Nepal’s trade deficit widened by 10.15 percent in the first half of the current fiscal year, largely due to the country’s continued dependence on imported petroleum products, official data show.

According to records maintained by the Department of Customs (DoC), Nepal recorded a trade deficit of Rs 797.004 billion between mid-July 2025 and mid-January 2026. The deficit stood at Rs 723.58 billion during the same period of the previous fiscal year.

The widening gap was driven by a sharp rise in imports against a comparatively modest increase in exports. Total imports increased by Rs 117.02 billion to Rs 939.02 billion during the review period, while export earnings rose by only Rs 43.23 billion to Rs 142.01 billion, the DoC said.

Petroleum products accounted for a significant share of the import bill. Nepal spent Rs 58.27 billion to import 630,256 kilolitres of diesel and Rs 33.07 billion on 380,235 kilolitres of petrol. Imports of cooking gas exceeded 274.85 million kilograms, costing Rs 27.04 billion, while air turbine fuel imports were valued at Rs 9.93 billion.

Other major imports included crude soybean oil worth Rs 48.83 billion, iron and iron products worth Rs 26.65 billion, gold worth Rs 18.83 billion (1,052 kilograms), and smartphones valued at Rs 18.52 billion.

On the export front, processed soybean oil remained Nepal’s top export item, generating Rs 56.08 billion in earnings. Exports of large cardamom brought in Rs 7.19 billion, followed by woollen carpets (Rs 4.87 billion), sunflower seeds and oil (Rs 4.78 billion), and fibre (Rs 3.46 billion).

India remained Nepal’s largest trading partner, accounting for 56.7 percent of total imports. During the six-month period, Nepal imported goods worth Rs 532.45 billion from India and exported Rs 115.74 billion, resulting in a trade deficit of Rs 416.71 billion with its southern neighbour alone.

Nepal conducted foreign trade with 152 countries during the period and recorded trade deficits with nearly all of them. The deficit exceeded Rs 195 billion with China, followed by Argentina (Rs 54.43 billion), the UAE (Rs 30.87 billion), Indonesia (Rs 9.81 billion), Thailand (Rs 9.10 billion), Malaysia (Rs 5.94 billion), Ukraine (Rs 4.40 billion), and the United States (Rs 3.68 billion).