India's Nepal Exports Plummet 16.6% Amid Political Unrest
India's exports to Nepal have taken a significant downturn, with a 16.6% year-on-year decline in September. This setback follows a period of political turmoil in Nepal, sparked by youth-led protests against corruption and unemployment. The unrest led to the resignation of the prime minister and home minister, disrupting cross-border trading with India.
The decline, to $516.62 million, was one of the steepest among India's major trading partners. This is a stark contrast to the 1.9% growth seen in exports to Nepal during April-September. Meanwhile, India's exports to several large economies like Spain, Brazil, and China showed strong double-digit growth in September. The disruption in trade has affected a wide range of goods, including petroleum, steel, pharmaceuticals, and machinery. Road routes were particularly impacted due to the violence, as Nepal heavily relies on road transport for Indian goods.
India maintains a substantial trade surplus with Nepal, with exports reaching $7.32 billion in FY25 compared to imports of $1.2 billion. However, the recent political unrest and subsequent trading disruptions pose a challenge to this trade relationship. As Nepal's new interim prime minister, Sushila Karki, takes office, both nations will need to work towards restoring stability and rebuilding cross-border trade.
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