Overall Nepal-China Trade Balance Worsens: Imports Rise, Exports Crash

Nepal’s trade imbalance with China has widened further in 2025/26, with imports continuing to rise while exports have plunged to historic lows. According to Nepal Rastra Bank (NRB) data, Nepal’s imports from China increased by 14.1% in 2025/26, reaching Rs. 27.9 billion in a single month, while exports to China collapsed by 65.2%, dropping to just Rs. 54.8 million in the same period.

The resulting trade deficit with China surged to nearly Rs. 27.9 billion, highlighting Nepal’s heavy dependence on Chinese goods. While imports of machinery, electronics, and consumer products remain high, Nepal’s traditional export strengths—such as handicrafts, woolen carpets, garments, and incense sticks—fell sharply, exposing a structural weakness in Nepal’s competitiveness.

This worsening trade balance raises concerns for policymakers. Nepal’s overreliance on Chinese imports without a corresponding export base deepens the foreign exchange burden and threatens domestic industries. Experts argue that Nepal must urgently diversify export markets, improve product quality, and reduce logistical bottlenecks at key trade routes like Rasuwa and Tatopani to narrow the gap.