KATHMANDU: Nepal’s exports and imports both have fallen sharply due to the ongoing unofficial Indian embargo, Nepal Rastra Bank (NRB) said. The central bank said that exports plunged 25.4 percent to Rs16.81 billion during the first three months of the current fiscal year while merchandise imports also plummeted 31.9 percent to Rs130.49 billion.
Nepal’s total exports fell due to a drop in shipments to India, China and other countries because of the unrest in the southern plains and disruption in transportation. The decrease in the import of petroleum products from India was the biggest contributor to the decline in imports, the central bank said in its latest report on the country’s macro-economic situation.
Export and import trade through all the major customs points like Birgunj, Bhairahawa, Biratnagar, Tribhuvan International Airport, Birgunj dry port, Nepalgunj, Mechi and Tatopani have fallen sharply.
The highest fall in exports and imports were seen at the Birgunj customs point with exports plunging 37.5 percent and imports down 46.2 percent as a result of the Indian blockade. The closure of the Birgunj border point has been more stringent than at other border points.
More than 60 percent of the country’s imports pass through this route. Indian officials have repeatedly stressed that they will not reopen the Birgunj route until the Madhes problem is solved politically.
Trade with India, China and other third countries has decreased drastically, according to the report. Nepal’s exports had long remained sluggish, and imports too dropped recently as a result of the Indian blockade.
NRB officials said that imports decreased from the second month of this year, probably for the first time. Trade through the Tatopani customs point on the northern border has been blocked since the April 25 earthquake due to the damage caused to the infrastructure there. Another customs point on the border with China, Rasuwagadhi, reopened just last month.
According to NRB, Nepal’s exports had suffered during the two previous embargoes too. Exports to India were down 35.9 percent in the first three months of this fiscal year.
Exports to India had decreased by Rs432 million to Rs603 million during the second Indian embargo in fiscal 1988-89 as the southern neighbour had imposed a quantitative restriction on Nepali shipments. During the first Indian embargo in fiscal 1970-71, Nepal’s exports to India had also suffered with a decrease of Rs46.7 million to Rs906 million.
With imports down massively, the country’s soaring trade deficit has shrunk. The total trade deficit during the first three months this year contracted by 32.8 percent year on year to Rs113.68 billion. NRB said that the trade deficit with India, China and other countries had narrowed.