Nepal's Export to China Grows by 3%, Driven by Woolen Carpets and Agarbatti, Despite Noodle Collapse

Kathmandu, July 9 — Nepal's exports to China have recorded a modest growth of 3% in the first eleven months of the fiscal year 2024/25, reaching Rs. 2.48 billion, up from Rs. 2.41 billion in the same period last year. The surge was primarily supported by a significant rise in the export of woolen carpets, pashmina, and agarbatti, although a sharp decline in noodle exports pulled down the overall momentum.

Major Commodities See 11.2% Growth

Exports under the "Major Commodities" category rose by 11.2%, totaling Rs. 1.19 billion. Among them, woolen carpets became the top export item, skyrocketing to Rs. 706.3 million, marking a massive 84.4% increase from the previous year's eleven-month figure. Similarly, pashmina exports surged by 44.8%, reaching Rs. 48.8 million, and agarbatti exports rose by 21% to Rs. 23 million.

Handicrafts Decline, Noodles Plunge

Despite the positive trend in some sectors, handicraft (metal and wooden) exports dropped by 21.4% to Rs. 200.9 million, a reversal after a strong previous year. The most concerning figure was seen in noodle exports, which collapsed by 85%, falling to just Rs. 22.5 million, compared to Rs. 149.8 million last year.

Mixed Performance in Other Products

Exports of readymade garments continued to slide, falling by 5.9% to Rs. 140.5 million. Rudrakshya also declined by 26.3%, and readymade leather goods dropped drastically by 89.5%, signaling limited demand or supply-side issues. On a positive note, tea exports grew significantly from Rs. 0.9 million to Rs. 7 million, indicating renewed traction in the Chinese market.

"Others" Category Contracts

Contrary to the growth in major commodities, the “Others” category witnessed a 3.7% decline, dropping to Rs. 1.28 billion from Rs. 1.33 billion. This contraction trimmed the overall export growth, which could have been stronger without this drop.

Annual Outlook and Trade Diversification Needed

Despite a relatively subdued annual growth rate of 3%, the diversification of export products and the success of items like woolen carpets and pashmina reflect promising trends. However, the sharp fall in key categories like noodles, handicrafts, and leather goods highlights the urgent need for strategic product and market development to sustain trade momentum with China.