Nepal's foreign trade has witnessed a sharp decline.
Had there been no lockdown, Nepal's export, import and total foreign trade would have reached Rs 9 billion, Rs 116 billion and Rs 125 billion, respectively, in April-May. As a result of the nation-wide lockdown imposed from March 24 by the government in an attempt to stop the possible spread of coronavirus, Nepal's foreign trade has witnessed a sharp decline.
The latest data shows the country's export, import and total foreign trade stood at Rs 3.91 billion, Rs 58.29billionand Rs 62.20 billion, respectively. Nepal's imports during the month of March declined by more than 50 percent compared to February.
Foreign trade with Nepal's two major trading partners, India and China, has declined sharply.
Exports to India, Nepal’s largest trading partner, declined to Rs 3.15 billion, while imports were limited Rs 36 billion.
Trade with China also observed a tremendous decline due to the prolonged shutdown of the two main customs points at the northern border -- Rasuwagadhi and Tatopani. Exports to China amounted to Rs 10 million in March.
The government has banned flight operation and has closed most of the customs checkpoints on both the northern and southern border points. This has aff ected the foreign trade severely.
For last one and half month, Nepal has been importing only essential commodities from India. Import and export of goods through air route have also been affected after the government restricted international flights. If the current situation prevails for longer, it will not only hit Nepal's foreign trade but will have a multiplier impact on the country's economy. It will corrode the customs revenue, reduce demand and generate a vicious circle in the Nepali economy.
A trade defi cit at the bottom level in an import dominated country like Nepal may drag the county into subsistence consumption. Nepal's Foreign Trade in Chaitra Month of FY 2019/20 (in Rs Billion).