India Remains Nepal’s Largest Trading Partner

Why in the news?

  • India remains Nepal’s largest trading partner.
  • Nepal’s trade deficit reached NPR 237.45 billion by mid-September 2024-25.
  • Nepal maintains trade relations with 145 countries but has trade deficits with over

India Remains Nepal's Largest Trading Partner

Major Trade Deficits:

  • Nepal’s largest trade deficits are with India (NPR 144.67 billion) and China (NPR 51.80 billion).
  • India and China are Nepal’s biggest trade partners, with a significant imbalance in favour of imports.

Key Exports and Imports: 

  • Exports to India: Hydroelectric power, resin, agricultural produce, yarn, pashmina shawls, hides and skins, handicrafts, and silver/gold jewellery.
  • Imports from India: Petroleum products, chemical fertilisers, salt, sugar, rice, vehicles, copper, cotton, and other goods.

About India’s ‘Neighbourhood First’ policy:

  • India’s ‘Neighbourhood First’ Policy: A core aspect of India’s foreign policy.
  • Objective: Strengthen relations with South Asian neighbours in areas like economy, science, technology, research, and education.
  • Regional Cooperation: Utilises platforms such as SAARC, SASEC, BBIN, and BIMSTEC.
  • Leverages New Opportunities: Creates synergies for collaboration.
  • Complementary Policies: Supports India’s Look East (Southeast Asia) and Look West (Middle East) policies for broader regional engagement and influence.

India-Nepal Relations:

  • Close Relations: India and Nepal share deep historical, cultural ties, open borders, and people-to-people connections.
  • Strategic Importance: Nepal is vital for India’s regional strategic interests, symbolised by the “Roti Beti”
  • Border: Nepal shares 1,850 km border with five Indian states.
  • Trade: India is Nepal’s largest trade partner; exports to Nepal constitute 22% of Nepal’s GDP.
  • Development Partnership: India provides financial and technical aid for infrastructure, education, and health projects.
  • Railway Links: Ongoing projects for cross-border railway and Mahakali River bridge.
  • Disaster Relief: Operation Maitri provided post-earthquake reconstruction aid worth $1 billion.

Sources Referred:

PIB, The Hindu, Indian Express, Hindustan Times