China Supplies 19.6% of Nepal’s Imports, But Exports Shrink to Just 0.2%

Nepal’s trade with China in FY 2025/26 highlights one of the country’s most imbalanced trade relationships. Imports from China climbed by 14.1 percent, reaching Rs. 279.96 billion, which accounts for 19.6 percent of Nepal’s total imports. These imports largely consist of consumer electronics, industrial equipment, textiles, and raw materials, showing how deeply Nepal relies on Chinese goods for its consumption and production needs.

On the other hand, Nepal’s exports to China collapsed by 65.2 percent, falling to a mere Rs. 54.8 million, which represents only 0.2 percent of Nepal’s total exports. Despite Nepal’s geographical proximity and long-standing bilateral ties, Nepali goods struggle to penetrate the Chinese market due to non-tariff barriers, high competitiveness of Chinese products, and weak logistical connectivity across the Himalayas.

This severe imbalance pushed Nepal’s trade deficit with China up by 14.6 percent, making it one of the fastest-widening deficits among Nepal’s trading partners. While China is a vital source of imports, its role as a negligible export market exposes Nepal’s structural vulnerabilities. Without diversification or stronger market access negotiations, this dependence risks deepening Nepal’s foreign trade challenges.