Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 2/14/2018
Nepal is a low-income, developing nation with an estimated GDP of $24.49 billion in fiscal year (FY) 2016/17.  The World Bank projects that Nepal’s economy will grow by 7.5 percent in FY 2016/17 (Note: Nepal’s fiscal year runs from July 16 to July 15).  Nepal’s estimated population is 28.71 million (male 14.21 million, and female 14.50 million), with a per capita annual income of $853.  The median age in Nepal is 24 and more than half of the population is under the age of 25.

Political instability, a landlocked location, challenging topography, poor infrastructure, a poorly trained and educated workforce, and a weak policy and regulatory environment are some of the impediments to economic growth.

Agriculture accounts for 28.9 percent of GDP and 65.7 percent of employment.  However, there has been significant migration from rural to urban areas and overseas.  An estimated four to six million Nepalis work abroad, primarily in the Gulf countries, Malaysia, and India.  Nepal received $6.27 billion in remittances in FY 2015/16, equivalent to nearly 30 percent of GDP.  Nepalis working in India also contribute significantly to remittances, but the exact amount is unknown as many Nepalis take cash back from their jobs in India, rather than remitting the money through formal channels.  Officials at the Nepal Rastra (Central) Bank also believe many migrant workers use informal channels to send money back to Nepal so the total amount of remittances is likely significantly higher than $6.27 billion.

India accounted for 62.2 percent of Nepal’s total trade in FY 2015/16.

In FY 2015/16, Nepal exported $661.2 million worth of goods, mainly woolen carpets, zinc sheets, textiles, polyester yarn, readymade garments, juices, pulses, and agricultural products.  Nepal’s annual imports are about $7.25 billion, mainly from India, China, and the UAE.  The main imports are petroleum products, vehicles and spare parts, machinery and parts, gold, medicine, electrical goods, and telecommunications equipment.

U.S.-Nepal bilateral trade is estimated at USD 129 million in 2016, according to data from the Office of the United States Trade Representative.  U.S. exports to Nepal were about USD 41 million.  Total U.S. investment in Nepal was USD 97.46 million through in FY 2015/16, according to GON statistics.  In December 2016, the United States established a new stand-alone trade preference program for Nepal, as mandated by the Trade Facilitation and Trade Enforcement Act of 2015.  Designed to help support Nepal’s economic recovery following the 2015 earthquakes, this program gives duty-free access to the United States for some products made in Nepal, including certain kinds of carpets, headgear, shawls, scarves, handbags, and suitcases.  More information on this program can be found on the U.S. Embassy to Nepal’s website.
In FY 2015/16, the United States was the second-largest export market for Nepal, accounting for 13.1 percent of total exports.  U.S. products made up only one percent of Nepal’s total imports.

Nepal traditionally runs large trade and current account deficits, which are offset by service, transfer, and capital account surpluses.  As of March 2017, the gross convertible foreign exchange reserve of the banking sector stood at USD 10.11 billion, enough to finance merchandise imports for 13.9 months.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

Nepal Trade Development and Promotion