Terms of Trade Nepal 2026: Eight-Month Analysis
Nepal's terms of trade (ToT) — the ratio of export prices to import prices — provides insight into whether the country is getting a better or worse deal in international trade. NRB data for 8M 2025/26 shows a nearly flat ToT with slight improvement.
Terms of Trade Data (Base: FY 2022/23 = 100)
| Month | Export Price Index | Import Price Index | Implied ToT |
|---|---|---|---|
| Aug 2025 | 102.10 | 96.43 | 105.88 |
| Sep | 102.60 | 96.63 | 106.18 |
| Oct | 103.01 | 96.79 | 106.42 |
| Nov | 102.48 | 96.66 | 106.02 |
| Dec | 104.08 | 96.67 | 107.67 |
| Jan 2026 | 104.88 | 97.08 | 108.03 |
| Feb | 105.33 | 97.17 | 108.40 |
| Mar | 105.75 | 98.88 | 106.95 |
| 8M Avg 2025/26 | 103.78 | 97.04 | 106.94 |
| Annual Avg 2024/25 | 103.86 | 95.88 | 108.32 |
What Does This Mean?
ToT above 100 means Nepal's export prices are higher relative to import prices compared to the base year — a favorable position. The 8M average of ~106.94 indicates Nepal's trade terms are roughly 7% more favorable than in FY 2022/23.
Key Trends
- Export prices rising: From 102.10 (Aug) to 105.75 (Mar) — a 3.57% increase over 8 months, driven by higher soyabean oil and cardamom prices
- Import prices also rising but slower: From 96.43 to 98.88 — a 2.54% increase, partly from exchange rate depreciation making imports costlier
- ToT slightly deteriorating from 2024/25: The annual average fell from 108.32 to ~106.94 — meaning the favorable gap is narrowing
Conclusion
Nepal's terms of trade remain favorable (above 100) but are gradually deteriorating as import prices catch up with export price gains. The March 2026 import price jump (98.88) — likely reflecting currency depreciation — is a warning sign.