Trends, structure and drivers of Nepal’s agricultural trade

Abstract

This chapter analyses the trends and structure of agricultural trade in general and with India, in particular, and discusses the drivers of recent trends in agricultural trade. It presents the results of Nepal’s trade competitiveness and export potential based on trade data and recommends a number of measures to respond to trade-related issues. The study depicts a high comparative advantage for most of the exported agricultural items from Nepal with almost perfect complementarity in the agricultural export profiles of both India and Nepal. However, Nepal’s export potential in the Indian market is not very encouraging, and in most cases, the binding constraint to trade potential of Nepal is its limited export capacity and not the lack of opportunities in the Indian market.