Nepal's foregin trade with India: problems and prospects
Date
2013
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Abstract
Foreign trade plays a significant role in the economic growth and development of a country. India is the biggest trading partner of Nepal. Export and Import both are in increasing trend but export is lower than the import. This results higher trade deficit which causes deficit in balance of payment. Nepal is facing huge trade deficit problem in recent years. This study attempts to explore the trends and patterns of imports,exports and balance of trade between Nepal and India. The research is primarily based on secondary data.Data are collected from Nepal Rastra Bank, Trade promotion centre , Central Bureau of Statistics,Ministry of Finance and Ministry of Commerce and Supplies.
The trend analysis covers the period from FY 2000/01 to FY 2010/11.The volume of export was Rs.26,030.20 million in FY 2000/01 and reached to Rs.38952.70 million in FY 2010/11. The volume of import was Rs.54700.90 million in FY2000/01 and reached to Rs.239,831.90 million in FY 2010/11.The percent share export and India on total trade of Nepal was found to be 46.8 percent and 39.1 percent respectively 2000/01. Similarly the percent share of export and import in respect in the total trade between Nepal and India was realized 65.5 percent and 57.6 percent respectively for the year 2009/10. The share of export to India on total export was realized as 67.0 percent in the year 2010/11. Similarly the share of import from India on total import of Nepal came to be 66.91 percent in the year 2010/11. This reveals that share was import from India is following the increasing trend.
Nepal is an underdeveloped country like other LDCs. She is facing the problem. It cannot uplift the economic situation automatically. She needs the support of other countries. India a great growing economic powerhouse of the world can be of great helps in its development. The major prospects of in do-Nepal trade are: Hydro resources, Tourism, Education, and communication technology, Nepal India a joint venture initiative etc. And the major problems of Nepal-India trade are:land lockedness, trade deficit inadequate market, problems related to transit,production bottlenecks,and foreign economic policy constraints.
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Keywords
Foreign trade, Economic policy