Nepal’s Exports to India Jump 139.9% in FY 2025/26 – Soybean Oil Dominates Trade

Nepal’s trade performance with India has witnessed a dramatic upswing in FY 2025/26, as the country’s exports surged by 139.9% in the first two months compared to the same period last year. According to the Nepal Rastra Bank (NRB) Mid-September 2025/26 report, total exports to India reached Rs. 38.35 billion, up from Rs. 15.99 billion in the same period of FY 2024/25. This surge was largely driven by the overwhelming contribution of soybean oil, which continues to dominate Nepal’s export basket.

Soybean Oil Leads the Charge

The NRB data shows that soybean oil exports to India alone amounted to Rs. 20.42 billion, representing over 53% of total exports to the southern neighbor. Despite no significant change from the previous year’s record surge, soybean oil remains the cornerstone of Nepal’s trade growth, driven by strong re-export demand under favorable tariff arrangements and steady processing capacity within Nepal’s industrial zones.

Strong Growth Across Key Commodities

Exports of major commodities to India — which collectively account for over 84% of Nepal’s total trade with India — rose by 153.5%, reaching Rs. 32.55 billion in two months. Notable high-performing exports include:

• Palm Oil – Rs. 1.36 billion, up 318.4% year-on-year.

• Jute Goods – Rs. 1.61 billion, up 61.1%.

  • Within this, Hessian jute goods grew by 43.3%, and sackings doubled by 105.8%.

• Brans – Rs. 98 million, up 104.8%.

• Noodles – Rs. 275.9 million, up 54.8%.

• Shoes and Sandals – Rs. 488 million, up 35.2%.

• Ayurvedic Medicine – Rs. 602 million, up 30.5%.

This robust performance indicates a broad-based recovery in export-oriented industries, including processed foods, agro-based goods, and light manufacturing.

Declining and Weak Segments

Despite the impressive overall performance, some traditional exports continued to decline.

• Tea exports fell 37.4% to Rs. 683.7 million, affected by pricing competition in the Indian market.

• Zinc sheets dropped sharply by 77.6%, reflecting reduced industrial demand.

• Ginger (-36.8%), copper wire rod (-35.1%), and G.I. pipes (-34.7%) also saw downturns due to weaker import demand from India.

Macro and Trade Implications

The strong export momentum to India aligns with Nepal’s record foreign reserves (Rs. 2.88 trillion) and favorable balance of payments, which recorded a surplus of Rs. 153.7 billion. This surge has contributed to external sector resilience, supporting Nepal’s current account surplus of Rs. 130.7 billion.

Experts attribute the sharp export rebound to improved industrial output, enhanced trade logistics, and policy stability following a year of subdued growth. However, they also caution that heavy dependence on re-exported edible oils poses sustainability risks. A shift toward value-added manufacturing, diversification of export products, and enhancement of trade competitiveness will be essential for long-term growth.