Nepal's export to India - the largest trading partner of the country - was down by 5.6%. Likewise, India’s share in Nepal's total exports fell to 68.18% over the first 10 months of 2023/24 compared to 68.18% in the same period of the previous fiscal year.

Nepal's foreign trade over the first 10 months of the fiscal year 2023/24 shrunk by 2.5% compared to the same period of the previous fiscal year. Exports constitute mere 8.8% of the total foreign trade, while imports contribute 91.2%. Statistics of the Department of Customs shows Nepal's total exports decreased by 3.6% to Rs 126.17 billion in the review period. Import also showed a similar trend with a 2.4% decline to Rs 1,303.36 billion. As a result, the export to import ratio reached 1:10.3 in the first 10 months of 2023/24 from 1:10.2 in the first 10 months of the previous fiscal year. Major commodities exported during this period were iron and iron products, yarn, woollen carpets, readymade garments, jute and jute products, cardamom, plywood, woollen felt products, palm oil, tea, dog or cat food food, oilcakes, medicinal herbs, fabrics, noodles, cement, clinker, and copper and copper articles.

According to the Trade and Export Promotion Center, the export of iron and tin products increased by 58.4% during the first 10 months of the current year and reached Rs 14.06 billion. The export of yarn, however, declined by 2.8% to Rs 9.66 billion. The export of woollen carpets als decreased by 6.8%. However, the export of readymade garments and juice increased by 13.9% and 34.7%, respectively, to Rs 7.34 billion and Rs 7.18 billion. The export of jute and jute products, and woollen felts recorded a decline of 7.1% percent and 5.9%, respectively.

The export of agricultural products like cardamom and tea also declined by 5% and 13.3% in the review period, whereas export of ginger went up by 19.1% and reached Rs 1.7 billion in the first 10 months of 2023/24. Nepal's poor export performance has been attributed to the decline in edible oil (palm oil, soybean oil and sunflower oil) exports to India. In the review period, Nepal's export to India - the largest trading partner of the country - was down by 5.6%. Likewise, India’s share in Nepal's total exports fell to 68.18% over the first 10 months of 2023/24 compared to 68.18% in the same period of the previous fiscal year. The United States, Germany, the United Kingdom, China, the United Arab Emirates, France, Australia, Japan, Canada, Italy, Turkey, Denmark and the Netherlands were Nepal’s other top export destinations after India and China.

Import of petroleum products declined by 4.5% over the first 10 months of 2023/24, while import of another major imported commodities, iron and steel, fell by 10% to Rs 123.23 billion. However, import of machinery and parts increased by 3.8% during the review period. Among the major export destinations, Nepal's export to import ratio with India was 1:9.5 during the review period, whereas such ratio with China stood at 1:105.9. According to the macroeconomic situation report of the first 10 months published by Nepal Rastra Bank, the export of raw materials has decreased by 0.6%, while the export of final consumption has shown a decline of 7.2%. This trend depicts the gloomy picture of the national economy with a slowdown in domestic industrial activities and employment opportunities. 

Similarly, imports of raw materials and final consumption materials declined by 10.2% and 6.2%, respectively, which also confirms the slowdown in industrial activities in the country. In the first 10 months of the previous fiscal year, the share of raw materials in Nepal's total import was 53.10% which deteriorated in the first 10 months of the current year and fell to 48.90%. Likewise, the share of imports of final consumption in Nepal's total imports was 38.40% over the first 10 months of the previous fiscal year which increased to 41.80% in the corresponding period of the current fiscal year. These figures also indicate that there has been a slowdown in industrial activities in Nepal and that it will slow down even more in the future.

In the first 10 months of the previous fiscal year, raw materials accounted for 54.90% of Nepal's total exports. The share of raw materials in Nepal's total export reached 56.60% in the same period of the current fiscal year. Similarly, the share of export of final consumption accounted for 44.80% of total exports over the first 10 months of the previous fiscal year which fell to 42.80% in the same period of the current fiscal year. These export figures also indicate that there is a slowdown in industrial activities in the country. To sum up, the decline in the import of raw materials and increase in the import of final consumption goods, and increase in the export of raw materials and decrease in export of final consumption goods paints a gloomy picture of the national economy. The exodus of working force with eventual lack of enthusiasm of the older generation to invest has multifaceted effect on revenue, investment, employment generation and government finances. Such phenomena in Nepal's foreign trade call for a paradigm shift in the country's economic policies, particularly in terms of automating production activities, implementing policies that favour large agricultural firms, lowering tax rates, and introducing liberal provisions in the Industrial Entrepreneurship Act.