Nepal’s trade deficit, which had been consistently rising, had started narrowing down in recent months especially following a rise in export of refined palm oil lately and fall in import of petroleum products. However, the recent decision of the Indian government to ban import of refined palm oil, Nepal’s top export, has raised many eyebrows.
Sujan Dhungana of The Himalayan Times spoke to Baikuntha Aryal, secretary at the Ministry of Industry, Commerce and Supplies, to know about the government’s position to resume export of palm oil to India and several other issues related to country’s commerce. Excerpts:
Nepal’s trade and commerce as of today are quite okay. If we analyse the country’s trade over the last one decade, trade deficit was rising at 20.4 per cent annually on an average. As of today, the trade deficit is slowly narrowing down. In the first five months of the current fiscal year, trade deficit has come down by 6.2 per cent. The narrowing trade deficit gap is the result of different factors, including policy intervention by the government. Import has come down by 4.3 per cent. The fall in imports is primarily because of the government’s policy intervention in the import of a few luxury goods. Similarly, the government has been focusing on proper internal supply system. As a result, production of goods and services of one region of the country has been fulfilling the demand of other regions. Meanwhile, export also increased by 27 per cent in the first five months of this fiscal. However, these trade statistics are not highly encouraging and there are a lot more things that need to be done to maintain trade balance. We need to focus on both production and export. Even while focusing on production and export, priority should be given to goods with comparative advantage. Thus, Nepal’s trade today is encouraging but not satisfactory.