NRB Macroeconomic Update: India Remains Nepal’s Largest Trade Partner with Rs 173 Billion Imports

According to the Nepal Rastra Bank (NRB) Mid-September 2025/26 data (Table 19: Imports of Major Commodities from India), India continues to dominate Nepal’s international trade landscape, supplying a major portion of Nepal’s essential commodities and fuels.

During the first two months of FY 2025/26, Nepal imported goods worth Rs 173.54 billion from India — an 8 percent increase compared to Rs 160.65 billion during the same period of FY 2024/25. India thus remains Nepal’s largest trading partner, accounting for a lion’s share of total imports across sectors such as petroleum, vehicles, rice, chemicals, and machinery.

Key Highlights from NRB Data

• Petroleum Products: Rs 39.23 billion imported (up 2.6%) — the largest single category, representing over one-fifth of total imports from India.

• Vehicles & Spare Parts: Rs 15.14 billion (up 32.9%) — reflecting stronger consumer and industrial demand for transport goods.

• Rice/Paddy: Rs 5.60 billion (up 67.8%) — a sharp increase driven by higher food consumption and lower domestic yields.

• Bitumen: Rs 2.28 billion (up 191.6%) — indicating rapid growth in road and infrastructure development.

• Agri Equipment & Parts: Rs 1.36 billion (up 35.7%) — showing rising agricultural mechanization demand.

Other notable imports included chemicals (Rs 2.07 billion), electrical equipment (Rs 6.13 billion, +13.9%), and cosmetic goods (Rs 0.72 billion). Conversely, imports of chemical fertilizers (–91.7%) and steel sheets (–95.8%)declined significantly, likely due to sufficient stock levels and subdued industrial activity in those categories.

This continued reliance on India reflects both deep trade integration and Nepal’s dependence on Indian goods for energy, transportation, and industrial inputs. Analysts note that while growing imports indicate an improving economy, they also risk widening the bilateral trade deficit, emphasizing the need to boost Nepal’s export competitiveness.