Nepal’s transition from a largely self-sufficient agrarian economy to a food-import-dependent nation has accelerated dramatically over the past decade. Recent data suggest that this dependency has reached unprecedented levels. Nepal’s annual food import bill has averaged around Rs 300 billion in recent years, accounting for roughly 18 per cent of total merchandise imports. Agricultural imports surged to approximately NPR 360 billion in fiscal year 2024/25, reflecting a steep upward trajectory. This import bill would go even higher if the informal imports of food from the southern border points were also included. On the other hand, exports have been negligible. These figures underscore a widening structural imbalance between domestic production and consumption.

This trend builds upon earlier patterns identified by a 2021 study undertaken by the author and his colleagues, which showed that Nepal’s food imports increased sharply in the 2010s, driven by political economy shifts, migration, and market integration. However, what makes the current moment particularly critical is not just the scale of dependency, but the changing global context in which it is embedded. Nepal is now exposed to a volatile geopolitical environment that threatens both the availability and affordability of food.

Global geopolitics and the ‘double whammy’ effect

The current geopolitical situation—especially the conflicts in West Asia and the lingering impacts of the Russia–Ukraine war—poses a dual threat to Nepal’s food system. This can be understood as a ‘double whammy’: simultaneous supply-side disruptions and demand-side constraints.

i) Supply-side shock: Rising costs and disrupted supply chains

Conflicts in West Asia, a critical hub for global energy supply, have driven up international oil prices. For Nepal, which is entirely dependent on imported fuel, this translates directly into higher transportation costs and increased agricultural production expenses. At the same time, global fertiliser markets have been severely disrupted. Nepal imports most of its chemical fertilisers, and price volatility or supply shortages can significantly reduce domestic agricultural productivity.

These pressures are compounded by protectionist policies among major food-exporting countries. India, Nepal’s primary supplier, has repeatedly imposed export restrictions on key commodities such as rice, wheat, and sugar in order to stabilise domestic markets. Such measures have immediate spillover effects on Nepal, given its open border and deep trade integration with India. China, too, has shown increasing caution in food exports under global uncertainty. Poor households remain particularly vulnerable, spending between 60 and 67 per cent of their income on food. High tariffs (ranging between 18 and 29 per cent) imposed by India on key nutritional food items like eggs, dairy products, meat and fish, pulses, vegetables, fruits, and nuts are further straining household budgets.

The overall result is a tightening of supply chains at precisely the moment when Nepal’s dependence on imports is at its peak.

ii) Demand-side shock: Declining remittance capacity

Nepal’s economy is heavily reliant on remittance inflows, reaching over USD 14.2 billion in 2024, which is equivalent to 26.6 per cent of the national GDP. A substantial portion of these remittances is contributed by migrant workers in the Gulf. Geopolitical instability in this region—whether through conflict, economic slowdown, or labour market disruptions—could reduce employment opportunities and income for Nepali workers abroad. Any decline in remittances would directly affect household purchasing power, particularly in urban areas where food consumption is almost entirely market based. This creates a dangerous feedback loop: food prices rise due to global supply shocks, while household incomes fall due to declining remittances. Together, these forces significantly increase the risk of widespread food insecurity.

Structural roots of vulnerability

While global shocks may trigger a crisis, Nepal’s vulnerability is rooted in long-term structural transformations. As highlighted in the research mentioned above, four inter-related factors have driven Nepal’s shift toward food-import dependency.

First, economic liberalisation since the 1990s has reoriented agriculture toward market dependency. Subsistence farming systems, once the backbone of food security, were increasingly marginalised in favour of market-driven production models. However, Nepal lacked the infrastructure, subsidies, and institutional support necessary to compete with larger agricultural economies.

Second, regional geopolitics—particularly Nepal’s integration with India’s market system—has reinforced dependency. India’s Green Revolution-led and subsidy-driven productivity gains enabled it to supply food at lower costs, undercutting Nepali farmers and discouraging domestic production.

Third, large-scale labour migration has reshaped the rural economy. With millions of working-age individuals employed abroad, agriculture has suffered from labour shortages, leading to land abandonment and declining productivity.

Finally, socio-cultural changes have altered consumption patterns. Traditional crops such as millet, barley, and buckwheat have been replaced by imported staples like rice and wheat, further entrenching dependence on external markets.

These structural shifts mean that Nepal no longer possesses the internal resilience it once had to absorb external shocks.

Crisis scenarios: Food insecurity in an age of uncertainty

Given the convergence of global and domestic vulnerabilities, Nepal faces several plausible crisis scenarios.

Urban areas are likely to be the most immediately affected. With limited local production and high dependence on market supply, disruptions in imports could lead to rapid price inflation and shortages. Food products already constitute a significant share of imports, and any supply constraint would quickly translate into scarcity.

Rural areas, while relatively better positioned in terms of subsistence production, are increasingly dependent on external inputs such as fertilisers and seeds. A disruption in these inputs could reduce yields, undermining even local food availability.

At the macroeconomic level, rising food and fuel prices could contribute to inflationary pressures, eroding real incomes and increasing poverty. Historical experiences from the 2008 global food crisis show that import-dependent countries are particularly vulnerable to such shocks, often experiencing social unrest and political instability.

Nepal’s own experience during the 2015 border blockade offers a stark warning. Disruptions in fuel and essential goods supply caused widespread hardship, especially in urban areas like Kathmandu. Such a blockade was also imposed in 1989–90, but its effects were not felt as severely since Nepal was largely food sufficient then and the demand for petroleum products was not high at that time. Today, with far greater dependence on imports, including petroleum, the consequences of a similar disruption would likely be much more severe.

Policy imperatives: Building resilience in an uncertain world

The emerging crisis demands a comprehensive and forward-looking policy response. The challenge is not merely to manage short-term risks, but to address the structural problems that have made Nepal vulnerable in the first place.

First, there is an urgent need to revitalise domestic food production. This requires sustained investment in irrigation, rural infrastructure, research, and extension services. Policies must be tailored to integrate Nepal’s diverse agro-ecological zones, promoting crops that are both resilient and nutritionally valuable. It should be remembered that agricultural production has a higher level of multiplier impacts in society, and it also generates more employment.

Second, Nepal must establish strategic food reserves to buffer against supply disruptions. Given the scale of current imports, maintaining reserves equivalent to several months of consumption would provide critical insurance against external shocks.

Third, reducing dependency on imported agricultural inputs is essential. This includes promoting organic fertiliser, strengthening local seed systems, and investing in sustainable farming practices that reduce reliance on global supply chains.

Fourth, policies should aim to re-engage youth in agriculture by making it economically viable, technologically modern, and socially respectable. Without addressing labour shortages, efforts to increase production will remain limited.

Fifth, Nepal must adopt a more proactive approach to economic diplomacy. Diversifying import sources and negotiating long-term supply agreements with neighbouring countries can reduce exposure to unilateral export restrictions.

Finally, there is a need to integrate the concept of food sovereignty into national policy frameworks. In this context, food systems should prioritise local production, ecological sustainability, and cultural appropriateness, rather than relying solely on global market efficiency.

In sum, it is important to understand that Nepal’s growing dependence on food imports has created a fragile system that is highly susceptible to external shocks. The current geopolitical environment—characterised by energy crises, supply chain disruptions, and regional conflicts—has exposed the depth of this vulnerability.

The emerging ‘double whammy’ of rising food prices and declining remittance capacity presents a particularly serious threat for Nepal. It affects both the supply of food and the ability of households to access it, increasing the risk of a systemic food crisis.

Yet, this moment also offers an opportunity. By recognising the structural roots of its vulnerability and adopting a comprehensive policy response, Nepal can begin to rebuild a more resilient and self-reliant food system. The stakes are high: food security is not merely an economic concern, but a fundamental pillar of national stability and sovereignty.