KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is navigating a complex recovery phase marked by post-protest interventions, digital transformation, infrastructure developments, and persistent systemic challenges. The government’s relief package for businesses damaged during the Gen-Z protests reflects a strategic effort to stabilize the private sector and restore investor confidence ahead of Dashain.
Simultaneously, digital transactions are booming, though rising cyber threats reveal a critical need for regulatory and technological safeguards. Infrastructure updates—such as revised airfare caps, nearing completion of the Rahughat hydropower project, and ongoing hospital expansions—signal growth ambitions, yet bottlenecks like stranded hydropower equipment in Mustang and vulnerable highways during heavy rains expose persistent logistical and environmental vulnerabilities.
Meanwhile, shifts in consumer behavior—evident in the rise of online shopping and declining tourist arrivals—highlight how political instability and evolving digital habits are reshaping traditional economic patterns. Farmers’ demands for fair pricing further underscore deep-rooted structural gaps in rural markets. Together, these trends portray a country balancing modernization with urgent needs for systemic reform and resilience.
Govt announces aid package for businesses affected by Gen-Z protests
The government has introduced a relief package aimed at helping businesses recover from damage caused by arson and vandalism during the recent Gen-Z demonstrations. The measures include a 50% waiver on customs and excise duties for re-imported damaged goods, tax deductions on donations to relief funds, and the recognition of uninsured stock losses as deductible. Nepal Rastra Bank will extend repayment deadlines and offer low-interest loans (base rate +0.5%) with up to 80% financing for vehicle replacements. The Insurance Authority will release 50% of claim amounts based on preliminary assessments. Officials believe these steps will help stabilise businesses and boost investor confidence following the Dashain holiday season.
Nepal sees sharp rise in digital payments amid growing cyber threats
Nepal has witnessed a surge in digital financial transactions post-COVID, with widespread adoption of mobile banking, QR code payments, e-wallets, and card use. Data from Nepal Rastra Bank reveals that in Asar 2082 alone, e-commerce transactions hit Rs 1.46 billion, QR payments reached Rs 1.13 trillion, mobile banking accounted for Rs 5.3 trillion, digital wallets processed Rs 48.44 billion, and internet banking recorded Rs 25.33 billion. Daily QR payments now average Rs 3 billion, outpacing card usage. However, experts have raised concerns about system vulnerabilities, as cyber fraud losses exceed Rs 800 million. Authorities are planning public awareness programs, and the upcoming IT and Cybersecurity Bill aims to improve legal safeguards for Nepal’s expanding digital economy.
CAAN releases updated domestic airfare ceilings
The Civil Aviation Authority of Nepal (CAAN) has issued revised maximum fare limits for domestic flights to prevent overcharging. The Kathmandu–Dhangadhi route has the highest cap at Rs 17,579, followed by Kathmandu–Nepalgunj (Rs 13,103) and Kathmandu–Bhadrapur (Rs 12,112). Other notable fares include Kathmandu–Biratnagar (Rs 9,785), Kathmandu–Pokhara (Rs 6,635), Kathmandu–Bharatpur (Rs 4,643), and Kathmandu–Simara (Rs 3,978). CAAN has instructed airlines and ticketing agents to ensure prices do not exceed these ceilings.
Gen-Z unrest cuts tourist arrivals by 45% ahead of Dashain
The Gen-Z movement has significantly disrupted Nepal’s peak tourist season, causing a sharp drop in foreign visitors. The Nepal Tourism Board (NTB) reports that international arrivals in September were down 45% from the same time last year, plunging from 3,300 to around 1,600. Tour operators say major tourist spots are now nearly empty, even during what is traditionally a high-demand period. NTB CEO Deepak Raj Joshi noted the setback but expressed optimism that digital promotion and the “Nepal Now” campaign could aid recovery. While some tours have been postponed rather than canceled, hospitality businesses are bracing for steep losses during Dashain.
Online shopping grows in Nepal, but physical stores remain festival favourites
Online shopping is on the rise in Nepal, with consumers increasingly turning to e-commerce platforms and social media like Facebook, Instagram, TikTok, and WhatsApp to buy clothing, electronics, beauty products, and groceries. Many retailers now operate both online and offline, citing time savings and convenience as key benefits. However, during major festivals such as Dashain and Tihar, physical stores and malls remain highly popular. Shoppers prefer in-person visits to take advantage of bulk discounts and assess product quality firsthand. Retail analysts say digital shopping thrives for non-essentials, but trust and quality concerns keep essentials largely in the offline domain.
Rahughat hydropower project nears final phase after repeated delays
The 40-megawatt Rahughat Hydropower Project, developed by Raghuganga Hydropower under the Nepal Electricity Authority, is nearing completion, with 90% of construction finished. Indian contractor Jayprakash Associates is handling the Rs 8 billion civil works, which have faced multiple delays due to COVID-19, natural disasters, and supply issues. The current deadline is November 27, 2025. Project Manager Raj Bista confirmed that major civil structures, including tunnels and the powerhouse, are almost done, and equipment installation is underway. More than 500 workers are mobilised, even during the Dashain holidays. Electromechanical works by contractor BHEL are due for completion by December 31.
Nepal roads on alert as heavy rain threatens key routes
With heavy rainfall forecast from October 4 to 6, the Department of Roads has activated emergency teams along high-risk highways. Following advisories from the Department of Hydrology and Meteorology and the National Disaster Risk Reduction and Management Authority, road divisions have been ordered to prepare response plans. Key highways under close watch include Nagdhunga–Mugling, Mugling–Narayangadh, BP Highway, Kantipath, Tribhuvan Highway, and Daunne. Heavy machinery has been deployed to clear landslides within three hours of detection. District authorities have advised avoiding nighttime travel, and several roads may face temporary closures for safety.
Road blockage at Ghami Khola strands 18 Sino Hydro trucks in Mustang
Eighteen heavy trucks belonging to Sino Hydro Power Company are stuck at Nechung Customs Office in Mustang after crossing customs but being unable to proceed due to an incomplete diversion at Ghami Khola on the Jomsom–Korala road. Medium-sized trucks can pass using a temporary bridge, but the structure can’t support 10-wheelers. Chief District Officer Bishnu Prasad Bhusal said a permanent solution will be coordinated after Dashain. The 40-meter-span bridge, contracted in 2018 for Rs 6.8 crore, is still only 75% complete, hampered by delays and logistical challenges.
Norvic hospital expansion cost rises to Rs 36.7 billion
Norvic International Hospital and Medical College is scaling up its expansion project, increasing planned capacity from 200 to 300 beds. The total investment has risen to Rs 36.74 billion, up from the earlier Rs 23.75 billion estimate, due to design revisions and the inclusion of advanced medical equipment. As of July 2025, Rs 9.14 billion has already been spent. The facility, backed by Chaudhary Group (which holds a 51% stake via BLC Holdings), is expected to start operations by September 2026. In 2024, Norvic reported revenue of Rs 2.03 billion with an 8% net profit.
Bhojpur herb growers call for fair pricing and market access
Farmers in Bhojpur district have expressed frustration over low returns for their medicinal herb crops, including chiraito, satuwa, and cardamom. Without government-set prices or reliable market information, many rely on middlemen who dictate unfair rates. Local farmer Nima Sherpa said traders exploit the lack of awareness, while Pasang Sherpa noted that prices are often set based on rumors. Farmers are urging the government to set minimum prices and improve access to broader markets to prevent exploitation and make medicinal herb farming sustainable.
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