Nepal’s trade deficit increased by 10.52 percent in the first five months of the current fiscal year (FY), mainly due to the surge in import expenses for petroleum products, crude edible oils and smartphones.

The records with the Department of Customs (DoC) show that the country faced a negative trade balance of Rs 649.68 billion during mid-July and mid-December this year. The figure under the heading was Rs 587.82 billion in the same period of last FY.

In the review period, Nepal’s expenses on merchandise imports increased 15.83 percent. The import amount surged to Rs 766.18 billion from Rs 661.48 billion. A sharp rise in exports by 58.17 percent helped the country’s earnings from cross border trade to rise to Rs 116.50 billion from Rs 73.65 billion.

Overall, the total trade volume of the landlocked country stood at Rs 882.69 billion. The amount was 20.07 percent more compared to Rs 735.14 billion in the corresponding period last year.

Diesel, petrol, cooking gas, raw material of iron rod, crude edible oils, and smartphones were the major imports. According to the DoC, the import of petroleum products stood at Rs 108.02 billion, which included diesel worth Rs 45.60 billion, petrol worth Rs 27.33 billion and cooking gas of Rs 22.39 billion.

Similarly, the raw material for soybean oil stood second in the import list. In the review period, Nepal imported crude soybean oil worth Rs 39 billion, followed by gold worth Rs 15.72 billion, mobile phones of Rs 15.04 billion and paddy of Rs 6.88 billion during the review period.

On the other hand, the country earned a notable amount by exporting edible oils, large cardamom, readymade garment, plywood and woolen carpet, among others. Soybean oil with its export value of Rs 46.55 billion led the segment.

Likewise, large cardamom ranked second on the export list, generating total earnings of Rs 5.53 billion. Woollen carpet exports earned Rs 4.13 billion, while woven garments and plywood brought in Rs 1.33 billion and Rs 1.32 billion, respectively.

Meanwhile, the government’s earnings from customs revenue inclined 6.68 percent as imports posted double-digit growth in the review period. The customs revenue collection increased to Rs 197.59 billion from Rs 185.21 billion.

The government collected customs revenue of Rs 19.66 billion from diesel imports, the highest among all. The revenue collection from petrol imports stood at Rs 17.84 billion.

Import taxes contribute a major portion in government revenue earnings in Nepal. In the review period, the import taxes made 47.62 percent out of the government revenue generation worth Rs 414.90 billion.