Kathmandu, June 5: In the review period of FY 2000, total foreign trade increased by 32.8 per cent over that of corresponding period of the previous year and reached to Rs. 101,809.3 million.

During the review period, there was a tremendous increase of 52.4 per cent in trade with India to a total of Rs. 40,308.1 million while trade with other countries increased by 22.5 per cent totaling to Rs. 61,501.2 million. The share of trade with India, as a result, stands at 39.6 per cent of the total foreign trade, against 34.5 per cent of such trade during the review period of the previous fiscal year, while that of other countries is 60.4 per cent, according to the Economic Survey, 1999-2000.

Total export during the review period increased by 41.6 per cent to Rs. 32,501.4 million compared to that of the corresponding period of the previous year.

Export to India, as indicated above, rose tremendously by 80.7 per cent to Rs. 13,904.3 million and that with other countries rose by 21.8 per cent and reached Rs. 18,597.1 million. India’s share in total export increased to 42.8 per cent as against 33.5 per cent during the corresponding review period of the year before, the Economic Survey says.

Total imports increased by 29.1 per cent of Rs. 69,307.9 million during current year’s review period as compared to the corresponding period of the year ago. Import from India increased by 40.7 per cent to Rs. 26,403.8 million while that from other countries increased by 22.8 per cent to Rs. 42,904.1 million during the review period. Continued expansion in import from India can be attributed to the use of facility to pay in convertible currency against import of certain commodities.

Despite the export growth surpassed import growth during the review period of the current fiscal year, the total trade deficit increased by 19.8 per cent to Rs. 36,806.5 million, due to bigger import base.

Deficit trade balance with India rose by 12.9 per cent to Rs. 12,499.5 million while that with other countries increased by 23.6 per cent to Rs. 24,307 million over the corresponding period of previous fiscal year, it is stated in the Economy Survey.

As regards the composition of export during the review period of the current fiscal year, export to India included traditional items such as mustard and mustard seeds, medicinal herbs, dry ginger, pulses, oil cakes, catechu, jute products and sal seed oil.

Export of all of these showed an increase. Increases were encouraging in export of industrial commodities as well, such as, toothpaste (139.5 per cent), polyster yarn (86.4 per cent), aurvedic medicine (103.4 per cent) and soap (40.0 per cent). Along with this, new products such as yarn, beer, zinc oxide, shoes, sandals, juice, particles board, plastic goods and GPI sheets registered a high increase. Export of Pasmina-ware (fine lamb’s wool) to India also increased significantly.

Export of items like cardamom, noodles, vegetable ghee, rice bran oil, leather and hides, however, decreased in the review period. Export to other countries excepting India is predominated, as has been the case, by two items, namely, the woollen carpets and the ready-made garments with their combined share of over 80 per cent of such export.

The share of this segment in total export of the review period further increased to 84.2 per cent compared to 82.2 per cent during the previous year’s review period. Export of ready-made garments showed an increased of 50.2 per cent over that of previous year to a total of Rs. 9,344.9 million while that of woollen carpets showed a marginal decline of 0.2 per cent to the total of Rs. 6,312.1 million. Export of handicrafts, tea, gold and silver jewellery as traditional items has continued their gradual upsurge.

The boost in imports from India during the current year’s review period was fuelled by the imports of industrial raw materials and construction materials for which payments in convertible currency is exclusively allowed. Imports under such payments facility increased by 55.0 per cent to a total of Rs. 4,820 million occupying 18.3 per cent of total imports from India during the review period. Increased import included mechanical equipment, M.S. billets, steel sheets, M.S. wire rod, industrial chemicals, various types of yarn, cement, G.I. wire etc. while the imports of electrical equipment, polyster fibre, carbon block, caustic soda and transport equipment decreased. Import from the Third countries during the review period of last year had decreased but it increased by 22.8 per cent during the current year. Gold, machinery and spare parts, computers and their accessories, were the items helping import to rise while the import of petroleum products, medicines, raw wool, electrical goods, raw silk, crude oil, writing and printing papers, declined.

Balance of payments during the first six months of the current fiscal year, continued to be favourable by Rs. 5,792.6 million compared to Rs. 5,919.0 million during the last year’s review period. Trade deficit during the review period increased by 31.0 per cent to Rs. 28,403.0 million as compared to that of last year’s review period. Income under Services heading increased by 13.2 per cent totaling Rs. 21,665.7 million during this period against payment of Rs. 8,447.6 million resulting in net income of Rs. 13,218.1 million under this heading. Likewise, income under Transfer heading also registered an increased of 13.2 per cent totaling Rs. 12,093.5 million against payment of Rs. 1,316.5 million resulting in net income of Rs. 10,777.0 million.

As the combined total of net income under Services and Transfer headings was not enough to bridge the gap in overall trade balance, the deficit in current account emerged as Rs. 4,407.9 million. Nevertheless, due to inflow of direct foreign investment to the tune of Rs. 234.4 million receipt of Rs. 2821.5 million as net foreign capital and the receipt of Rs. 7,144.6 million with a meteoric rise of 235.6 per cent under Miscellaneous Capital, the overall balance of payments is in surplus of Rs. 5,792.6 million after meeting the current account deficit. This surplus is marginally lower than Rs. 5,919.0 million of the last year’s review period, the Economy Survey 1999-2000 states.

As regards the foreign currency reserve, in increased by 17.9 per cent to Rs. 90,378.7 million by mid-March 2000 in comparison to that of mid-July 1999. Of this total, Nepal Rastra Bank and the commercial bank held Rs. 63,517.7 million (70.3 per cent) and Rs. 26,861.0 million (29.7 per cent) respectively. As of mid-March 2000, convertible currency portion showed an increased by 14.8 per cent to Rs. 79,184.2 million of which Rs. 53,914.6 million (68.1 per cent) is held by the Nepal Rastra Bank and Rs. 25,269.6 million (31.9 per cent) by the commercial banks. This level of reserve is enough to sustain Nepal’s import for almost 10 and a half months, it is said.