Exports to India Jump 156.7% While Imports Rise 7.5% in 2025

Nepal’s trade with India in FY 2025/26 demonstrated a sharp contrast between export dynamism and steady import growth. Exports to India surged by an impressive 156.7 percent, reaching Rs. 19.45 billion, up from Rs. 7.57 billion in the same period of the previous year. This surge lifted India’s share of Nepal’s total exports to 81.3 percent, underscoring India’s critical role as Nepal’s largest trading partner. The sharp increase is attributed to the rise in exports of electricity, agricultural goods, and select manufactured products, benefiting from improved bilateral trade cooperation and India’s growing demand.

On the other hand, imports from India rose at a much slower pace of 7.5 percent, totaling Rs. 835.4 billion, compared to Rs. 776.8 billion in FY 2024/25. While still dominating Nepal’s import basket with a 58.4 percent share, India’s growth in exports to Nepal was lower than that of China (+14.1%) and other countries (+20.5%). This indicates that while Nepal’s dependency on Indian imports remains significant, the import growth rate is stabilizing compared to previous years.

The combination of soaring exports and modest import growth helped Nepal reduce its trade deficit with India by 8.6 percent, providing some relief to the overall trade balance. However, this also highlights Nepal’s heavy reliance on India for both its export earnings and import needs, creating a structural dependence that leaves the economy vulnerable to policy changes or demand shifts in India.