Tuesday, January 22, 2013

Rising trade deficit to hit economy

Ministry of Commerce and Supplies today has stressed on the need to move forward bringing all pending issues on table to tackle widening trade gap with its southern and northern neighbours.
Concluding that the trade deficit between the two countries will have adverse impact in the country’s economy, the ministry has asked experts to float ideas on reducing the balloning trade deficit.
India is a major trade partner of Nepal, an official at the ministry said, adding that the country had a total trade worth Rs 372.30 billion — export of Rs 50.93 billion and import of Rs 321.34 billion — with India alone in the fiscal year 2011-12.
The trade deficit with India stood at Rs 270.41 billion, which is 63.8 per cent of the total trade deficit of the country, the ministry data revealed.
Trade deficit with the northern neighbour China has seen huge increase in recent years. The country has imported goods worth Rs 53.90 from China in 2011-12 against Rs 46.38 billion a year ago in 2010-11. But exported too less.
The government should identify exportable items and promote exporters to be engaged in trade activities, the official at the ministry said, adding that simplification of modalities for traffic-in transit and remove of non-tariff barriers and administrative hassles will help increase exports and substitute imports that have also been sky rocketing in recent years mainly fuelled by remittance.
The government should put its effort in improving the export volume of agricultural goods including leather, ginger, tea, herbs, toothpaste, textile and handicrafts, the official opined.
India, USA, Bangladesh, China, Bangladesh, Germany, UK, Japan, France, Italy are the main importers, he said, suggesting the government to identify new destinations to expedite export of Nepali goods.
Nepal’s trade
Name of country – 2010-11 – 2011-12
India – Rs 302.03 billion – Rs 372.30 billion
China – Rs 46.38 billion – Rs 53.90 billion
Others – Rs 113.69 – Rs 146.06 billion
Total – Rs 462.10 billion – Rs 572.26 billion
(Source: Trade and Export Promotion Center)

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