Nepal’s Exports to China Plunge 65% in 2025/26: NRB Data Reveals Crisis

According to the latest data from the Nepal Rastra Bank (NRB), Nepal’s exports to China have witnessed a severe downturn, plunging by 65.2% in 2025/26 compared to the previous fiscal year. The export value fell sharply to just Rs. 54.8 million in one month, reflecting both declining demand and structural challenges in bilateral trade.

Major export items to China suffered steep declines. Handicrafts (metal and wooden) fell by 89.4%, Agarbatti by 40.4%, Woolen Carpets by 43.7%, and Readymade Garments by 50.6%. Even traditional exports like Pashmina, which had grown in 2024/25, slowed to just a 2.3% rise in 2025/26. Meanwhile, Rudrakshya exports declined 10.8%, signaling weakening demand.

Some items showed marginal resilience. Other handicraft goods grew by 9.2%, and niche sectors like pashmina and handmade goods still hold potential, but overall performance indicates a deep crisis. Rising non-tariff barriers, disrupted logistics at Rasuwa and Tatopani customs, and reduced Chinese demand for Nepali products are key factors behind this contraction.

This downturn underscores Nepal’s heavy dependence on India for trade and the urgent need to diversify export markets and improve competitiveness. Without policy reforms and better infrastructure, Nepal’s trade deficit with China will continue to widen.