Nepal is a beneficiary of the EU's "Everything but Arms" (EBA) scheme for least developed countries. Nepal is considered a lower-middle income economy by the World Bank and the per-capita income currently stands at $ 1.340 (2022). Overall EU imports from Nepal have been decreasing in recent years and most recently stood at EUR 93,8 million. A high share of these imports are eligible for tariff suspensions granted by the EBA and Nepal currently takes good advantage of the preferences.

What is the EBA?

The “Everything but Arms”(EBA) scheme is a permanent arrangement covering Least Developed Countries (LDC’s) as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products (7200 products in total) originating in LDC’s except for arms and ammunition. Different from the Standard GSP and GSP+, LDC’s are not excluded from the scheme if they benefit from other preferential arrangements.

Nepal flag

At a glance: EBA beneficiaries' preferential imports to the EU


30,55 M


Federal Parliamentary Republic




GDP Growth





$ 40,83 B


Facts about Nepal's economy

Landlocked Economy

Located in South Asia, Nepal is a landlocked country bordering the powerful economies of China and India. The country is covered by the Himalayas and is home to eight of the world’s ten highest mountains.

Export Products

Nepal's most important export products are palm oil and soy-bean oil, carpets, non-alcoholic beverages, articles of plastic as well as yarn and woven fabrics.

Trade Partners

Nepal is highly dependent on India as a trading partner. The neighbouring country accounts for more than 65% of overall trade, leaving Nepal vulnerable to fluctuations in the Indian economy.

Economic Structure

Agriculture is the mainstay of the Nepalese economy, employs the large majority of the workforce and accounts for a large share of exports. The main commodities include rice, corn, and wheat. Small scale industries mainly focus on the processing of agricultural commodities and process jute, sugar, and rice. Furthermore, Nepal largely depends on the inflow of remittances which amounted to about 23.1 % in 2022.

Cardamom Production

With an annual production between 5000 and 6000 metric tonnes, Nepal is on the list of the world’s leading producers and exporters of cardamom.

Trade with the EU

Total trade with the EU amounted to € 301 million in 2022. With 2.3% of overall trade, the EU only plays a minor role in Nepal's overall trade relations. Nonetheless, it ranks third as an export market with about 6.6% of Nepalese products being exported to Europe.

Nepal and the EU (2022)

Imports from Nepal by product section

Imports from Nepal over time (in € m)


Economic Impact


The large majority of Nepal's exports to the European market are eligible for EBA preferences.


With a preference utilisation rate of almost 87%, Nepal makes considerable use of EBA preferences.

Preference utilisation and export diversification

Nepal's imports to the EU

Preference Utilisation vs. total eligible imports

Nepal makes consistently high use of the free access to the EU market granted under the EBA: until 2020, the preference utilisation rate was always above 90% despite fluctuations in eligible imports, and stood at 87% in 2022. Imports have been increasing since 2020. The most prominent export products, textiles and clothing, use EBA preferences for 90% of eligible tariff lines.

The largest product sections under EBA

Imports from Nepal predominantly come from the textile and apparel sector, which accounts for about 84% of total imports under the EBA. Exports of headgear, leather articles and manufacturers are also imported under the EBA, but only account for small shares.


The preferential access to the EU market granted by the EBA scheme is not bound to the ratification of international conventions. Nepal upholds a very high level of ratification and has ratified 14 out of 15 core conventions on the protection of human and labour rights. Furthermore, Nepal has ratified 7 environmental protection conventions and is a signatory of the Cartagena Protocol. The country has also ratified 4 conventions on good governance.

Core international conventions on human rights and labour standards


  • Convention on the Prevention and Punishment of the Crime of Genocide (1948)
  • International Convention on the Elimination of All Forms of Racial Discrimination (1969)
  • International Covenant on Civil and Political Rights (1976)
  • International Covenant on Economic Social and Cultural Rights (1976)
  • Convention on the Elimination of All Forms of Discrimination Against Women (1981)
  • Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
  • Convention on the Rights of the Child (1990)
  • Convention concerning Forced or Compulsory Labour, No 29 (1930)
  • Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
  • Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
  • Convention concerning the Abolition of Forced Labour, No 105 (1957)
  • Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
  • Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
  • Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Not Ratified

  • Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)

Additional Conventions

  • Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
  • Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
  • Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
  • Convention on Biological Diversity (1992)
  • The United Nations Framework Convention on Climate Change (1992)
  • Cartagena Protocol on Biosafety (2000) (signed)
  • Stockholm Convention on persistent Organic Pollutants (2001)
  • Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
  • United Nations Single Convention on Narcotic Drugs (1961)
  • United Nations Convention on Psychotropic Substances (1971)
  • United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
  • United Nations Convention against Corruption (2004)

EU-Nepal Bilateral Development Assistance


Access all info about EU-Nepal relations on the International Partnerships website:

Opportunities in Nepal

  • Nepal has great river systems which offer considerable potential for the generation of hydropower. With India's increasing demand of electricity, an immense export market would be located in close proximity.
  • Government strongly focusses on the development and improvement of infrastructure, including transport and energy infrastructure
  • Young population and rising middle-class will likely increase domestic demand and open up opportunities for new markets
  • Strategic location in between India and China