Kathmandu, July 20 -- Every year, thousands of Nepali students leave the country for higher education, taking billions of rupees in foreign exchange out of Nepal. Their educational expenses have become the single largest driver of Nepal's widening service trade deficit, overshadowing gains from tourism and the country's fast-growing information technology (IT) exports, according to the government's latest trade report.

Nepal recorded a service trade surplus of Rs9.85 billion in the fiscal year 2015-16, exporting services worth Rs136.47 billion while importing Rs128.62 billion. Less than a decade later, the situation has reversed dramatically.

By the fiscal year 2024-25, service exports had risen to Rs238.66 billion, but service imports ...