KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s stock market has faced a second consecutive week of declines, leading to a loss of Rs 111 billion in investor wealth.
The market’s downturn, coupled with reduced trading volume, indicates a negative sentiment, particularly in the finance sector. Despite easing selling pressures, technical indicators suggest further potential declines.
In other news, the Public Accounts Committee is addressing 48 complaints through newly formed subcommittees, while the government is also focusing on economic self-reliance through initiatives such as boosting domestic production and reducing garlic imports from China.
The government is actively promoting infrastructure development, including the completion of power transmission lines, as well as launching a $5 million sustainable tourism project to create jobs and support local communities.
Additionally, regulatory changes are underway in the liquor and tobacco sectors to dismantle monopolies, and the government is working on policies to address water shortages and strengthen Nepal’s economy.
Stock Market Declines for Second Week, Investors Lose Rs 111 Billion
Nepal’s stock market has experienced a second consecutive week of declines, closing at 2,669.31 points, down 67.17 points from the previous week.
The trading volume also decreased to Rs 26.29 billion, and market capitalization dropped to Rs 4.432 trillion, erasing Rs 111 billion in investor wealth.
Technical indicators suggest the market is approaching an oversold zone, signaling further potential declines. The finance sector bore the brunt of the losses, while all sectors except trade closed in the red. Despite easing selling pressure, the market sentiment remains negative.
Public Accounts Committee forms subcommittees to address 48 complaints
The Public Accounts Committee (PAC) of the House of Representatives has established seven subcommittees to investigate 48 complaints related to various ministries and government departments. Committee member Sanjay Gautam proposed the creation of these subcommittees.
His committee will also review 16 additional complaints. The investigations will cover sectors such as aviation, energy, telecom, finance, cooperatives, foreign employment, health, and corruption at Pokhara and Bhairahawa airports.
Different lawmakers, including Lekanath Dahal, Prem Ale, Manish Jha, Gokul Baskota, and Tara Lama, will lead the subcommittees. The airport corruption subcommittee is required to submit its report within 15 days.
Gold and Silver Prices Fall in Nepali Market
Gold and silver prices have dropped in Nepal’s domestic market. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold is trading at Rs 175,000 per tola (11.66 grams), down from Rs 176,000 the previous day.
Similarly, silver prices have decreased by Rs 35 per tola, now priced at Rs 1,995 per tola. The global price of gold stands at $3,027 per ounce today, with price fluctuations influenced by global market trends and economic factors.
PM Oli Calls for Increased Domestic Production and Consumption
Prime Minister KP Sharma Oli has emphasized the importance of boosting domestic production and encouraging the consumption of locally made products as part of Nepal’s goal for economic self-reliance.
Speaking at the third national convention of the Nepal Industry and Business Federation on Friday, he urged citizens to favor local products over imports. He remarked, “Using our own toothbrush and toothpaste every morning would be a source of pride.”
Industry Minister Damodar Bhandari also addressed Nepal’s low export figures amidst growing global competition, mentioning that the government has amended several economic laws to enhance the country’s industrial environment.
Dhalkebar-Bara Transmission Line Completed
The completion of the Dhalkevar-Bara section of the Hetauda-Dhalkevar-Inaruwa 400 kV transmission line has improved Nepal’s power transmission capacity and facilitated greater electricity trade with India.
Spanning 100 km through Madhesh Province to Saraswati Danda in Makwanpur, this line adds to the already operational Dhalkevar-Inaruwa section, which is 154 km long. Kulman Ghising, Executive Director of the Nepal Electricity Authority (NEA), inaugurated the temporary 132 kV charge of the 400 kV line to ease the westward flow of electricity and ensure power imports from India during winter shortages.
The upgrade to the Hetauda-Dhalkevar line will increase capacity from 200 MW to 400 MW, benefiting both domestic supply and exports.
Govt to Issue 45 New Licenses for Liquor and Tobacco Sectors
The Ministry of Industry is preparing to issue new licenses for the liquor and tobacco industries, a move that has been delayed for years due to monopolies that hindered competition.
These monopolies have long controlled the market, blocking new players from entering. The government is now set to release 45 new licenses for distilleries, microbreweries, and tobacco production, with some investors planning to acquire multiple licenses.
The Industrial Promotion Board, led by the Industry Minister, will make the final decision. Preparations are underway to dismantle the monopoly and promote a competitive market.
FNCCI Urges Policy Reforms and Investment Support for Fiscal Year 2025/26
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has called on the government to introduce policy reforms, enhance investment opportunities, and streamline business services in the upcoming fiscal year’s policies and programs.
FNCCI President Chandra Prasad Dhakal presented key recommendations to Industry Minister Damodar Bhandari, which included integrating business services into the Nagarik App, restructuring investment bodies, and improving credit access.
The FNCCI also proposed lower taxes, better export facilities, and strategies to attract foreign investment, suggesting the use of Nepal’s Rs 600 billion banking capital to boost manufacturing, agriculture, and tourism, particularly in towns near the Indian border.
Labour Department Warns Against Hiring from Unlicensed Labour Suppliers
The Department of Labour and Occupational Safety has cautioned institutions against hiring workers from unlicensed labour suppliers, citing violations of the Labour Act.
Director General Kamal Prasad Bhattarai stressed that government agencies, public institutions, and private entities must only engage licensed labour suppliers.
The department outlined six key legal provisions, including enforcing minimum wage laws, conducting labour audits, preventing child labour, and ensuring occupational safety.
Government Mandates Social Media Platforms to Register in Nepal
The Nepal government has enforced new regulations requiring social media platforms like Facebook, Instagram, and X (formerly Twitter) to register within a month or face potential bans.
The Ministry of Communications and Information Technology issued the directive due to concerns over misuse, misinformation, tax evasion, and data security.
Experts acknowledge the necessity of regulation but warn of the technical and diplomatic challenges involved in enforcing compliance. The government has indicated that this could be the final warning before implementing restrictive actions.
Nepal Tourism Board and UNDP Launch $5 Million Sustainable Tourism Initiative
The Nepal Tourism Board (NTB) and UNDP-Nepal have launched a $5 million Sustainable Tourism Project (STP), aimed at creating jobs and promoting tourism development.
The project, which will run from 2025 to 2028, is expected to generate 2,500 sustainable jobs and provide skill training for 5,000 individuals. The initiative will focus on enhancing tourism infrastructure, digitization, and local livelihoods.
The NTB and UNDP will contribute $1.5 million each, with an additional $2 million mobilized jointly.
The project aligns with Nepal’s Tourism Decade (2023–2032) goal of attracting 3.5 million visitors annually by 2032, positioning Nepal as a sustainable global tourism destination.
Nepal Cuts Garlic Imports from China to Combat Smuggling Issues
Nepal has drastically reduced its garlic imports from China following stricter regulations aimed at curbing smuggling into India.
Imports have dropped from 16,798 metric tons during November-December to just 349 tons by mid-March, with no shipments arriving at major border points like Tatopani since January.
Authorities implemented tighter checks after detecting large-scale smuggling, coinciding with a surge in garlic prices in India.
Banks Strengthen Environmental and Social Risk Assessments in Loan Disbursement
Nepal’s banks are increasingly integrating environmental and social risk assessments into their loan disbursement processes. According to Nepal Rastra Bank (NRB), 33% of loans in FY 2023/24 underwent such evaluations, up from 14% the previous year.
Rastriya Banijya Bank led with over 90% compliance, while NIC Asia Bank has not yet adopted the practice. While these assessments are not mandatory, banks are aligning with global standards.
NRB’s 2022 directive requires assessments for loans exceeding Rs 10 million, and banks must ensure compliance with Environmental Impact Assessment (EIA) requirements.
Human Rights Groups Urge Dialogue to Resolve Pathibhara Cable Car Dispute
Five human rights organizations, including Amnesty International Nepal and INSEC, have called for all parties involved in the Pathibhara cable car project to resolve the dispute through dialogue.
The ongoing tensions surrounding the 2.5 km cable car project in Taplejung have raised human rights concerns. The organizations have urged the government, investors, and local communities to work towards a peaceful resolution.
They also criticized the excessive use of force by authorities and violent protests by the “No Cable Car” group, calling for lawful and proportionate responses.
MA Power to Invest Rs. 20.25 Billion in 90MW Marsyangdi Hydropower Project
MA Power Pvt. Ltd. is set to invest Rs. 20.25 billion in a 90MW hydropower project on the Marsyangdi River, spanning Tanahun, Lamjung, and Gorkha districts.
The project, which is awaiting final environmental approval, will take five years to complete and aims to begin commercial operations upon its conclusion.
The semi-reservoir project is expected to generate 548.95 GWh annually, with the electricity being integrated into the national grid through a 220 kV transmission line to the NEA’s Markichowk substation.
Govt to Provide Free Heart Attack Medicines at Three Major Hospitals
The Ministry of Health and Population (MoHP) has announced the provision of free heart attack medications at three major hospitals: Tribhuvan University Teaching Hospital, Bir Hospital, and Bharatpur Teaching Hospital. Health Minister Pradip Paudel emphasized the high cost of heart medications (Rs 200,000), which many people cannot afford, leading to preventable deaths.
The Burn Heart Worldwide organization donated the first batch of medicines, and the government plans to procure more as needed. This initiative aims to save lives and provide affordable emergency care to citizens.
Govt Plans Large Reservoir-Based Drinking Water Projects to Tackle Water Crisis
Minister for Water Supply Pradeep Yadav announced that feasibility studies are underway for large reservoir-based drinking water projects to address Nepal’s water crisis.
He mentioned plans to divert the Sunkoshi and Raptikhola rivers and implement deep boring projects in the Terai, where groundwater levels are declining.
The ministry aims to start 280 new drinking water projects in the next fiscal year, with 38 projects in the Terai-Madhes region already in progress. The ministry is also collaborating with ICIMOD to conserve water sources and install chlorination units to ensure safe drinking water across the country.
Insurance Sector Transparency and Regulation Are Key Priorities: Chairman Ojha
Sharad Ojha, Chairman of the Nepal Insurance Authority, stated that improving regulation and ensuring transparency in the insurance sector are top priorities.
Speaking at a special convention organized by the Employees’ Union, Ojha committed to addressing sectoral issues. Executive Director Sushil Dev Subedi stressed the importance of coordination between the union and management.
The convention also called for insurance companies to allocate 2% of their profits for employee development and suggested appointing external CEOs in merged companies to ensure fair employment practices.
Government Will Ensure Equal Opportunities for All Entrepreneurs: Khatiwada
Economic Advisor to the Prime Minister, Dr. Yubaraj Khatiwada, assured that the government will provide equal business opportunities to all entrepreneurs.
Speaking at the third convention of the Nepal Federation of Industries and Businesses, he stressed that no policies will favor specific business groups and assured that the government will not intimidate businesses.
He encouraged industrialists to address energy challenges while pressing the government to effectively fulfill its responsibilities.
Govt Focused on Strengthening the Economy
Minister for Industry, Commerce, and Supplies Damodar Bhandari stated that the government is working on import substitution and promoting exports to strengthen Nepal’s economy.
He mentioned that over a dozen economic laws have been amended to support industrial growth and highlighted the approval of the National Startup Policy 2081, along with the Startup Loan Program, aimed at fostering entrepreneurship and job creation.
Lumbini Set to Become a Global Hub for Peace Tourism: Minister Pandey
Minister for Culture, Tourism, and Civil Aviation Badri Prasad Pandey highlighted Lumbini as the center of world peace tourism and a spiritual destination for Buddhists and peace seekers.
At the Second Lumbini International Peace and Meditation Festival, he reaffirmed Nepal’s commitment to preserving Lumbini and boosting cultural, spiritual, and adventure tourism.
He called for swift implementation of recent tourism agreements with Thailand and Cambodia. Chinese Ambassador Chen Song emphasized China’s role in strengthening ties through the Lumbini International Peace Conference.
Chief Secretary Directs Urgent Action to Remove Nepal from FATF Grey List
Chief Secretary Ek Narayan Aryal has instructed department heads to take immediate steps to remove Nepal from the FATF Grey List.
During a meeting, he emphasized the importance of thorough investigations and prosecutions of financial crimes, urging officials to act promptly without delays or excuses.
He also directed the completion of the National ID integration and the digitization of key government services, including passports, taxes, vehicle registration, and pension verification, to improve governance.
Low Wages Driving Nepalese Workers to Seek Jobs Abroad: Labour Department Chief
Director General of the Department of Labour and Occupational Safety, Kamal Raj Bhattarai, stated that low wages are prompting many Nepalese workers to look for employment abroad. He stressed the need for strict enforcement of minimum wage laws to ensure fair livelihoods for workers.
The government recently hosted the National Labour and Employment Conference and declared 2081-92 as the National Employment Decade to address the country’s labour challenges.
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