NRB Report: Nepal’s Trade with China Expands Sharply as Industrial Imports Rise 32%

The Nepal Rastra Bank (NRB) has reported a strong surge in Nepal’s trade with China during the first two months of FY 2025/26, signaling rapid growth in industrial and technological imports. According to NRB’s latest Macroeconomic Update (Mid-September 2025), imports from China jumped by 25.1 percent to Rs 65.17 billion, compared to Rs 52.10 billion in the same period last fiscal year. Major industrial categories — including telecommunication equipment, machinery, solar panels, and chemical fertilizers — recorded sharp increases, driving overall trade expansion.

Data from NRB’s Table 20 shows that imports of major commodities rose by 31.9 percent, reaching Rs 48.15 billion, while other items grew by 9.2 percent to Rs 17.02 billion. The largest individual gain came from telecommunication equipment and parts, which soared by 52.6 percent to Rs 8.06 billion, reflecting Nepal’s rapid investment in digital connectivity and communication networks. Machinery and industrial tools also saw steady growth, while solar panel imports surged 135 percent, and chemical fertilizers climbed to Rs 13.66 billion, highlighting Nepal’s continued dependence on China for essential manufacturing and agricultural inputs.

Meanwhile, traditional consumer imports such as readymade garments (-41.5%), shoes and sandals (-54.4%), and metal furniture (-42.8%) dropped sharply. This pattern suggests a strategic economic shift toward industrial and technology-oriented imports rather than consumer goods. However, the widening import gap also underscores Nepal’s persistent trade imbalance with China, as exports remain comparatively low.

Economists note that this industrial import boom could support long-term productivity and infrastructure development, but also caution that it poses foreign exchange and balance of payments risks if not matched by stronger domestic production and export diversification.