Fiscal Year 2079 - 2080 Trade Analysis: Signals Digital Transformation?

According to the statistics of international trade for the fiscal year 2079/80 published by the Customs Department on Monday, Nepal has spent NPR 483 billion on the import of the top 10 items including petroleum products besides sponge iron, soybean oil, coal, and crude palm oil. 

Nepal earned NPR 67 billion 41 crores 81 lakhs from the top 10 exports.

Nepal imported the most petroleum products last year. In that import, Nepal spent NPR 353 billion on diesel (153 billion), petrol (66 billion 84 crores), and cooking gas (58 billion 15 crores).

The second-largest import in Nepal is gold. Last year, Nepal spent NPR 43 billion and 89 crores on it.

Similarly, the third-largest import is sponge iron. Nepali steel companies have imported 77 crores and 97 lakh kilos of sponge iron for making rods which cost NPR 43 billion and 60 crores.

The fourth-largest import is soybean oil. Last year, Nepal spent over NPR 35 billion and 58 crores to import more than 17 crore 75 lakh liters of soybean oil.

The fifth-largest import is coal. According to customs details, Nepal has spent NPR 27 billion and 12 crores to import more than one billion18 crore kilos of coal.

The sixth-largest import is crude palm oil. In this oil import, Nepal has spent NPR 25 billion and 91 crores. During this period, more than 16 crore 90 lakh 22 thousand liters of oil have been imported into Nepal.

The seventh-largest import is medicine. In the last year, a little more than a crore 26 lakh kilos of medicine were imported in Nepal, the cost amounted to NPR 24 billion and 66 crores.

The eighth largest import is the smartphone. Nepal imported smartphones equal to drugs last year. During this period, Nepal has spent NPR 24 billion and 39 crores for 15 lakh 69 thousand 596 smartphones.

The ninth-largest import is urea fertilizer. Nepal spent NPR 22 billion and 94 crores on the import of 25 crore 22 lakh kilos of urea fertilizer last year.

The tenth largest import is rebar. To make steel, Nepal purchased 2 billion 52 crore kilos of rebar worth NPR 22 billion and 94 crores last year.

One interesting point we noticed is the high import of smartphones, which is equal to the import of drugs in terms of cost. This indicates a significant digital transformation in Nepal, with a growing number of people adopting smartphones for communication, work, and entertainment.

The growing import of smartphones reflects digitalization but raises questions about domestic production capacities. This points out Nepal must diversify its economy and invest in sectors like renewable energy and technology to reduce dependency on imports and stimulate growth. 

However, this also raises an important question about Nepal's capacity for domestic production of digital devices. The high import cost of smartphones, which amounted to NPR 24 billion and 39 crores for 15 lacks 69 thousand 596 smartphones, also suggests a potential opportunity for domestic manufacturers.

If Nepal can develop its own technology sector to produce smartphones or other digital devices, it could significantly reduce import costs, create jobs, and stimulate economic growth. Moreover, the development of a domestic technology industry could also support other sectors of the economy, such as software development, digital services, and e-commerce further, driving economic development and digital transformation in the country.

In a nutshell in fiscal year 2079/80, Nepal's international trade showed a heavy reliance on imports, with petroleum products as the top import, amounting to NPR 483 billion. Key imports also include gold, sponge iron, soybean oil, coal, and crude palm oil. The export sector earned NPR 67 billion, but there's a significant trade deficit.