Nepal’s reliance on food imports, particularly from India, has continued to increase sharply in recent years, raising concerns among experts about the country’s food security and agricultural sustainability. In the past fiscal year, Nepal’s food import bill reached Rs434.26 billion, driven by factors including rising consumer demand, increased purchasing power fueled by remittances, and a growing gap between domestic agricultural production and consumption.
After a temporary slowdown during the COVID-19 pandemic, when India imposed export restrictions on key food commodities, imports began climbing again as New Delhi eased some of these controls. India, the world’s largest rice exporter, has intermittently restricted exports of staples such as rice, wheat, sugar, and onions to protect its domestic supply, especially given concerns about erratic weather patterns linked to El Niño and global disruptions stemming from the Russia-Ukraine conflict. These export curbs have directly affected Nepal, which depends heavily on India for food imports.
Rice prices in Nepal, for example, rose significantly—by as much as Rs800 per 25-kilogram bag between April 2023 and April 2024—due largely to restrictions on non-basmati white rice exports imposed by India beginning in July 2023. Experts warn that this increasing dependence on imported food commodities represents a serious challenge for Nepal, a country with a long-standing agricultural tradition.
Agricultural specialists highlight several structural issues contributing to this dependence. Nepal’s agricultural workforce is shrinking as many laborers migrate abroad for work, weakening domestic production capacity. In addition, insufficient irrigation infrastructure, shortages of chemical fertilizers, and limited investment in mechanization and technology have left farming less profitable, prompting many farmers to abandon agricultural pursuits.
The Nepal-India Trade Treaty facilitates imports by allowing zero reciprocal tariffs on most agricultural products and a low 9 percent agriculture reform fee on rice, combined with India’s substantial farm subsidies. This trade arrangement makes imported food cheaper than domestically produced alternatives, incentivizing higher imports.
Moreover, Nepal has increasingly engaged in the re-export of edible oils to India. While Nepal imports crude edible oils—mainly from third countries—it refines and exports processed oil to India, capitalizing on tariff differentials. This trade, valued at Rs168.26 billion in crude oil imports and Rs146 billion in refined exports during the last fiscal year, has raised concerns about its limited contribution to Nepal’s domestic value addition and the potential impact on Indian vegetable oil producers.
Other major imported food categories in Nepal include cereals, seeds, vegetables, fruits, dairy products, oil cakes used for livestock feed, spices, and maize. The growing reliance on imported hybrid seeds is also noted as a potential vulnerability.
Experts emphasize that Nepal’s food security depends on strengthening domestic agricultural production and reducing this heavy reliance on imports. They call for increased investment in irrigation, fertilizer availability, technology, and policies to make farming a sustainable and profitable livelihood. The country faces additional challenges from global factors, including ongoing fertilizer shortages and climate variability, which could further disrupt food production.
Analysts also warn that geopolitical risks, particularly the potential for further export controls by India or disruptions linked to conflicts in West Asia affecting remittances from migrant workers, could exacerbate Nepal’s food security challenges. Without strategic efforts to boost self-reliance in food production, Nepal risks becoming increasingly vulnerable to external shocks in an already fragile economic and institutional environment.