The adverse impact of the lockdown imposed by the government since March 24 has started to get reflected in all indicators of Nepal’s foreign trade. The severe disruption in supply chain has adversely affected Nepal’s imports and exports with both of its largest trading partners India and China. Data published by the Department of Customs (DoC) show that Nepal’s total foreign trade has declined sharply in the 10 months of the current fiscal year 2019/20 compared to the same period of the last fiscal year. As of Baisakh (April-May), the foreign trade has declined by 11.89 percent to Rs 1,172 billion from Rs 1,256.67 billion in the corresponding period of FY2018/19.

Official statistics reveal that slump in the country’s imports/exports have further deepened in the April-May compared to previous months. In the review period, foreign trade has decreased to Rs 46 billion which was Rs 62.20 billion in March-April and Rs 130 billion in February-March. In April-May, Nepal’s imports amounted to Rs 42.60 billion and exports totaled Rs 3.24 billion; the figures were Rs 58.29 billion and Rs 3.91 billion in March-April period. Sharp decline in import of petroleum products has contributed to this slump in the country’s foreign trade. Difficulties in transportation along with problems in export and export through customs points are the key reasons for this. For instance, suspension of all international commercial flights, which is in place since March 20 has badly affected Nepal’s exports. Much of the country’s exports are carried out through air cargoes.  

As per DoC data, import of vegetables, petroleum products, iron/steel, boiler machinery and vehicles has declined the most in April-May, while import of rice and medicine/medical equipment has increased during the review period. Last month, Nepal imported rice worth Rs 4.76 billion which was Rs 3.82 billion in March-April. Meanwhile, import of petroleum products has come down to Rs 8.28 billion in April-May which was Rs 9.19 billion a month earlier.

In April-May, Nepal’s imported goods worth Rs 25.04 billion from India while its exports to the southern neighbour amounted to Rs 2.09 billion. Similarly, imports from China totaled Rs 1.98 billion while exports to the northern neighbour were a meagre at Rs 3.7 million.

DoC officials are hopeful foreign trade will improve as barriers seen at customs points have gradually eased. Suman Dahal, director general at DoC said that a high-level Rapid Response Team has been working to resolve the issues. According to him Ministry of Finance has been notified about the problems being faced at customs points and the Ministry of Foreign Affairs has expedited its diplomatic initiations to resolve the issues through bilateral talks with India and China.