Alternatively, it can also be India’s and China’s top imports from and exports to Nepal, if we assume that exports from Nepal to India (or China) equal imports by India (or China) from Nepal.
In 2010, the top ten exports of Nepal to India were textiles; ferrous metals; chemical, rubber, plastic; crops; beverages and tobacco product; metals; vegetables, fruits, nuts; food products; minerals; and leather products. Basically, its primary commodities. Meanwhile, the top ten exports of Nepal to China were wood products; metal products; textiles; mineral products; leather products; wearing apparel; chemical, rubber, plastic; machinery and equipment; vegetable oils an fats; and crops. Basically, no high value added products.
In 2010, the top ten imports of Nepal from India were petroleum, coal products; chemical, rubber, plastic; ferrous metals; machinery and equipment; mineral products; textiles; transport equipment; food products; motor vehicles and parts; and metals. Basically, the imports (demand) from India are pretty much price inelastic. Hence, the widening trade deficit, no matter what happens to the economy! Meanwhile, the top ten imports of Nepal from China were wearing apparel; textiles; electronic equipment; machinery and equipment; leather products; vegetables, fruits, nuts; chemical, rubber, plastic; manufacturers; metal products; and motor vehicles and parts. Basically, most of these are price elastic. The problem is that Nepal cannot produce them as competitively as the Chinese producers do because of the industrial ills and high cost of labor.
- The total value of top ten exports by Nepal to India is approximately USD 226 short of the value of top import (petroleum, coal products) from India. Nepal’s top export to India (textiles) is just USD 20 million higher than the value of textiles import from India.
- The total value of top ten exports by Nepal to China is approximately 16 times less than the top import (wearing apparel) from China. China’s tenth top export to Nepal (motor vehicles and parts) is USD 4.6 million higher than Nepal’s top export (wood products) to China.
The data is sourced from UNCOMTRADE database using WITS. It is at 2-digit level (GTAP nomenclature). I will have a similar blog post about India’s and China’s top ten exports to and imports from world.
Here is previous blog post on the growth rate, exports, imports and Nepal’s trade deficit with China and India.