Foreign study costs outpace growth in Nepal’s service exports
Summary
Nepal's service trade deficit is widening due to rising costs of education abroad, outweighing gains from tourism and IT exports. The IT sector is growing rapidly, offering a chance to boost service exports and reduce the deficit.
Key Points
- Nepal's service trade deficit reached Rs90.94 billion in fiscal 2024-25, driven mainly by education service imports costing Rs138.48 billion.
- Education service exports remain minimal at Rs3.89 billion and grow slowly, while IT exports are expanding rapidly but underreported.
- The IT sector, including software development and digital freelancing, is growing annually by 15-20%, presenting opportunities to reduce trade deficits.
- Nepal’s service exports are diversifying into sectors like IT, construction, electricity, and tourism, aiming for a more sustainable export base as LDC status ends.
