A senior government official has expressed grave concern over the huge and burgeoning trade deficit.

Bharat Bahadur Thapa, Secretary at the Ministry of Industry, Commerce and Supplies, said that in the last fiscal year, Nepal conducted total trade transactions worth Rs 222 billion. “Of that, our exports totalled Rs 60 billion while our imports stood at astounding Rs 162 billion. And nearly 70 percent of the transactions were with only one country (India),” he said pointing at fundamental flaws in Nepal’s trade regime.

Secretary Thapa revealed that data of the first few months of the current fiscal year, too, were indicating the continuation of the same trend. “Our exports have further declined in the first six months of the current fiscal year,” he said.

Speaking at a program, held in Kathmandu on Thursday, titled “Trade Policy and Export Diversification” organised by South Asia Watch on Trade, Economics and Environment (SAWTEE), ActionAid Nepal in association with the UNDP Regional Centre, Thapa said that Nepal was lagging far behind in trade growth at both global as well as regional level.

Secretary Thapa also expressed apprehensions over the likely fall out of the recent reduction in tariff line of some products by the Indian government. ‘Traditionally, our exports have flourished by taking advantage of preferential arrangements. Such preferences are fast eroding at all level and in all sectors. As countries are moving ahead with bilateral agreements, there is a need to identify our strengths,” he said.

Speaking at the program, Chandi Raj Dhakal, president of Federation of Nepalese Chamber of Commerce and Industry (FNCCI), said Nepalese businesses were losing their competitive edge amid deteriorating business environment thanks to conflict and unrest.

“For the past ten days, goods are stranded en route due to Terai unrest,” he said. Navin Dahal, executive director of SAWTEE, said since Nepal’s trade deficit and trade concentration were at dangerous levels, new policies and strategies need to be adopted.

At the program,, the SAWTEE submitted reports of its research on trade and industrial policy, and trade negotiation strategy.