Exports to India Surge as Nepal’s Major Commodities Rebound – NRB Report

Nepal’s exports to India have surged sharply in the early months of FY 2025/26, signaling a strong rebound in trade performance and industrial activity. According to the latest Nepal Rastra Bank (NRB) Mid-September 2025/26 report, exports to India soared by 139.9%, reaching Rs. 38.35 billion in just two months compared to Rs. 15.99 billion during the same period last year.

Soybean Oil Dominates Export Growth

The single biggest driver of Nepal’s export boom continues to be soybean oil, which alone accounted for Rs. 20.42 billion, representing more than half (53%) of total exports to India. The strong demand from Indian refiners, coupled with Nepal’s competitive processing capacity and favorable tariff structure, has kept soybean oil at the forefront of the country’s trade expansion for a second consecutive year.

Palm Oil, Jute Goods, and Niche Exports Surge

Besides soybean oil, several other commodities showed remarkable growth —

• Palm Oil exports skyrocketed by 318.4% to Rs. 1.36 billion, driven by higher re-export demand and improved refinery output.

• Jute Goods grew 61.1% to Rs. 1.61 billion, supported by eco-friendly packaging demand. Within this, Hessian jute goods rose 43.3%, and Sacking jute goods surged 105.8%.

• Cardamom (+43.9%), Noodles (+54.8%), and Ayurvedic Medicines (+30.5%) also recorded healthy gains.

Overall, Nepal’s major commodity exports to India reached Rs. 32.55 billion, marking a 153.5% year-on-year risein the first two months of the fiscal year. This reflects a broad-based recovery in Nepal’s industrial and processed goods exports.

Traditional Sectors Struggle

Despite the strong overall performance, traditional exports continued to face headwinds.

• Tea exports dropped 37.4%, while Zinc sheets plunged 77.6% due to reduced industrial demand.

• Ginger (-36.8%), Copper Wire Rod (-35.1%), and G.I. Pipes (-34.7%) also recorded declines.

• Small-scale manufacturing goods like Plastic Utensils (-21.5%) and Cinnamon (-48.5%) saw lower exports, reflecting weak competitiveness in Indian markets.

Macro Stability Supports Trade

The strong export momentum has been underpinned by Nepal’s stable macroeconomic environment.

• Foreign exchange reserves climbed to Rs. 2.88 trillion (USD 20.41 billion).

• Remittance inflows rose by 33% to Rs. 352 billion.

• Inflation eased to 1.87%, and the Balance of Payments (BOP) remained in surplus by Rs. 153.7 billion.

These indicators suggest that Nepal’s external sector is on a solid footing, aided by improved liquidity, controlled inflation, and stronger industrial production.

Outlook: Need for Export Diversification

While the rebound in exports to India is impressive, economists caution that Nepal’s trade base remains highly concentrated in re-exported edible oils. The sustainability of this growth will depend on diversifying exports, investing in manufacturing value chains, and expanding market access for domestic agricultural and industrial products.