15/07/2026
The government has updated its national trade strategy, setting an ambitious target of increasing the value of goods and services exports to 20 percent of Nepal’s gross domestic product (GDP) within the next two years.
The National Work Plan to Minimise the Trade Deficit, first introduced in 2021-22, was recently updated after three years of implementation.
The updated plan seeks to reduce Nepal's widening trade deficit by expanding exports. While exports account for just 8.7 percent of GDP, imports stand at 33.2 percent, leaving the country with a massive trade imbalance.
"The 20 percent target within the next two years is highly improbable," said Paras Kharel, executive director of the South Asia Watch on Trade, Economics and Environment (SAWTEE). "If the benchmark is the export-to-GDP ratio, there has been little meaningful progress once vegetable oil exports are excluded from the calculation."
Kharel noted that the Nepal Trade Integrated Strategy (NTIS) 2023 had already set a target of raising exports to 20 percent of GDP by 2027-28.
"The updated work plan appears to be off track to achieving even that timeline and highlights the structural challenges facing Nepal's export sector," he said.
According to him, discussions on import substitution and reducing the trade deficit have continued for years, but successive government plans have failed to produce the desired results.
Updated plan aims to narrow down the trade deficit by boosting exports, diversifying products and markets, but economists and exporters say policy bottlenecks make the target unattainable.
