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Analysis and Studies - Country Analysis

Nepal: a look at the market

By SkyMinder Sales Enablement Team November 18th 2024

Nepal is a landlocked country in South Asia, with over 120 ethnic groups and languages, with Hinduism and Buddhism being the predominant religions. The country has several UNESCO World Heritage Sites, such as Kathmandu Durbar Square, Lumbini (the birthplace of Lord Buddha), and Chitwan National Park, known for its biodiversity.

Since transitioning to a federal democratic republic in 2008, Nepal has faced political challenges, including coalition governance and stability issues. Despite struggles with poverty and infrastructure, the country holds potential for growth in renewable energy, tourism, and agriculture, leveraging its strategic position between India and China for trade and investment. Overall, Nepal is a nation rich in landscapes and culture, working towards sustainable development amidst various challenges.

The national flag of Nepal is unique, featuring two stacked triangles that make it the only non-rectangular flag in the world. The colors used are crimson red, representing the bravery of the Nepalese people, and blue, which stands for peace and harmony. The upper triangle displays a white moon, symbolizing tranquility and the gentle nature of the Nepalese, while the lower triangle contains a white sun, signifying warmth, strength, and the nation's courage. Officially adopted in 1962, the flag embodies Nepal's rich cultural heritage and serves as a powerful symbol of national pride, unity, and sovereignty for its citizens.

Nepal has a high level of specialization in Knotted Carpets ($90.4M), Nutmeg, mace and cardamons ($47.4M), Felt ($28.3M), Non-Retail Synthetic Staple Fibers Yarn ($92.3M), and Other Vegetable Products ($19.5M).

 

 

In 2022 Nepal was the 153rd in the world in terms of total exports, with a trade of $1.43B. and the 105th in total imports, with a trade of $13.4B.

In 2022 the most exported product was Palm Oil, with a trade of $184M, ahead of Soybean Oil ($180M), Non-Retail Synthetic Staple Fibers Yarn ($92.3M), Knotted Carpets ($90.4M), and Fruit Juice ($48.6M), exporting mostly to India (67%), United States (10.6%), Germany (3.02%), Turkey (1.99%), and United Kingdom (1.84%).

The graphic shows Nepal’s heavy dependence on India for key products while also highlighting efforts to diversify exports in certain sectors, suggesting a need for broader market exploration to enhance trade resilience.

 

We can observe that the exports portfolio is heavily influenced by trade dynamics with India, as palm oil and soybean oil emerge as the top exports, each with 100% directed to the Indian market. Non-retail synthetic staple fibers yarn, also relies significantly on India but shows potential for diversification with 27.9% exported to Turkey. In contrast, knotted carpets demonstrate a more balanced export strategy, with the United States as the primary market and additional sales to Germany and the United Kingdom, whereas fruit juice exports are almost entirely sent to India.

  1. Palm Oil (12.9%): 100% India
  2. Soybean Oil (12.6%): 100% India
  3. Non-Retail Synthetic Staple Fibers Yarn (6.47%): 71.2% India, 27.9% Turkey
  4. Knotted Carpets (6.34%): 57.6% United States, 8.45% Germany, 6.53% United Kingdom, 4.74% Italy,55% France, 2.74% Canada, 2.09% Australia, 1.77% China
  5. Fruit Juice (3.4%): 99.9% India

Whereas the most imported product was Refined Petroleum, with a trade of $2.24B, followed by Petroleum Gas ($504M), Gold ($433M), Rice ($322M), and Soybean Oil ($306M), importing mostly from India (64.5%), China (13.2%), United Arab Emirates (2.79%), Indonesia ($2.21%), and United States (2.08%).

The graphic shows that India remains the dominant player in Nepal's import market for crucial goods, even though there are signs of diversification, particularly in gold and soybean oil, suggesting opportunities for Nepal to broaden its supply chain and enhance trade resilience. Refined petroleum, the most imported products, predominantly sources from India.

This heavy reliance on India is further evident in other key imports, such as petroleum gas and rice, highlighting the country's significant dependency on its neighbor for essential commodities. Gold imports display a more diverse sourcing strategy, with the United Arab Emirates as the primary supplier, followed by Qatar and Saudi Arabia, while soybean oil imports primarily source from Argentina and Brazil, indicating a shift in sourcing away from regional partners.

  1. Refined Petroleum (16.7%): 99% India
  2. Petroleum Gas (3.75%): 100% India
  3. Gold (3.23%): 57.3% United Arab Emirates, 21% Qatar, 5.54% Saudi Arabia, 5% Switzerland, 4.89% Turkey, 0.93% United States, 0.9% United Kingdom
  4. Rice (2.4%): 99.4% India
  5. Soybean Oil (2.28%): 63.4% Argentina, 10.8% Brazil,45% Paraguay, 3.66% Vietnam, 2.19% Italy, 1.14% United States

Between 2021 and 2022, the fastest growing exporter was Singapore, with an increase of $23.6M, ahead of Central African Republic ($8.87M) and Turkey ($8M).

 

 

  1. Singapore: from $1.91M to $25.5M
  2. Central African Republic: from $7.88k to $8.88M
  3. Turkey: from $20.3M to $28.3M

Whereas the country with the fastest growth in imports was Jordan, with an increase of $127M, followed by Qatar ($88.9M), and Oman ($44.8M).

 

 

 

  1. Jordan: from $945k to $128M
  2. Qatar: from $7.53M to $96.5M
  3. Oman: from $16.7M to $61.5M

Sources: 

https://oec.world/en

https://www.cia.gov/the-world-factbook/countries/