Nepal’s economy in the fiscal year 2024/25 exhibited signs of a guarded but meaningful rebound, marked by notable shifts in trade patterns, rising consumption of key commodities, and strong export performance. While criticisms continue to mount regarding the government’s inability to roll out bold economic initiatives, market behavior and trade data present a story that hints at renewed momentum.
One of the most significant indicators of this evolving economic landscape is the overall expansion of Nepal’s international trade. The total trade volume grew by 19.24 percent compared to the previous year, a strong indicator of increased commercial activity despite political and administrative inertia. Imports during this period reached Rs 1.804trn, a 13.25 percent rise from the previous fiscal year’s figure of Rs 1.592trn. Although a double-digit increase in imports would generally raise alarms in an economy known for chronic trade deficits, this year’s data must be read in the context of a simultaneous and historic rise in exports.
Exports for the fiscal year hit a record Rs 277bn, an impressive 81.8 percent surge from Rs 152bn in 2023/24. This steep rise in export volume represents the strongest performance on record and suggests that Nepal’s export capacity is beginning to respond to global market opportunities, logistical improvements, or perhaps increased value-added activity in key sectors. Interestingly, a substantial portion of this export growth is attributable to processed soybean oil, which Nepalese traders import in crude form from third countries and refine for export, primarily to India. This particular trade mechanism, while increasing both import and export volumes, has had the net effect of raising overall trade engagement and foreign exchange earnings.
Petroleum products continue to play an outsized role in Nepal’s import basket, both as a necessity and a source of government revenue. Total petroleum imports in 2024/25 amounted to Rs 274.27bn. Diesel led the chart with 1.47m kiloliters imported, valued at Rs 128bn, an increase of nearly 55,000 kiloliters from the previous year. Petrol followed closely at 746,420 kiloliters worth Rs 64.12bn, and aviation fuel imports rose to 210,012 kiloliters, valued at Rs 18.79bn. LPG gas consumption, another critical indicator of household energy demand, hit 5.55bn kilograms, translating to an import value of Rs 62.58bn.
What makes these figures particularly noteworthy is the inverse relationship between global petroleum prices and domestic consumption. Despite falling prices on the international market, Nepal’s import volume increased substantially, suggesting robust domestic demand. This reliance, while generating significant revenue of Rs 120.57bn in petroleum-related taxes, also underscores the country’s vulnerability to global price fluctuations and its continued dependence on fossil fuel imports.
The import composition further reveals evolving consumption patterns. While diesel remained dominant, an unusual and noteworthy rise was observed in the import of crude soybean oil, which surpassed petrol in value at Rs 108.95bn. These two commodities were the only ones with imports exceeding Rs 100bn, emphasizing their critical role in the current trade structure. Meanwhile, imports of smartphones, now ranked sixth in value, reflect a growing appetite for tech consumption among Nepali consumers.
Month-wise import trends revealed fluctuating demand, with peak imports recorded in the middle of the fiscal year and a decline toward the end. For instance, imports stood at Rs 170bn in mid-May to mid-June but dropped to Rs 160bn in mid-June to mid-July. Part of this decline is attributed to the closure of the Rasuwa customs point, a vital trade gateway with China, due to flooding.
A similar pattern emerges in the automotive sector, which appears to be undergoing a modest but clear revival. The import of electric passenger vehicles increased by 14 percent, reaching 13,578 units valued at Rs 31.76bn. From this, the government collected Rs 19.7bn in revenue. The commercial EV segment witnessed even stronger growth, rising by 73 percent year-over-year with 3,813 units imported. These developments reflect both shifting consumer preferences and the likely impact of government incentives and global supply trends favoring electric mobility.
In the two-wheeler market, long regarded as a bellwether for middle-class consumption, the story is equally optimistic. Imports of motorbikes and scooters rose by 34 percent, with 201,000 units entering the country. The government earned nearly an equivalent amount of Rs 24.73bn in revenue from these imports alone. The rise in two/three-wheeled electric vehicles was also notable, with 29,437 units imported compared to 20,704 units the year before. Even fuel-based passenger cars showed a rise in demand, with 4,978 units imported in 2024/25, up from 4,246 the previous year.
These numbers offer a nuanced understanding of post-pandemic consumer behavior. Rather than a broad-based economic boom, Nepal appears to be experiencing targeted recoveries in segments such as transportation, technology, and household energy, with more modest gains in other sectors. Interestingly, this uneven recovery seems to be occurring largely independent of proactive government economic management. While critics have accused the administration of failing to implement impactful reforms or development programs, the market appears to be finding its footing nonetheless.
Beyond trade and consumption, the real estate market offers another dimension of economic recovery, particularly in high-value segments. Government data shows a spike in transactions involving premium properties in urban centers. Although the total number of property registrations slightly dipped in Asar compared to Jestha (55,524 compared to. 56,010), revenue collection told a different story. The government collected Rs 6.55bn in property transaction taxes in Asar, up by Rs 1.82bn from the Rs 4.72bn collected in Jestha. Compared to last year’s Asar, which generated only Rs 4.61bn from 46,179 transactions, this year’s data clearly indicates growth in the sale of higher-value properties.
This surge in property deals reflects rising investor confidence, likely driven by factors such as stable remittance inflows, limited alternative investment avenues, and increasing urban migration. It also highlights the potential of the real estate sector to act as a stabilizing force in Nepal’s economy, particularly in the absence of sustained industrial output or manufacturing-led growth.
All this growth occurred in a context where policy intervention was largely missing and government initiatives failed to inspire widespread confidence. The resilience of the market and the adaptability of consumers and businesses, rather than institutional action, have been the primary drivers of this recovery phase.
However, this growth comes with caveats. The rising dependency on petroleum imports, the fragile export base reliant on limited product categories, and infrastructure bottlenecks highlight the structural limitations that remain. To truly achieve sustained economic momentum, Nepal’s policymakers must move beyond passive observation and engage in strategic planning that strengthens domestic production, diversifies the export base, and builds climate-resilient trade infrastructure.
