Nepal is a founding member of the SASEC Program, joining with Bangladesh, Bhutan and India in 2001 to form this project-based partnership. The Maldives and Sri Lanka became full members of SASEC in May 2014, following several years as active Observers.

Nepal’s new constitution, proclaimed in 2015, paves the way for rapid and inclusive economic growth. The Thirteenth Plan 2013/14–2015/16 aims to decrease to 18% the number of people living below the poverty line. Nepal’s Vision 2030 is working toward graduation from its least developed country status by 2022, achieving the Sustainable Development Goals, and becoming a middle-income country by 2030.

SASEC Projects in Nepal

Since 2004, the Government of Nepal has approved 12 ADB-financed SASEC investment projects worth around $1.49 billion.

Nepal: SASEC Projects
Source: SASEC Project Portfolio, as of April 2018

Source: SASEC Project Portfolio, as of April 2018

In addition to the projects, ADB-financed technical assistance has supported SASEC investment projects in Nepal, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of 10 national technical assistance projects (cumulative worth $6.47 million) have assisted Nepal in project preparation, strategic planning, and capacity building.

Trade Snapshot

Direction of Intra-regional Trade

The value of Nepal's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2017, is captured in the tables below.

Nepal's top import source worldwide is India, with imported goods valued at over $6.3 billion.

India is Nepal's largest export market worldwide, with exports valued at $347 million. Bangladesh is its 11th top export market, with exports valued at $7 million.

Nepal Trade in SASEC Subregion

Source: IMF Direction of Trade Statistics, as of May 2018

Nepal Trade - Import

Source: IMF Direction of Trade Statistics, as of May 2018

Nepal Trade - Export

Source: IMF Direction of Trade Statistics, as of May 2018

Ease of Doing Business

In 2018, Nepal implemented the existing law on secured transactions, and required greater corporate transparency.

Source: Doing Business, as of April 2018

Note: The World Bank/International Finance Corporation's annual flagship Doing Business Report measures the ease of doing business by ranking economies from 1 to 189, based on quantitative indicator sets that can be compared across economies and over time, with first place being the best and indicating a regulatory environment is conducive to business operation. Of immediate relevance to SASEC aims and goals are indicator sets on Starting a Business, and Trading across Borders.

Logistics Performance Index (LPI)

Nepal’s LPI overall score for 2016 is 2.38, a drop from its 2014 score of 2.59 and below the South Asia average of 2.62. Since 2014, marginal improvement was registered only in the area of infrastructure, while all other areas experienced decline, most notably in Customs and logistics competence. The gains made in 2012-2014 (from the rank of 151 to 105), also recorded a drop to the rank of 124 out of 160 countries.

Nepal LPI 2016

Source: World Bank LPI

Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.

Nepal LPI 2007-2016

Source: World Bank LPI

Economic Outlook

Asian Development Outlook

Growth accelerated from a low base in fiscal year 2017 on a favorable monsoon, normalized trade flows, and an expansive fiscal policy. The outlook is for only moderate growth this year and next, given delayed project implementation and limited capacity in governments under a new federal structure. Weak remittances and export competitiveness will widen the current account deficit. Commercialized agriculture could raise farm productivity and boost farmers' income.

Source: Asian Development Outlook 2018 (ADB)
South Asia Regional Update

Nepal rebounded from the effects of earthquakes and trade disruption and reached 7.5% real GDP growth in 2016/17, owing to good monsoon, accommodative monetary policy, and rising government spending. Economic growth is projected to moderate to 5.0% and as activity begins to run up against capacity constraints.

Source: South Asia Regional Update, January 2018 (IMF)