Trade and Economic Relations

Trade and Economic Relations

Notorious political events of recent years have had a dramatic impact on volume of Nepal – Russia trade and economic exchanges. Nevertheless, there are certain opportunities to revitalize bilateral trade and economic relations both on intergovernmental and commercial levels.

In the 70-s, with bilateral trade and economic cooperation rapidly growing, the Soviet Union seemed to be the only actor on international arena to have greatly contributed to building Nepal’s key infrastructure facilities which are still in active use. Most of them are situated in Terai and comprise a cigarette and match factories, a cement and turpentine works, five bridges and highways with a total length exceeding 100 km. Soviet technical expertise performed their construction free of charge. Nepalese businessmen (mainly, the graduates from Russian and Soviet universities) established the Nepal-Russia Chamber of Commerce and Industry and the Nepalese Businessmen's Association in the CIS countries.

The post-Soviet period saw a major transformation of Russia's foreign economic policy (emerging as the legal successor of the former USSR) with pragmatism and mutual advantages as its  new guiding principles in relations with its partners abroad, particularly those among the developing and the least developed countries including Nepal.

Nepal - Russia trade volume in fiscal years 2008/2009 has slightly outperformed the one of previous year and reached 15,645 million US dollars. The volume of Nepalese exports to Russia amounted to 755 700 US dollars (in comparison with $352 000 in FY 2007/2008) with the following leading export items : cottonware (jackets) – $285 800, handcraft including pictures and illustrations-$150 100, carpets – $123 400, woolen shawls – $24 200. Nepal's import from Russia for the past financial year reached 14,9 million US dollars, leaving copper wire and its derivatives ($4,9 million), replacement parts for light civil aircraft ($5,7 million), news print ($1,5 million) and spare parts for helicopters ($767 000) the leading import items.

According to the Nepalese counterparts, reestablishment of direct air link between Russia and Nepal could facilitate expanding bilateral trade and economic cooperation.