By DIPESH TOP 10 RESEARCH TOP 10 RESEARCH
Nepal’s Custom-Wise Trade in 2024/25: A Tale of Export Surge and Steady Import Growth
Nepal’s foreign trade landscape for the first eight months of the fiscal year 2024/25 (mid-July 2024 to mid-March 2025) reveals a robust performance in exports, coupled with a more modest increase in imports, according to the latest customs data. Total exports surged by 57.2% to Rs. 158,172.4 million, while imports grew by 11.2% to Rs. 1,145,566.2 million compared to the same period in 2023/24. This article provides a detailed analysis of the custom-wise foreign trade data, highlighting key trends, regional disparities, and the broader economic implications for Nepal.
Overall Trade Performance
The first eight months of 2024/25 saw Nepal’s total exports climb to Rs. 158,172.4 million, a significant 57.2% increase from Rs. 100,617.4 million in 2023/24. Imports, while also rising, grew at a slower pace of 11.2%, reaching Rs. 1,145,566.2 million from Rs. 1,030,222.7 million. This disparity has narrowed Nepal’s trade deficit, a positive sign for the economy, which has historically struggled with a heavy reliance on imports. The data, based on customs records, reflects trade activities across 14 major customs points, with varying performances that underscore regional economic dynamics.
Export Highlights: Birgunj Leads with Remarkable Growth
Among the customs points, Birgunj Customs Office recorded the most dramatic export growth, with a 172.0% increase, rising from Rs. 19,580.2 million in 2023/24 to Rs. 53,259.0 million in 2024/25. This surge highlights Birgunj’s strategic importance as a trade hub, particularly for goods destined for India, Nepal’s largest trading partner. The customs point’s proximity to the Indian border and its well-developed infrastructure likely facilitated this growth, possibly driven by increased demand for commodities like soybean oil, polyester yarn, and particle board, which were among the top exports as per earlier data.
Biratnagar Customs Office also showed impressive growth, with exports nearly doubling (95.6%) from Rs. 20,576.1 million to Rs. 40,239.1 million. This increase may be attributed to the region’s industrial base, which supports the production of goods like textiles and processed agricultural products. Similarly, Kailali Customs Office saw a 52.8% rise in exports, reaching Rs. 656.2 million, reflecting growing trade activity in the far-western region.
However, not all customs points experienced growth. Jaleshwor Customs Office saw a steep 53.5% decline in exports, dropping from Rs. 3,230.1 million to Rs. 1,502.4 million, and Kanchanpur Customs Office recorded a 65.6% decrease, falling from Rs. 14.0 million to Rs. 4.8 million. These declines may be linked to logistical challenges, reduced demand for specific goods, or disruptions caused by natural disasters, such as the floods and landslides that impacted Nepal in 2024, causing damages equivalent to 0.8% of GDP according to the World Bank.
Import Trends: Rasuwa Sees Sharp Increase
On the import side, Rasuwa Customs Office recorded the highest growth at 54.6%, with imports rising from Rs. 35,002.7 million to Rs. 54,110.2 million. This significant increase is likely driven by Nepal’s growing trade with China, as Rasuwa serves as a key entry point for Chinese goods. The import of electric vehicles, which increased by 19.6% in the same period (with 6,883 units coming from China), may have contributed to this growth, reflecting Nepal’s push toward sustainable transportation.
Tatopani Customs Office also saw a notable 28.8% increase in imports, reaching Rs. 29,803.7 million from Rs. 23,148.3 million, further underscoring the importance of the China-Nepal trade corridor. However, Tatopani recorded zero exports in 2024/25, down from Rs. 5.1 million, possibly due to logistical constraints or border issues.
Biratnagar and Jaleshwor Customs Offices reported import growth of 17.2% and 17.0%, respectively, indicating steady demand for goods in these regions. In contrast, Tribhuwan Airport Customs Office, a major hub for high-value imports, saw a modest 3.4% increase, rising from Rs. 91,940.9 million to Rs. 95,027.0 million. This slower growth may be linked to disruptions caused by the ongoing upgrade of Tribhuvan International Airport, which began in November 2024, leading to reduced operating hours and increased costs.
Regional Disparities and Economic Implications
The custom-wise data reveals stark regional disparities in trade performance. Customs points like Birgunj, Biratnagar, and Bhairahawa (which saw a 31.2% export increase to Rs. 119,284.8 million) are driving Nepal’s export growth, benefiting from their proximity to India and established trade infrastructure. These regions are likely capitalizing on the global demand for Nepal’s top exports, such as soybean oil, tea, and textiles, as seen in earlier commodity data.
Conversely, smaller customs points like Kanchanpur and Jaleshwor are struggling, possibly due to limited infrastructure, lower industrial activity, or disruptions from natural disasters. The World Bank’s recent Nepal Development Update noted that floods and landslides in 2024 severely impacted infrastructure and agriculture, which may have disproportionately affected smaller trade hubs.
The 11.2% growth in imports, while moderate, reflects Nepal’s continued dependence on foreign goods, particularly for consumer products, machinery, and now electric vehicles. The significant import growth at Rasuwa and Tatopani highlights the deepening trade relationship with China, which could diversify Nepal’s import sources but also raises concerns about trade imbalances, as exports to China remain minimal.
Broader Economic Context
Nepal’s export surge aligns with the World Bank’s projection of a 4.5% economic growth for 2024/25, up from 3.9% in the previous fiscal year. The growth in agricultural and industrial sectors, as noted by the World Bank, likely contributed to the export boom, particularly for commodities like tea and polyester yarn. However, the disruptions at Tribhuvan International Airport, which impacted tourism—a key economic driver—may have offset some of these gains by increasing costs for air freight and reducing tourist-related trade.
The import of electric vehicles, up 19.6% with 8,775 four-wheelers imported, signals a shift toward sustainable transport, supported by government policies and lower global prices. However, this also increases Nepal’s import bill, as most of these vehicles are sourced from China and India, further widening the trade deficit in this category.
The 57.2% export growth is a promising sign for Nepal, indicating improved competitiveness in international markets, particularly with India. However, the heavy reliance on a few customs points like Birgunj and Bhairahawa suggests a need for more balanced regional development. Investing in infrastructure at smaller customs points, such as Kanchanpur and Jaleshwor, could help distribute trade benefits more evenly and reduce vulnerability to localized disruptions.
The steady 11.2% import growth, while manageable, underscores Nepal’s challenge in reducing its trade deficit. The focus on electric vehicle imports is a step toward sustainability, but it also highlights the need for domestic production to reduce reliance on foreign goods. The significant import growth at Rasuwa and Tatopani points to an opportunity to strengthen trade ties with China, but Nepal must also boost its exports to this market to achieve a more balanced trade relationship.
In conclusion, Nepal’s custom-wise trade data for 2024/25 paints a picture of resilience and opportunity, tempered by regional disparities and structural challenges. As the country navigates natural disasters, infrastructure upgrades, and global trade dynamics, strategic investments in trade infrastructure, export diversification, and regional development will be crucial to sustaining this growth momentum and achieving a more balanced trade profile.
