Imports of all commodities have dropped, but gold imports have risen beyond expectations in the first four months of the fiscal year, according to the Trade and Export Promotion Centre.

Nepal’s gold imports zoomed 233 percent to Rs4.7 billion between mid-July and mid-October. In the last fiscal year, the country had imported Rs8.49 billion worth of the yellow metal.

Traders attributed the sharp rise in gold shipments to increased demand during the festival season and reduced customs duty that came into effect at the beginning of the fiscal year.

“After the April 25 earthquake, demand for gold plunged and stayed down for two and a half months. Presently, there has been a rebound in the market,” said Mani Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers Association (Fenegosida).

He added that a cut in customs duty was the major reason behind the surge in imports. “In addition, demand goes up during the festival season.” Shakya said that smuggling had gone down to some extent after the import duty was slashed because the difference in prices of gold sold by banks and contraband gold had been reduced.

The government had decreased the customs duty by Rs1,000 per tola from Rs5,200 before through the budget statement.

Silver imports, however, plunged 71.3 percent in the first four months of the fiscal year. Nepal imported silver worth Rs3.08 billion during the review period, down from Rs10.73 billion year on year. In fiscal 2014-15, silver imports stood at Rs24.7 billion.

Shakya said that a drop in shipments of silver handicrafts and jewellery was part of the reason for the sharp decrease in imports. Nepal’s silver handicrafts are in high demand in the international market, but exports came to a halt due to India’s unofficial trade embargo.

Handicraft makers said that they had not been able to produce silver handicrafts in adequate quantities due to a scarcity of fuel and raw materials. Exports of silver handicrafts plunged 45 percent to Rs3.32 million in the first four months of 2015-16.