Business Opportunities in Nepal

Nepal is a low-income developing nation: GDP (FY 2011/12): $19.15 billion; GDP growth rate (FY 2011/12): 3.96 percent; Population: 26.49 million (male 12.85 million, and female 13.64 million); per capita annual income: $735. More than 75 percent of the population is under the age of 40.Political deadlock, a landlocked location, challenging topography, poor infrastructure, a weak human capital base and a long history of public intervention in the economy are some of the impediments to economic growth.Agriculture accounts for 35 percent of GDP and 73.9 percent of employment. However, there has been significant migration from rural to urban areas and overseas. An estimated 22 percent of male and 1 percent of the female population is working abroad, primarily in the Gulf countries, and Asia. (Note: Official statistics do not count Nepalis working in India). Nepal received at least $4.42 billion in remittances in 2012, equivalent to nearly a quarter of GDP.India accounts for 65.1 percent of Nepal's total trade.In FY 2011/12, Nepal exported $919.98 million worth of goods, mainly woolen carpet, pulses, readymade garments, polyester yarn, textile, cashmere, metal and wooden handicraft items, zinc sheets, and agricultural products. Nepal's annual imports are about $5.68 billion, mainly from India, China, and the UAE. The main imports are petroleum products, gold, vehicles & spare parts, machinery & parts, medicine, crude soybean oil, telecommunication equipment & parts, and electrical goods.U.S.-Nepal bilateral trade is estimated at $118.10million in 2012, according to USITC figures. U.S. exports to Nepal were about $34.8 million. Total U.S. investment in Nepal is $86.53 million according to Government of Nepal fiscal year 2011-12 statistics.In FY 2011/12, the U.S. was the second-largest Nepali export market, accounting for 7.5 percent of total exports. US exports, on the other hand, made up only 1 percent of Nepal's total imports.Nepal traditionally runs large trade and current account deficits, which are offset by equally large service, transfer, and capital account surpluses. As of mid-April 2013, the gross convertible foreign exchange reserve of the banking sector stood at $5.46 billion, enough to finance merchandise imports for 10.6 months.