KATHMANDU, Nov. 30 (Xinhua) -- Nepal's import declined for four consecutive months, a trend rarely in the last several years, contributing to decrease in widening trade deficit the country has been facing in recent years, Nepal's Department of Customs said.
According to the latest customs data, Nepal's import decreased by 6.92 percent to 450.29 billion Nepali Rupees (3.91 billion U.S. dollar) during the first four months of this fiscal 2019-20 that began in mid-July. On the other hand, exports surged by 23.9 percent to 36.27 billion Nepali Rupees (316 million U.S. dollar).
Earlier, Nepal witnessed drop in imports was in fiscal 2015-16 when the country faced alleged trade blockade from India. Even earlier, Nepal had witnessed such decline in imports only in fiscal year 2001-02, according to Nepal's central bank's data.
The country is seeing reversal in long trend of increased imports and slow growth in exports at a time when Nepal is witnessing decrease in remittance, the most important source of foreign exchange reserves. During the first quarter of this fiscal, remittance inflow in Nepal decreased by 4.9 percent, according to Nepal's central bank.
"Decrease in imports and increase in exports is very welcome news from the perspective of external sector stability," Rabi Sainju, former joint secretary of Nepal's Commerce Ministry, told Xinhua on Friday evening.
"But, we should also be concerned about the decrease in the imports of raw materials and construction materials because it suggests decreasing industrial and construction activities too which may have hit the economy."
The statistics of the Department of Customs showed that Nepal saw drop in imports of iron and steel, fuel, aircraft and parts, and vehicles during the period from mid-July to mid-November on year on year basis.
There has been a sharp decline in products like cement and clinkers in which the country is largely self-reliant. Nepal has attracted two large scale Chinese investments from China's Hongshi and Huaxin cement companies.
The imports of iron and steel, the key construction materials, dropped sharply by 33 percent while the imports of fuel and bitumen also slumped by more than 15 percent during the first four months of this fiscal. "As electricity production in the country is rising and industries which used to rely on diesel plants to run their factories, have abandoned purchasing diesel, helping to bring down fuel import," said Sainju. Fuel has the largest share in Nepal's import basket.
During the first four months, the imports of aircraft and their parts saw decline by 39 percent.
In the last fiscal year, Nepal's domestic airlines purchased at least a dozen aircraft. The imports of automobiles, one of the largest contributors to Nepal's revenue, also dropped by more than 6 percent, according to the customs data.
"On the other hand, Nepal's policy of discouraging import of vehicles, drinks like Red bull also helped to bring down imports," said Sainju.