KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape reflects a mix of cautious optimism and persistent structural challenges. The NEPSE index showed a modest recovery after a week-long decline, though trading volume dipped, indicating underlying market uncertainty.
Meanwhile, commodity trends remained stable, with gold prices steady and silver showing a minor uptick. The government is actively working to liberalize key sectors—particularly power—by drafting new electricity trade guidelines and revising the controversial ‘Take and Pay’ provision, though these efforts have triggered resistance from energy entrepreneurs and coincided with banks breaching hydropower lending limits.
While export success stories like dog chews highlight Nepal’s growing niche in international markets, domestic industrial stagnation is evident in areas like Salyan, where dozens of businesses have closed. Infrastructure and energy projects such as the Chimkhola–Rahughat hydropower and Amlekhgunj–Lothar pipeline are making headway, reflecting progress in long-term investment.
On the fiscal side, Pokhara’s increased budget and Mechi Customs’ near-target revenue performance suggest stable governance at local levels. However, delays in insurance payouts, incomplete industrial village projects, and criticism of legislative efforts like the cyber security bill reveal gaps in implementation and institutional effectiveness.
Private sector initiatives, such as eSewa’s digital remittance partnership and new IPOs, offer promising avenues for inclusive growth and modernization.
NEPSE index climbs 4 points after week-long slump
The Nepal Stock Exchange (NEPSE) index rose by 4.78 points on Monday, breaking a downward trend that had persisted since last Tuesday. The index opened at 2595.97 and closed at 2600.76. Despite the gain, overall trading volume saw a decline. The Sensitive Index also showed modest improvement.
Gold price steady, silver rises by Rs 10 per tola
Gold prices remained unchanged at Rs 195,200 per tola on Monday, while silver prices rose by Rs 10 to reach Rs 2,170 per tola, according to the Federation of Nepal Gold and Silver Dealers’ Association.
New power trade guidelines to open sector to private players after 30 years
The government is finalizing electricity trade guidelines nearly three decades after the Electricity Act was passed. Once approved, the new rules will enable not only the Nepal Electricity Authority but also private energy companies and large consumers to use transmission lines for trading power.
Banks push for relaxed provisioning rules amid shrinking profits
Banks in Nepal are urging regulatory changes in provisioning requirements, blaming current rigid rules for falling profits. Financial institutions are advocating for a model similar to those in India and Bangladesh to better manage risk while preserving profitability.
Energy minister promises revision of ‘take and pay’ policy
Energy, Water Resources and Irrigation Minister Deepak Khadka announced in Parliament that the government will revise the controversial ‘Take and Pay’ provision in the national budget. He confirmed that a formal request for revision had been sent to the Ministry of Finance on Jestha 27 (June 10).
Commercial banks breach lending limit in hydropower sector
Nepal’s commercial banks have exceeded regulatory caps on loans to the hydropower sector, as investment and credit demand remain high amid ongoing project developments. In contrast, other sectors are seeing sluggish borrowing activity.
Energy businesses oppose ‘take and pay’ clause in new budget
Energy sector entrepreneurs have publicly opposed the ‘Take and Pay’ provision included in this year’s budget. They have taken to social media to urge the Prime Minister, Finance Minister, Energy Minister, and NEA head to exclude the clause from Power Purchase Agreements (PPAs).
Bangladesh-Nepal power deal on hold due to Dhaka’s political transition
Bangladesh’s plan to buy 500 MW of electricity from Nepal’s Upper Karnali Hydropower Project has been suspended. The pause follows a decision by Bangladesh’s interim government to halt agreements made under special executive authority.
Cyber security bill criticized for lacking scope and clarity
Stakeholders have voiced concern over the recently tabled Information Technology and Cyber Security Bill, 2082. The bill, introduced by Minister Prithvi Subba Gurung, has been called incomplete and overly punitive, as it categorizes all cyber offenses as criminal and imposes severe penalties.
Nepal imports over 4.5 million umbrellas annually
With the monsoon season in full swing, umbrella demand is high in Nepal. However, the country remains heavily dependent on imports, bringing in more than 4.5 million umbrellas each year.
Insurance payouts for royalist protest damages lag behind claims
Of the Rs 42.1 million in insurance claims filed for damages during the March 28 royalist protests, only Rs 15.8 million has been paid so far. According to the Insurance Board, as of mid-June, just a third of claims had been settled.
Pokhara unveils Rs 8.35 billion budget for FY 2025/26
Pokhara Metropolitan City has announced a budget of Rs 8.35 billion for the next fiscal year, marking an 11% increase. The budget focuses on infrastructure, tourism development, and commercial agriculture.
Mechi Customs collects Rs 14.43 billion in 11 months
The Mechi Customs Office reported Rs 14.43 billion in revenue collection over the first 11 months of fiscal year 2024/25. This amounts to 91.56% of its Rs 15.77 billion target, according to spokesperson Ishwar Kumar Humagain.
Only four out of 120 planned industrial villages completed in six years
Although the government had pledged to establish 120 industrial villages across all provinces, only four have been completed since the plan’s inception six years ago. These are located in Tanahun, Syangja, Gulmi, and Achham districts.
Second-phase petroleum pipeline project sees faster progress
Construction of the second phase of the petroleum pipeline from Amlekhgunj to Lothar (62 km) is gaining traction. Indian Oil Corporation has urged the Nepali side to speed up land acquisition to avoid project delays.
FNCCI Koshi chapter submits monetary policy recommendations
The Koshi Province chapter of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has proposed 20 suggestions for the upcoming 2025/26 monetary policy. Key proposals include making interest rates more transparent, stable, and rule-based.
Record dog chew exports boost Nepal’s global trade profile
Nepal recorded its highest-ever exports of dog chews in the first 11 months of the current fiscal year. These nutritious dog treats, now popular internationally, have helped raise Nepal’s visibility in global markets and strengthened its export sector.
Chimkhola–Mangle–Rahughat hydropower begins test electricity generation
The 37.5 MW Chimkhola–Mangle–Rahughat Hydropower Project in Myagdi has started test production. Developed by Tudi Power Company Ltd, the project has completed major structural tests, including dam and tunnel evaluations.
Salyan sees closure of 40 industries amid economic slowdown
Industrial activity in Salyan is facing a major downturn, with 40 small and cottage industries shutting down in fiscal year 2024/25. Entrepreneurs cite poor promotion and lack of support for local products as key reasons for the closures.
Daram Khola hydropower opens IPO for locals and migrant workers
Daram Khola Hydro Energy Ltd has launched its IPO targeting project-affected locals and Nepalis working abroad. The offering includes 3.95 million shares valued at Rs 395 million, representing 38.33% of the company’s total capital.
eSewa partners with Touch ‘n Go to enable digital remittances
Nepal’s eSewa Money Transfer has partnered with Malaysia’s leading e-wallet provider, Touch ‘n Go. This collaboration allows Nepali workers in Malaysia to digitally contribute to Nepal’s Social Security Fund through the app.
BYD launches upgraded Dolphin EV model in Nepal
Cimex Inc. Pvt. Ltd., the official BYD distributor in Nepal, has unveiled the new Dolphin-025 electric vehicle. Designed for eco-conscious city drivers, the enhanced model strengthens BYD’s presence in the Nepali EV market.
Prabhu Insurance declares bonus shares and cash dividend
Prabhu Insurance has announced an 18% bonus share distribution along with a 0.9474% cash dividend for tax purposes. The decision was approved by the company’s board based on profits from the previous fiscal year.
Lumbini Palace Resort announces Rs 1 billion expansion plan
Lumbini Palace Resort will invest an additional Rs 1.085 billion to upgrade its facilities. Currently operating 31 rooms, the resort aims to achieve five-star status by 2028 as part of its strategic expansion.
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