Nepal is a heavily import-dependent country with the share of imports compared to export has been growing over the years. Nepal has been importing consumer, capital, and intermediary goods from abroad.
The import of capital goods such as machinery, vehicles, iron, and steel among others are considered vital to the economy as such goods are used to increase production. But declining imports of capital goods means there will be little capital formation in the current fiscal year. According to the TEPC, the import of machinery slumped by 33 percent; iron and steel by 17 percent, and transport vehicles by 63.4 percent. While import restrictions imposed till December last year greatly contributed to a decrease in overall imports, there has not been a recovery in imports even after the import restriction measures were lifted. In December last year, the government lifted the ban on the import of vehicles, alcohol, and expensive mobile sets, and subsequently, Nepal Rastra Bank also removed the provisions that the importers need to deposit a cash margin of up to 100 percent to open a letter of credit. As of the first nine months of the current fiscal year, Nepal’s overall imports declined by 18.1 percent, according to the TEPC. Though the decrease in imports helped to increase the foreign exchange reserves, it also badly affected the government’s revenue. The federal government’s half of the total revenue depends on imports. Amid reduced revenue collection, the government has been forced to cut spending on development projects and has also been struggling to distribute salaries and pensions to government employees and retired employees on a timely basis. Economists say Nepal's economy is currently in dire need of structural reforms. "Nepal could turn the current crisis into an opportunity for becoming a self-reliant economy with the right policies and actions in place," said Keshav Acharya. According to him, there are lessons to be learned from past mistakes in this regard. "In 2049 BS, the government introduced policies for the country's economic liberalization. The move aimed at creating an export-oriented economy. Ironically, imports began to replace domestic products in the years that followed," he said, adding, "It is because foreign goods became cheaper than domestic products." Acharya observes that the government is losing an opportunity for structural reform of the economy as its focus is on raising revenue by increasing imports. "Over the past year, the restrictive measures of the central bank have helped to boost our foreign exchange reserve and maintain a good balance of payment. In this situation, the government should launch a campaign to increase production. Ironically, the political leadership lacks such a vision," he said. He cited the example of the government scrapping the land use policy. "The strict implementation of the policy could have resulted in increased agriculture and industrial productivity as the land prices would have come down after the categorization," he mentioned. Acharya thinks that provincial and local governments should be given more authority and encouraged to increase production. Major Imports Items
| Items | % Change |
| Petroleum Products | 5.8 |
| Iron & Steel | -17.0 |
| Machinery | -33.0 |
| Electronic & Electrical Equipments | -11.0 |
| Cereals | -29.4 |
| Gold | 11.0 |
| Transport Vehicles | -63.4 |
| Pharmaceutical products | -40.5 |
| Fertilizers | 118.8 |
| Crude soyabean oil | -34.2 |
| Telecom Equipment | -39.0 |
| Crude palm Oil | -31.2 |
| Apparel and clothing | -28.1 |
| Polythene Granules | -18.1 |
| Man-made staple fibers | -5.4 |
| Chemicals | -9.7 |
| Crude sunflower oil | -19.4 |
| Aluminum and articles | -5.1 |
| Rubber and articles | -29.6 |
| Low erucic acid rape | -25.5 |
| Cotton ( Yarn and Fabrics) | -16.6 |
| Copper and articles | -25.9 |
| Aircraft and parts | -21.7 |
| Zinc and articles | -4.9 |
| Wool | -9.0 |
| Silver | -89.2 |
| Others | -14.4 |
| Total | -18.1 |
