Food Imports Surge, Nepal Faces Growing Dependency Beyond Fuel

Nepal's reliance on imported food is escalating, with the nation's food import bill reaching Rs434.26 billion in the past fiscal year. This surge, fueled by rising consumer demand, remittance-driven purchasing power, and a growing gap between domestic production and consumption, has experts warning that food is rapidly becoming Nepal's second major external dependency after petroleum products.

Food imports had briefly slowed due to the COVID-19 pandemic and India's export restrictions on certain commodities. However, as New Delhi eased restrictions on staples like rice, imports have climbed again. This trend is further compounded by record remittance inflows and the continued outflow of Nepali migrant workers, which weakens the domestic agricultural workforce. Nepal's re-export of edible oils to India, capitalizing on tariff differentials, also amplifies this dependency.

India's intermittent bans on essential commodities like wheat, rice, and sugar, implemented to safeguard domestic supplies, have directly impacted Nepal's import patterns. The agricultural import bill has seen dramatic growth, from Rs44.43 billion in fiscal year 2009-10 to Rs250 billion in 2019-20, and ballooning to Rs400 billion by 2021-22. Experts have labeled this increasing dependence on imported food a national emergency for a country that should be a producer.

Nahendra Khadka, national coordinator of the National Peasants Coalition Nepal, highlighted that rising disposable incomes have boosted food consumption, leading to a sharp increase in imports. He stated, "Like petroleum products, we are now almost entirely dependent on imported food. This is a serious challenge for a country like Nepal." Khadka also noted that Nepal is particularly vulnerable to India's export restrictions due to its heavy reliance on imports from its southern neighbor.

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Like petroleum products, we are now almost entirely dependent on imported food. This is a serious challenge for a country like Nepal.