Nepal’s trade deficit with Bangladesh grows

Friday, July 27th, 2018 | | Money

Nepal has been facing a widening trade deficit with Bangladesh and Bhutan in the last three years. In the past, Nepal used to have a surplus with these countries.

Nepal mostly conducts trade with these Saarc countries via the Eastern border. According to record of Nepal Transit and Warehousing Company Limited (NTWCL), Nepal settled import bills which was nearly three times that of export earnings from Bangladesh in the last fiscal year. In 2017-18, Nepal imported goods worth Rs3.52 billion while it made export earnings of Rs1.91 billion from Bangladesh. “Nepal has been undergoing ever widening trade gap with the country over the last decade,” a NTWCL official said.

Bilateral trading between Nepal and Bangladesh started to take a leap after Kankadbhitta-Phulbari-Banglabandh transit route came into operation August 31, 1997.

Nepal was enjoying trade surplus with Bangladesh till 2013-14, following which Nepal failed to maintain a grip on bilateral trade, which is mainly blamed on the fall in export of lentils in particular.

Earnings from lentils contribute almost half of the total export earnings that the country makes out of trading from Bangladesh. “However, the export of lentils is in free fall in Bangladesh as of late,” said the NTWCL Chief Yadav Shivakoti.

The NTWCL record shows that Nepal exported lentils worth Rs2.71 billion to Bangladesh in 2012-13, which declined to Rs1.96 billion and Rs1.11 billion in the two successive years. In the last fiscal year, Bangladesh imported lentils worth just Rs960 million from Nepal.

Green vegetables, animal feed, herbals and manufactured items from Dabur Nepal are among the exportable goods to Bangladesh. Nepal’s failure in diversifying exportable goods has caused the country to lose out in trade with Bangladesh.

Similarly, Nepal is facing adverse trade balance even with Bhutan. In 2017-18, Nepal’s export earnings from Bhutan stood at Rs52.2 million while the country settled import bills of Rs74.6 million to Bhutan.

Earlier, Nepal’s export to Bhutan used to contain large quantity of electronic items including steel pole, which has come down heavily in the past few years. Packaged food items, laundry soap, readymade garments and footwear are among other export items from Nepal. The country imports fruit juices, iron rods, raw materials of cement and heavy equipment from Bhutan.