Monday. 

Similarly, the price of silver has increased by Rs 145 and is being traded at Rs 4, 845 per tola today.