Nepal-China Trade Gap Widens: Imports Up 14.1% as Exports Fall 65%

Nepal’s trade with China in FY 2025/26 shows a worsening imbalance, with imports rising sharply while exports collapsed. Imports from China grew by 14.1 percent, reaching Rs. 279.96 billion, up from Rs. 245.42 billion in the previous year. This growth reflects Nepal’s rising dependency on Chinese industrial inputs, consumer electronics, and machinery, all of which remain central to the domestic supply chain.

On the other hand, exports to China fell drastically by 65.2 percent, dropping to only Rs. 54.8 million from Rs. 157.6 million a year earlier. This plunge highlights Nepal’s persistent struggle to access the Chinese market, hindered by non-tariff barriers, logistical challenges, and limited competitiveness of Nepali goods. As a result, Nepal’s trade deficit with China widened by 14.6 percent, underscoring structural weaknesses in bilateral trade relations.

Despite China accounting for nearly 20 percent of Nepal’s total imports, its contribution to Nepal’s exports has shrunk to just 0.2 percent, making it one of the most lopsided trade partnerships. This dependency on imports without meaningful export growth poses risks to Nepal’s balance of payments and long-term economic stability.