Economic Digest: Nepal’s Business News in a Snap

KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.

Nepal’s recent economic landscape presents a mixed picture of progress and persistent challenges. While export growth surged nearly 96% and EV imports rose notably, indicating shifting trade dynamics and consumer preferences, the domestic stock market saw a modest decline amid low volatility and reduced trading volumes.

The central bank’s Rs 2.78 billion investment in term deposits reflects cautious monetary maneuvering, even as banks reported improved profits despite rising non-performing loans.

Infrastructure commitments—including major hydropower and petroleum projects—signal long-term development intent, but delays in legacy projects like the Rani Jamara Kulariya irrigation scheme expose bureaucratic inefficiencies.

Meanwhile, real estate transactions declined, insurance coverage expanded, and regional fiscal reforms faltered. Collectively, these developments highlight a complex interplay of growth momentum, structural bottlenecks, and emerging opportunities in Nepal’s evolving economic narrative.

Stock market slips 31 points amid low volatility

This week, the stock market dipped from 2,788 to 2,757 points—a 31-point drop. Volatility remained subdued, with daily swings under 10 points: a 27.14-point loss on Sunday, followed by gains of 9.16 on Monday and 6.51 on Tuesday, then losses of 9.70 on Wednesday and 9.22 on Thursday. Low volatility also contributed to a drop in trading volume.

NRB to invest Rs 2.78 billion in bank term deposits

Nepal Rastra Bank plans to invest Rs 2,776.7 million into term deposits across banks. Of this, Rs 2,221.4 million is earmarked for commercial banks, Rs 416.5 million for national-level development banks, and Rs 138.8 million for finance companies. Banks were invited to submit interest proposals by midnight of August 24.

Nepal’s exports nearly double in Shrawan

Exports reached approximately Rs 24 billion in Shrawan—an impressive 96 percent increase compared to Rs 12.83 billion during the same period last year.

Nepal imports 160 EVs in first month of FY 2025/26

In the first month of FY 2025/26, Nepal imported 160 electric vehicles valued at Rs 418.8 million, generating Rs 282.9 million in revenue. India led suppliers with 85 EVs, followed by China with 60, Thailand with 13, and single units from South Korea and the USA.

Property transactions plunge in Shrawan

Housing and land dealings saw a notable decline this Shrawan, with 104,218 property-related services transacted—a nearly 18.1 percent drop from last year’s 127,206, according to the Ministry of Land Management, Cooperatives, and Poverty Alleviation.

Banks post profit gains, but structural issues remain

While banks and financial institutions posted better profits in FY 2024/25, challenges persist. Non-banking assets and loan write-offs rose, and the average non-performing loan ratio climbed to 4.62 percent from 3.86 percent.

Life insurance coverage climbs to 48 percent

By the close of fiscal year 2024/25, life insurance covered 48 percent of the population, with 15,630,999 policies issued—rising from 13,881,492 policies and 43.27 percent coverage the prior year, according to the Nepal Insurance Authority.

Rs 8.84 billion approved for Lower Apsuwa hydro project

The Investment Board approved investing Rs 8.84 billion in the 54 MW Lower Apsuwa Hydropower Project. Additionally, a negotiation committee was formed to discuss agreements and financing details for the upcoming 800 MW West Seti Hydropower Project.

40,000 households to join Upper Arun hydropower project

Energy Minister Deepak Khadka announced that 40,000 households in Sankhuwasabha will be allocated shares worth Rs 500,000 each in the 1,063 MW Upper Arun Hydropower Project once construction is halfway completed.

India approves additional 80 MW power purchase from Nepal

The Central Electricity Authority of India approved the purchase of an additional 80 MW from Nepal—48.5 MW from Mewa Khola and 31.04 MW from Karuwa Seti—under a medium-term agreement with Bihar, valid until October 31, 2026.

Rani Jamara Kulariya irrigation project still incomplete after 15 years

Launched in FY 2010/11, the irrigation project remains only 74 percent complete due to technical, legal, and bureaucratic delays, stated the Ministry of Energy, Water Resources, and Irrigation.

Indian trade officials inspect Nepali oil packaging industries

India’s Ministry of Commerce inspected Nepali soybean and sunflower oil producers—Pashupati Food Oil, Quality Oil, Maruti, and Baba Oil—for possible packaging under Indian brand names. The inspection, conducted with Nepal’s Ministry of Industry, Commerce, and Supplies, is part of SAFTA measures for verifying certificates of origin.

NOC to begin Rs 3.756 billion petroleum pipeline and depot project

Nepal Oil Corporation will initiate Rs 3.756 billion in pipeline and depot construction across Jhapa, Chitwan, Kathmandu, and Bhairahawa. The project includes a new 18,900-kiloliter storage depot in Mechinagar13, Jhapa.

Nepal Airlines adopts non-destructive testing for safety

Nepal Airlines Corporation has introduced non-destructive testing (NDT) technology to detect small cracks and structural issues in aircraft parts—aiming to enhance safety and reduce repair costs.

KOICA marks 30 years of development partnership in Nepal

The Korea International Cooperation Agency (KOICA) celebrated three decades of collaboration with Nepal, signing three new agreements—including a $9 million project to establish the Gandaki Technical Institute (2025–2030).

Nepal and Bhutan tourism associations sign MoU

The Nepal Association of Tour and Travel Agents (NATTA) and Bhutan’s Association of Tour Operators (ABTO) signed an MoU at Dungkar Dzong in Paro to boost bilateral tourism collaboration.

Koteshwor underpass slated for completion in 2033

The Koteshwor Underpass, backed by nearly Rs 30 billion in Japanese loan funding, is expected to be completed by September 2033. DPR and EIA consulting firms will be appointed by March 2026.

Cardamom exports via Mechi Customs surge 99.5 percent

Cardamom exports nearly doubled in Shrawan, rising 99.5 percent to Rs 32.18 crore (216.15 metric tons), compared to Rs 16.13 crore last year, according to Mechi Customs.

Kodari Road reopening resumes Tatopani trade after landslide disruption

Kodari Road partially reopened after three weeks of disruption due to monsoon-driven landslides, allowing Nepal–China trade at Tatopani to resume. Thirty loaded trucks made it to the customs yard, while 500 containers remain stuck on the Chinese side.

Sudurpaschim province fails to broaden tax base despite reforms

Despite policy reforms introduced since FY 2019/20 to expand tax coverage, Sudurpaschim Province has seen limited gains—tax rates rose, but actual base coverage remains narrow.

Anand Raj Sharma Wagle appointed to SEBON board

Anand Raj Sharma Wagle—current Vice President of ICAN—was sworn in as a board member of SEBON, fulfilling the statutory requirement for ICAN representation.