Kathmandu- Nepal's foreign trade has shown significant growth in the first eight months (mid-July to mid-March) of the current fiscal year.

After a prolonged period of stagnation, the economy is gaining momentum due to a surge in both imports and exports. Government officials have even stated that this increase in foreign trade reflects economic vibrancy and rising market demand.

However, the latest trade statistics contradict the government’s claims of economic improvement.

In the first eight months of the current fiscal year, goods worth Rs 1.145 trillion were imported, marking an 11.8 percent increase from Rs 1.03 trillion in the same period last year.

Among total imports, crude cooking oil accounted for Rs 56 billion, with crude soybean oil alone reaching Rs 45 billion. Additionally, Nepal imported raw sunflower oil worth Rs 11 billion during the review period.

Surprisingly, these imported crude oils are not consumed domestically. Instead, they are processed in factories and then exported to India. Due to high demand and favorable trade relations with India, traders have been exporting refined oil to the Indian market.

As a result, Nepal's trade growth is primarily driven by exports to India rather than an increase in domestic demand.

Meanwhile, inflation in consumer goods has also contributed to the rise in trade, but there are no signs of improvement in the demand for industrial raw materials.

During the review period, Nepal exported refined soybean oil worth Rs 47 billion and sunflower oil worth Rs 7 billion. However, rather than importing oilseeds, traders have been importing crude oil, processing it in Nepal, and then exporting the refined product.