FOREIGN TRADE IN NEPAL

Foreign trade refers to exchange of goods from one country to another. There are mainly two components foreign trades. They are export and import. Export refers to the situation where a country supplies surplus goods to other countries. On the contrary, import refers to that situation where a country demands deficit goods constitute the foreign trade of a country concerned.

Nepal is an underdeveloped country with an agrarian economic base. Nepal has no adequate production of agricultural as well as industrial goods. Thus, Nepal imports various goods from India and overseas countries required for the consumption and production.  Similarly, surplus good produced in Nepal are exported to other countries of the world. Such export and import of goods constitute foreign trade in Nepal. Thus from this discussion we can define precisely foreign trade that it refer to the transaction of goods and services between two or more countries which incorporates export and import. If the goods are exchanged within the country itself it is called domestic trade.

The history of foreign trade of Nepal is as old as the history of Nepal. In ancient times Nepalese goods were exported China and India. Imports were also made from these two countries. At present also, these two countries which lies in the North and south of Nepal are its major trade partners.

  

Development bank

 Development banks are established to develop agriculture, industries and infrastructure and employment opportunities to some extent. In case of Nepalese economy, development banks are providing their services in the following sectors.

A)     The fundamental objective of agricultural t bank development is to provide financial support to needy farmers for the modernization and commercialization in agriculture. However, recently this bank has started to provide its service to commercial services. This bank provide loan at subsidized int est. rate than other commercial banks. Agricultural development bank in Nepal was established in 2024BS. At present, some of its branches provides commercial services in the city area as well.

B)      Industrial development bank

The bank, which is established to accelerate and promoter the process of industrial in the country, is defined as industrial bank. Industrial bank provides short term, medium term and long term loan for the purchase of fixed assets and variable factor of production. It stands as the backbone of industrial sector to expand and modernize the small, medium and large industries of agricultural, transport, communication, education.

It is also known as investment bank. There are two industrial banks in Nepal.

C)      Rural development banks

The concept of rural development banks was development in Bangladesh in 1976AD. It provides banking services banking services to the poor people of rural areas. It also mobilizes small savings, provides credits to marginal farmers or people of suffered classes without tangible deposit.

Generally, it provides short term credits in income generating activities. Rural development bank in Nepal was introduced in 2049BS.There are five regional rural development banks in Nepal.     

AGRICULTURE

Agriculture is regarded as the primary sector of the Nepalese economy. It is the chief occupation of about 65.5% of the total working population of Nepal and contributes about 32.32% of GDP of Nepal. Major portion of Nepal export trade depends on agriculture. It is estimated that about 18%of the total land area of the country is under cultivation. Growth rate of agriculture is 4.9%.The irrigation facility is in Terai (80%) region followed by the Hills (15%) and Mountain (5%) regions.  75 % of the total holding the country are below one hectare and only 8%of holdings are above three hectares. The total area under food crops farming is estimated to be 76%. The cash crops occupy 24% of the total  area.

Agricultural productivity level in Nepal is far below compared to other developed countries. Low productivity has resulted because of inferiors seeds, traditional methods of farming, lack of irrigation  facilities, low of education, awareness, and lack of necessary information.

The importance of agriculture in the economics development of Nepal is very high. It is the primary sector of the economy providing the basic necessities for the existences of people.