KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape this week reflected a mix of sectoral resilience and underlying structural concerns. Despite a 4.45% drop in the NEPSE index, hydropower stocks defied the trend, registering gains and dominating trading volumes, underscoring investor confidence in the energy sector.
Meanwhile, gold prices fell sharply, signaling potential shifts in investor sentiment. The government advanced plans for regional energy connectivity with China, but inefficiencies—such as equipment neglect at Tribhuvan International Airport—continue to obstruct trade operations.
New regulatory hurdles, including India’s BIS certification mandate for sanitary exports, highlight Nepal’s vulnerability to external trade policies, while internal challenges like mismanaged mineral resources and stalled dairy operations reveal systemic issues.
Simultaneously, tea exports rose significantly, chili farming expanded, and the government committed to privatizing key state-owned enterprises and achieving rice self-sufficiency.
However, dissatisfaction among ruling coalition partners over provincial budgets and declining trade from ventures like Nepal Welhope Agri-Tech underscore broader concerns over governance and market access.
Hydropower sector gains even as NEPSE index drops 4.45%
Despite the NEPSE index declining by 4.45% this week, the hydropower sub-index rose by 3.82 points, making hydropower companies the top performers in both share price growth and trading volume. On Thursday, Green Development Bank’s shares surged by 9.18%, while Saptakoshi Development Bank’s rose by 9%. Shares of Varun Hydropower, People’s Hydropower, and Super Madi Hydropower also posted notable gains. Hydropower companies dominated the top five in trading volume.
Gold price falls by Rs 2,900 per tola in local market
Gold prices in Nepal dropped significantly on Friday, with the price of hallmark gold falling by Rs 2,900 per tola. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price dropped from Rs 192,300 per tola on Thursday to Rs 189,400 on Friday. Silver prices also declined by Rs 10 per tola, standing at Rs 2,165.
Nepal and China to connect through 220 kV transmission line, says Minister Khadka
Energy, Water Resources, and Irrigation Minister Deepak Khadka announced that Nepal is preparing to construct a 220 kV transmission line connecting Rasuwa Gadhi, Chilime, Jilong, and Kerung with China. Speaking at the fifth SCO energy ministers’ meeting in Ningbo, China, Minister Khadka also discussed Nepal’s energy trade progress with India and Bangladesh.
Lack of maintenance halts cargo processing at TIA
Cargo operations at Tribhuvan International Airport are nearing suspension due to poorly maintained inspection equipment. Nepal Transport and Warehouse Ltd., responsible for the maintenance of X-ray scanners, weighing machines, and printing systems, has failed to repair broken equipment, causing major delays in import and export processing. Cargo operators have expressed frustration, warning that clearance processes could come to a complete halt.
India mandates BIS certification for sanitary pads and diapers from Nepal
India now requires sanitary pads and diapers exported from Nepal to be certified by the Bureau of Indian Standards (BIS). Only products with proper packaging and trademarks are permitted. Nepali manufacturers have criticized the restrictions, noting that India rejects loosely packaged products and enforces strict import rules. Nepal has yet to introduce corresponding policies to address these new requirements.
Disaster relief fund holds NPR 4.65 billion, says NDRRMA
The National Disaster Risk Reduction and Management Authority (NDRRMA) reports that Nepal currently holds NPR 4.65 billion in various funds earmarked for disaster response. This includes NPR 1.89 billion in the Prime Minister’s Disaster Relief Fund, NPR 1.27 billion in the Central Disaster Management Fund, NPR 790 million in provincial funds, and NPR 690 million in district-level funds.
Nepal aims for rice self-sufficiency within two years, says Finance Minister
Finance Minister Bishnu Paudel has pledged that Nepal will achieve rice self-sufficiency within two years. Despite large expenditures on rice imports due to insufficient production, the government plans to expand domestic paddy cultivation. In fiscal year 2024/25, Nepal cultivated 1.42 million hectares and harvested 5.96 million tons of rice, falling short of the national demand by around 750,000 tons.
Government moving to privatize four state-owned enterprises
The government has initiated the process to privatize four public enterprises: Janakpur Cigarette Factory, Nepal Metal Company, Nepal Orient Magnesite Pvt. Ltd., and Butwal Textile Factory. The Ministry of Finance has issued a public call for consultants to assess these companies’ assets, liabilities, and operational viability across legal, financial, technical, and commercial dimensions.
Insurance companies increase bond investments over five years
Nepal’s life and non-life insurance companies have steadily increased their investments in bonds. According to the Insurance Authority, life insurers alone invested NPR 2.573 billion in bonds in fiscal year 2019/20, which rose to NPR 7.558 billion by fiscal year 2023/24. Non-life insurers also contributed to this growing trend.
Nepal struggles with poor mineral resource management
Nepal continues to fall short in mineral exploration and extraction, with minimal market research and utilization strategies in place. Juddha Bahadur Gurung, acting chair of the National Natural Resources and Fiscal Commission, emphasized that government prioritization could unlock economic potential in areas like Dailekh, where natural gas reserves have been discovered. However, significant investment is needed to integrate mineral resources into the national economy.
Tatopani border open only for imports, no exports to China recorded this year
The Tatopani border in Sindhupalchok, Nepal’s oldest trade route with China, has been limited to imports only in the current fiscal year. No exports were recorded through Tatopani in the first 11 months, while imports amounted to NPR 4.689 billion. Currently, only the Rasuwa Gadhi border facilitates both import and export activities with China.
Ruling coalition voices dissatisfaction with provincial budgets
Ruling parties across several provinces—Koshi, Madhesh, Bagmati, and Lumbini—have expressed disappointment with the proposed provincial budgets for the upcoming fiscal year. In Koshi Province, lawmakers aligned with Congress leader Dr. Shekhar Koirala criticized budget allocations as imbalanced, with some threatening resignations and demanding that ministers be withdrawn from the coalition.
Bagmati Province approves new social projects as fiscal year closes
As the fiscal year nears its end, the Bagmati Province government has allocated funds for nearly a dozen new projects under the Ministry of Social Development. The Social Development Office in Kavrepalanchok will oversee the implementation of nine targeted projects in the districts of Kavrepalanchok, Sindhupalchok, Dolakha, and Ramechhap, with the aim of completing them within fiscal year 2024/25.
Morang trade body urges NRB to raise loan ceilings and scrap digital transfer fees
The Morang Industrial Trade Association has submitted recommendations to Nepal Rastra Bank for the upcoming fiscal year 2025/26. Key suggestions include increasing credit limits for share-backed loans, real estate loans, and loans for small and medium enterprises. The association also called for the elimination of fees on digital money transfers to help boost industrial and economic activity.
Tea exports rise sharply from Kakarbhitta customs point
Tea exports through the Kakarbhitta customs point surged by 40.5% during the first 11 months of the current fiscal year. According to the Mechi Customs Office, Nepal exported tea worth NPR 386.64 crore, up from NPR 275.28 crore in the same period last year.
Dairy development office in Attariya shut down over relocation dispute
The Attariya office of the Dairy Development Institution has remained locked for a month due to protests against its proposed relocation to Dhangadhi. Since the May 22 protest, administrative and economic activities have stopped. According to DDC Attariya Chief Niranjan Bhattarai, the closure has delayed payments to dairy farmers and hampered production.
Akbare chili farming expands in Udayapur, but market access remains a concern
Farmers in Katari Municipality of Udayapur district have shifted from traditional crops to commercial Akbare chili farming. While around 200 households earned between NPR 200,000 and 300,000 last year, more than 2,000 households are now engaged in chili farming across two wards. However, farmers are increasingly worried about market linkages and the sale of their produce.
People’s Power Limited to issue Rs 316 million in rights shares
People’s Power Limited will issue rights shares worth Rs 316.3 million beginning Asar 22 (July 6, 2025). The company will offer 3.163 million shares at a face value of Rs 100 each, equivalent to 50% of its existing paid-up capital of Rs 632.6 million. Shareholders will be able to purchase five shares for every ten they currently own.
Nepal Welhope Agri-Tech sees trade decline for third straight year
Nepal Welhope Agri-Tech Pvt. Ltd., a joint venture between Vaidya Group and China’s Welhope Group, saw its annual trade volume shrink for the third consecutive year. The company recorded transactions worth NPR 4.87 billion in 2024, down from NPR 5.22 billion in 2023 and NPR 5.65 billion in 2022 — a 7% decline from last year alone.
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