Exports to India on the downslide

Kathmandu, July 24:

Nepal’s trade with its major trade partner India is falling continuously over the recent past months. One of the reasons for declining exports is the dismal performance of the manufacturing sector.

Although the external sector displayed mixed performance in the first 11 months of 2007-08 and total exports rose by 0.4 per cent in comparison to a decline by 1.6 per cent in the corresponding period of the last fiscal year, exports to India fell by 8.1 per cent in contrast to its growth of 1.8 per cent in the same period of 2006-07.

The decline was mainly in the export of items like vegetable ghee, textiles, chemicals, resin and readymade garments to India. However, imports from India accelerated by 25.6 per cent in the review period compared to a growth of nine per cent in the corresponding period of 2006-07, states data from Nepal Rastra Bank.

The contributing factors for the upsurge in total imports in the first 11 months were a rise in the import of petroleum products, MS billet, vehicles and spare parts, hot rolled sheet coils and cold rolled sheet coils, wire and bread among others, from India.

Similarly, in 10 months of the fiscal year 2007-08, export to India declined by 7.5 per cent compared to a decline of one per cent in the same period of 2006-07. “Exports to other countries, on the other hand, grew by 13 per cent compared to a decline of 3.1 per cent in the comparable period of the previous fiscal year,” according to the report.

The scenario, in the past nine months was no different.

On the external front, export to India plummeted by 8.3 per cent and increased by 10.3 per cent to other countries. In the same period of the previous fiscal year, export to India had declined by 2.3 per cent. During the past eight months of 2007-08 also, export to India plummeted by 6.9 per cent compared to a decline by 6.4 per cent in the same period of 2006-07.

Exports to other countries, however, registered a growth of 7.2 per cent in the review period compared to a decline of seven per cent in the same period of previous fiscal year.