KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
The developments outlined in the report suggest that Nepal is entering a phase of simultaneous economic reform, infrastructure expansion, and regulatory tightening, but with implementation capacity remaining a significant constraint.
While falling gold and silver prices may ease short-term inflationary pressure on consumers, the broader picture is shaped by the government’s effort to strengthen institutional governance through action against counterfeit goods, penalties on commercial banks for regulatory violations, and incentives for tax compliance. The energy and telecommunications sectors indicate a modernization agenda, with hydropower investment, transmission expansion, energy bonds, nationwide 4G improvement, and planned 5G rollout pointing to a long-term infrastructure push.
Aviation reforms, including stronger passenger protection laws and operational improvements at Nepal Airlines, reflect attempts to rebuild confidence in public service delivery, although the airline’s large debt burden shows that revenue growth alone is insufficient without structural financial reform. Transport digitization, highway upgrading, and completion of major road corridors demonstrate continued emphasis on connectivity and regional integration.
At the same time, LPG distribution problems despite adequate imports expose weaknesses in market management, while protests against microfinance practices and IPPAN’s warning about unrest highlight the importance of social stability for investment. Overall, the report portrays an economy pursuing modernization and accountability, yet still challenged by governance gaps, distribution inefficiencies, financial stress, and the need to translate policy announcements into durable institutional outcomes.
Gold and silver prices decline in domestic market
Gold prices in Nepal fell significantly on Sunday, ending a two-day upward trend. Hallmark gold declined by Rs 1,800 per tola to Rs 283,200, while the price for 10 grams was fixed at Rs 242,800. Silver also dropped by Rs 45 per tola and was traded at Rs 4,315, down from Rs 4,360 on Friday. The decline followed recent gains in the domestic precious metals market.
Government orders crackdown on counterfeit products
Minister for Industry, Commerce, and Supplies Gauri Yadav has ordered an immediate nationwide campaign against counterfeit goods. Following intensified market inspections, authorities have seized more than 100 suspected fake products, which are now undergoing laboratory testing. The minister instructed officials to strengthen market monitoring and take strict legal action against those involved in producing or distributing counterfeit goods. Department Director General Moti Sapkota said legal proceedings will begin after the test results are received and urged consumers to report suspicious products.
Three commercial banks penalized for breaching regulations
Nepal Rastra Bank has taken regulatory action against three Class A commercial banks—Rastriya Banijya Bank, Agricultural Development Bank, and Prabhu Bank—for violating provisions during the fourth quarter of the fiscal year. The two state-owned banks received warnings for delays in freezing accounts as required by NRB directives. Prabhu Bank’s board has been directed to submit a commitment for corrective measures, while former chief executive officer Ashok Sherchan has been fined Rs 500,000 for repeated violations related to credit directives, loan classification, and financial reporting.
Energy Ministry reports 62 percent financial progress in FY 2025/26
The Ministry of Energy, Water Resources, and Irrigation has reported financial progress of 62 percent and physical progress of 71.35 percent in fiscal year 2025/26. Out of a total budget of Rs 84.33 billion, the ministry spent Rs 52.28 billion. Progress was recorded in major hydropower projects, transmission line expansion, and approval for Nepal Electricity Authority to issue Rs 20 billion in energy bonds. Officials identified land acquisition, environmental clearances, resource management, and inter-agency coordination as key obstacles. Energy Minister Biraj Bhakta Shrestha said these challenges must be addressed to accelerate infrastructure development and strengthen the energy sector.
Telecom sector set for transformation in fiscal year 2026/27: Minister Timilsina
Minister for Information and Communications Dr. Bikram Timilsina has announced that fiscal year 2026/27 will be treated as a transformation year for Nepal’s telecommunications sector. He said the government plans to improve service quality, expand modern infrastructure, strengthen public communication systems, and ensure wider access to reliable telecom and internet services. The minister said high-quality 4G services will be expanded nationwide and commercial 5G services will be launched within the year. He also pledged reforms to improve Nepal Telecom’s competitiveness, strengthen regulation, and enhance governance and customer service.
New bill seeks stronger airline accountability and passenger protection
The government has registered the Domestic Air Services (Liability) Act, 2083 in the Federal Parliament to improve airline accountability and passenger safety. The proposed legislation includes compensation provisions for delays, cancellations, accidents, baggage loss, and other service failures. Airlines would be required to ensure safe transportation, provide advance notice of disruptions, disclose ticket charges transparently, and compensate passengers for negligence-related losses. The bill also proposes increasing compensation for deaths in domestic air accidents to USD 100,000, along with coverage for medical expenses, permanent disability, and baggage claims.
Nepal Airlines reports operational improvements under new leadership
Nepal Airlines Corporation (NAC) has reported notable institutional progress since the appointment of its new leadership. Since aviation expert Maheshwar Bhakta Shrestha became Executive Chairman and General Manager in July, the airline has focused on managerial reforms, operational accountability, and commercial efficiency. NAC said revenue increased by 32 percent and seat occupancy reached 85.4 percent for the month ending mid-July compared with the same period of the previous fiscal year. The corporation plans to expand its flight network, improve efficiency, and achieve financial self-reliance within three years.
DoTM launches upgraded online system for licenses and vehicle services
The Department of Transport Management (DoTM) has introduced an upgraded Electronic Driving License and Vehicle Registration System (EDLVRS) to digitize transport services. After a temporary shutdown for system upgrades, services such as vehicle registration, ownership transfer, license renewal, new license applications, and revenue payments have resumed nationwide. The new platform includes updated data, revised tax rates, and online processing for biometric verification, payments, and medical checks. Officials said minor technical issues during the initial rollout are being addressed.
Nepal Airlines earns Rs 17.33 billion from ticket sales
Nepal Airlines generated Rs 17.33 billion in ticket revenue during fiscal year 2025/26 while carrying 576,421 passengers on domestic and international routes. Although revenue rose by Rs 2 billion from the previous year, the airline repaid only Rs 2.12 billion of its debt of more than Rs 56 billion owed to the Employees Provident Fund and Citizen Investment Trust. The Narita route in Japan produced the highest revenue, followed by Doha and Dubai. Officials said high operating costs, including aircraft maintenance and personnel expenses, continue to limit debt repayment.
LPG supply faces disruption despite restoration of full cylinders
The LPG distribution system has come under pressure after Nepal Oil Corporation resumed the supply of full 14.2 kg cylinders. Although the corporation says imports are sufficient, consumers continue to face shortages and are lining up at gas plants and distribution centers. NOC had introduced 7.1 kg half-filled cylinders in March 2026 during a shortage but restored full-weight cylinders from July 16. Consumers have blamed weak distribution and possible artificial shortages, while the corporation insists there is no shortage of petroleum products.
Environmental study notice issued for Upper Junbesi Khola transmission line
The Department of Electricity Development has issued a public notice regarding the environmental assessment of the transmission line associated with the 5.575 MW Upper Junbesi Khola Hydropower Project in Solukhumbu. The proposed 13.18-kilometre line will connect the project switchyard to the Junbesi Hub Pooling Station through the Lower Dudhkunda Khola Hydropower Project. Developer Gorkhas Himalayan Hydro Limited has prepared an Initial Environmental Examination (IEE) report, and the department has invited public feedback within 35 days.
IRD urges consumers to join taxpayer incentive scheme
The Inland Revenue Department has encouraged consumers to participate in its Taxpayer Incentive Gift Scheme by registering genuine purchase bills. Consumers making purchases worth more than Rs 100 with valid PAN or VAT bills since July 17 can upload the bills through the department’s online portal. QR-based payments are automatically included, while physical bills should be retained for verification. The scheme offers daily cash prizes and a periodic bumper prize to promote demand for official bills and strengthen tax compliance.
IPPAN calls for peace and social stability
The Independent Power Producers’ Association, Nepal (IPPAN) has appealed for peace, restraint, and social harmony amid rising tensions in different parts of the country. The association emphasized that disputes should be resolved through dialogue and constitutional processes. It warned that unrest and insecurity could disrupt hydropower projects, increase costs, weaken investor confidence, and affect employment and economic growth.
Kisan Majdoor movement protests against microfinance exploitation
Kisan Majdoor (Farmer-Worker) Movement Nepal organized a protest march in the Kathmandu Valley against what it described as exploitation by microfinance institutions. Participants marched from Thapathali Ram Mandir to Maitighar Mandala, raising concerns about the difficulties faced by borrowers and communities affected by financial practices. The movement demanded stronger protection for farmers and workers.
Kakarvitta imports petroleum products worth Rs 24.5 billion
Petroleum products worth more than Rs 24.5 billion were imported through the Kakarvitta customs point in Jhapa during fiscal year 2026/27. According to customs officials, imports included petrol worth Rs 12.18 billion, diesel worth Rs 9.55 billion, and LPG worth more than Rs 2.77 billion. Revenue collection reached Rs 5.85 billion from petrol and Rs 2.93 billion from diesel imports.
Kaligandaki Corridor road upgrading and landslide control works begin
Landslide mitigation and road improvement works have commenced along the Beni–Jomsom stretch of the Kaligandaki Corridor, a strategically important route connecting Nepal’s northern and southern borders. The Beni–Jomsom–Korala Road Project has started construction in landslide-prone areas of Myagdi, including the Galeshwor–Bainsari and Bainsari–Ratopani sections. Planned works include road widening, concrete surfacing, retaining walls, gabion structures, and slope stabilization. Project officials said the measures are intended to improve year-round transportation, as monsoon-triggered landslides and floods have repeatedly disrupted traffic on the vulnerable mountain corridor.
Postal Highway Siraha-Sarlahi section enters final phase
Construction of the Siraha-Sarlahi section of the Postal Highway has reached its final stage, with more than 90 percent of the 406.43-kilometre road blacktopped and 24 bridges completed. The Postal Highway Directorate said 347.63 kilometres have already been paved, while work on the remaining sections is continuing. Officials aim to complete the project within the current fiscal year. Once finished, the East-West Postal Highway will extend 1,792 kilometres across the country.
Karnali promotes millet for nutrition and food security
Karnali Province has marked the second National Millet Day under the theme of conserving millet for food security and nutrition. Speakers at a program in Birendranagar stressed the need to change public perceptions of millet and promote it as a nutritious and commercially viable crop. Officials called for the conservation of local millet varieties, expansion of organic cultivation, and greater participation of young people in commercialization efforts. The event also featured an exhibition of more than 20 millet-based foods, ranging from traditional dishes to modern products. Participants said wider millet promotion could improve nutrition, generate employment, and strengthen Karnali’s economy.
NMB Bank introduces financing for used electric vehicles
NMB Bank Limited has launched a new loan facility for customers seeking to purchase second-hand electric vehicles for personal or commercial use. The bank said the scheme is intended to encourage sustainable transportation and make electric vehicle ownership more affordable. Customers can apply through branches or digital channels, with a simplified approval process and competitive interest rates. NMB Bank said the initiative supports its green banking objectives and contributes to reducing environmental impacts. The bank currently operates 198 branches, 176 ATMs, and nine extension counters across the country.
Women-led homestays expand rural tourism in Jumla
Homestays operated by women in Patmara village of Patarasi Rural Municipality, Jumla, are attracting increasing numbers of domestic and international visitors. The initiative, which began in 2021 with six households, has now expanded to nine participating homes. Visitors are offered organic local food, traditional culture, and scenic natural surroundings. Tourists can experience local cuisine, Deuda dances, traditional clothing, and indigenous lifestyles. Located near Khali Patan on the route to Rara Lake, the village is emerging as a growing rural tourism destination. The program has also created local employment opportunities and helped preserve traditional products, culture, and customs.
Kumari Bank launches international eSIM and driving permit services
Kumari Bank Limited has entered into a partnership with digital travel service provider Nimbus to provide international eSIM and International Driving Permit services through its mobile banking application. The new feature enables customers traveling abroad to access mobile data without replacing physical SIM cards and to apply for driving permits through a digital process. The bank said the integration is designed to simplify travel preparations by offering multiple travel-related services on a single platform. Kumari Bank and Nimbus stated that the collaboration is aimed at delivering a more convenient, secure, and technology-oriented travel experience.
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