RMG sector dooms as trade deficit widens uncontrollably

27 May '08

2 min read

Trade situation of Nepal has been on a rapid decline for nearly a decade now and reason for this is none other than widening trade deficit which has virtually collapsed some of the thriving sectors of the economy.

Although Government is heading for a structural revision, formulating strategic as well as pragmatic, liberalized and market-oriented trade and industrial policy, more is required in terms of practical measure. There is a dire need of reinforcing exports of both traditional and non-traditional products to some of the new markets for balancing trade inequality.

It is extremely unpleasant for a country to be in such a plight where its imports outweigh exports by nearly three times. Nepal is facing a huge trade gap to the tune of Rs138 billion, with export at Rs59.07 billion and imports at Rs197.67 billion in fiscal year 2006-07.

Production, infrastructure and marketing are some of the key areas which need to be given attention for strengthening the supply side of exportable products. One of the biggest trading partners of Nepal is India, with whom the country has an intensifying trade deficit which stood at Rs75.86 billion in 2006-07.

While exports from Nepal amounted to Rs41.87 billion, imports from India blew up to Rs117.74 billion. Besides, in the last eight months of the current fiscal year, exports to India further dropped by 7 percent to reach Rs26 billion whereas imports surged further to touch Rs12.5 percent to touch Rs150 billion.

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