KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s recent economic data presents a mixed but revealing picture: while foreign trade expanded by over 20 percent in the first five months of FY 2025/26—driven largely by a sharp rise in exports, particularly processed edible oils—the trade deficit continues to widen due to import dependence and limited value addition.
Export growth remains concentrated in a few products and markets, with India dominating trade flows, underscoring structural vulnerabilities highlighted by economists who argue that monetary policy alone cannot correct these imbalances without deeper fiscal and institutional reforms. Positive developments, such as Nepal Rastra Bank’s approval for the first overseas expansion of a Nepali IT firm and rising exports of herbs, beaten rice, pickles, and border-based trade through Birgunj and Nepalgunj, signal emerging diversification and regional trade momentum.
However, persistent challenges—including stalled social security inclusion for informal workers, heavy reliance on re-exports, infrastructure constraints at key customs points like Korala, and external labor market shocks such as South Korea’s reduced EPS visa quota—suggest that sustaining growth will require coordinated policy action, stronger governance, and greater domestic value creation to translate trade gains into broad-based economic resilience.
Foreign trade grows by over 20 percent in five months
Nepal’s foreign trade rose by 20.07 percent during the first five months of fiscal year 2025/26, reaching Rs 8.826 billion. Data from the Department of Customs shows imports increased by 15.83 percent to Rs 7.661 billion, while exports surged by 58.17 percent to Rs 1.165 billion. Despite stronger exports, the trade deficit widened to Rs 6.496 billion. India and China remained Nepal’s largest trading partners. Petroleum products and soybean oil led imports, while large cardamom and carpets dominated exports.
Gold and silver prices ease after record highs
Gold prices in the domestic market fell by Rs 600 per tola on Thursday, settling at Rs 267,500, according to the Federation of Nepal Gold and Silver Dealers’ Association. The decline followed Wednesday’s record high of Rs 268,100 per tola. Silver prices also dropped by Rs 20 to Rs 4,400 per tola. Traders noted that while global price movements continue to influence local rates, the slight correction offers some relief after prices peaked during the ongoing wedding season.
NRB allows first overseas expansion by Nepali IT firm
Nepal Rastra Bank has issued legal approval for a Nepali information technology company to establish an overseas branch for the first time. iDream Technologies has received permission to open iDream LLC in the United States, along with approval to transfer equity funds in US dollars to a bank account there. The central bank’s decision is seen as a landmark step that could enable Nepali IT companies to earn foreign currency and expand into global markets. Officials believe the move will encourage more tech firms to operate internationally, strengthening Nepal’s digital services exports.
Exports worth Rs 116 billion recorded in five months
Nepal exported goods worth Rs 116 billion between November 17 and December 15, with just 10 products accounting for 57 percent of total exports, according to customs data. Processed soybean oil alone generated Rs 46.55 billion—five times higher than the previous year. Large cardamom exports rose by 60 percent to Rs 5.53 billion. Yarn exports earned Rs 5.21 billion, while woolen carpets contributed Rs 4.14 billion. Other major export items included fruit juice and processed sunflower oil.
Economists call for fiscal reforms to tackle trade imbalance
Economists speaking at a Nepal Rastra Bank interaction on Wednesday stressed that monetary policy alone cannot address Nepal’s economic challenges. NRB Governor Dr. Biswo Nath Poudel noted that Nepal’s direct shift from agriculture to services has weakened its economic structure. Despite budget allocations, capital spending remains weak due to limited institutional capacity. Former National Planning Commission vice-chair Prithvi Raj Ligal said achieving 3.5 percent economic growth would be difficult amid rising non-performing loans and weak private-sector credit demand. Economists Dr. Govinda Nepal and Dr. Kalpana Khanal urged coordinated fiscal reforms, including multiple VAT rates and a review of the fixed exchange rate regime with India.
Processed edible oil exports to India reach Rs 52.80 billion
Nepal exported processed edible oil worth Rs 52.80 billion to India during the first five months of the current fiscal year. The exports included soybean, sunflower, and palm oil. However, Nepal imported raw edible oil worth Rs 58.978 billion from countries such as Argentina, Brazil, and Indonesia during the same period. Trade experts noted that the exports largely depend on re-exporting imported raw oil with limited value addition. Argentina alone supplied raw soybean oil worth Rs 39.24 billion.
Informal workers still struggle to enter social security system
Government data shows that around 4.4 million workers—about 62.2 percent of Nepal’s workforce—remain in the informal sector. Although a policy to include informal and self-employed workers in the Social Security Fund took effect on August 17, 2023, enrollment remains minimal, with only 1,469 contributors registered so far. This includes 809 informal workers and 660 self-employed individuals. Expansion plans for government contract staff and informal workers have stalled at the Ministry of Finance. So far, only 114 local governments have signed agreements, and just six are actively implementing contribution mechanisms.
Exports through Birgunj border jump by 89 percent
Exports routed through the Birgunj customs point rose sharply by 89 percent in the first five months of the fiscal year, reaching Rs 39.97 billion. This represents an increase of Rs 18.79 billion compared to the same period last year. Processed soybean oil accounted for the largest share at Rs 20.76 billion. Other major exports included fruit juice, processed sunflower oil, processed palm oil, and garments.
Nepalgunj customs handles trade worth over Rs 31 billion
Nepalgunj Customs Office recorded total trade transactions worth Rs 31.685 billion during the first five months of fiscal year 2025/26. Imports accounted for Rs 30.668 billion, while exports stood at Rs 1.16 billion. Imports rose compared to Rs 29.84 billion during the same period last year. Revenue collection reached Rs 7.651 billion, achieving 83.45 percent of the target by December 15, though the trade deficit remains significantly high.
Herb exports through Nepalgunj rise by 71 percent
Herb exports via the Nepalgunj border climbed by 71 percent to Rs 250 million by December 15 of the current fiscal year. A total of 841,338 kilograms of herbs were exported, with around 85 percent destined for India. The Herbal Entrepreneurs Association of Nepal has urged the government to introduce clearer policies to simplify exports and reduce dependence on a single market.
Mustang customs earns nearly Rs 5 billion via Korala border
The Mustang Customs Office at the Lizi–Nechung (Korala) border has collected Rs 4.979 billion in revenue since becoming fully operational on September 15. Trade was diverted to the Korala route after disruptions at Rasuwagadhi and Tatopani. The office has cleared 1,761 electric vehicles along with other consumer goods from China. Despite strong revenue performance, the customs office faces serious infrastructure challenges at an altitude of 4,650 meters and has received only Rs 5 million of the Rs 50 million required for permanent construction.
Australia emerges as leading market for Nepal’s beaten rice
Nepal exported beaten rice worth Rs 125.8 million during the period from November 17 to December 15 of fiscal year 2025/26, according to the Department of Customs. A total of 314,311 kilograms of beaten rice were shipped to 10 countries. Australia topped the list, importing 144,632 kilograms valued at Rs 72.9 million. Other key destinations included Italy with imports worth Rs 16.4 million, the United States at Rs 13 million, and Canada at Rs 10.7 million. Japan, Poland, and the UAE also contributed notably to export earnings.
Nine life insurance companies declare dividends
At least nine life insurance companies have announced dividend payouts from profits accumulated in the previous fiscal year. IME Life and Sanima Reliance will close their books on Friday, making shareholders on record eligible for dividends. Five insurers opted exclusively for cash dividends, while four offered a mix of modest bonus shares and higher cash payouts. Nepal Life Insurance and Life Insurance Corporation declared the highest returns at 21 percent. Overall, dividend announcements in the sector are viewed as positive.
Pickle exports reach Rs 82.4 million in five months
Nepal exported pickles worth Rs 82.4 million in the first five months of the current fiscal year, customs data shows. A total of 140,304 kilograms were shipped to various countries, including Canada, Australia, South Korea, and Japan. Canada emerged as the largest buyer with imports worth Rs 19.4 million, closely followed by Australia at Rs 19.3 million. Although export earnings declined from Rs 95.6 million in the same period last year, demand among the Nepali diaspora in overseas markets remains strong.
South Korea reduces EPS E-9 visa quota for 2026
South Korea has lowered its Employment Permit System (EPS) E-9 visa quota for non-professional foreign workers to 80,000 for 2026, a reduction of 38.46 percent from 130,000 slots in 2025. The decision, taken by the Foreign Workforce Policy Committee, affects 17 countries, including Nepal. The Ministry of Employment and Labor cited economic slowdown and an oversupply of workers as key reasons. Meanwhile, the E-8 seasonal worker quota was increased to 109,000 as Korea plans to move toward a more integrated visa system targeting labor shortages in specific sectors.
Prices of akabare chili and coriander rise sharply
Wholesale prices of Akabare (red cherry pepper) and fresh coriander surged at the Kalimati market on Thursday, according to the Kalimati Fruit and Vegetable Market Development Committee. The price of Akabare chili increased by Rs 41 per kilogram to Rs 366, up from Rs 325 on Wednesday. Similarly, green coriander prices jumped by Rs 32 per kilogram, reaching Rs 92 from the previous Rs 60. Market data indicates a notable upward trend in the prices of these commonly used kitchen ingredients.
Citizen Investment Trust proposes 8 percent cash dividend
The Citizen Investment Trust (CIT) has scheduled its 31st Annual General Meeting for January 14, 2026, at its central office. The meeting will review financial statements for fiscal year 2024/25 and discuss profit distribution. The board has proposed an eight percent cash dividend along with a five percent bonus share for shareholders. The AGM will also elect one shareholder representative to the board and deliberate on strategic plans aimed at improving investment performance.
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