KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Recent developments across Nepal’s economy and governance landscape reflect a period of assertive policy intervention alongside persistent structural bottlenecks. On the fiscal and regulatory front, the government’s ordinance-driven overhaul has removed over 1,500 political appointees, tightened scrutiny over public assets, and reinforced enforcement in customs and taxation, signalling a stronger push for accountability and revenue discipline.
However, these measures are also creating disruption, particularly in trade and logistics, where new compliance requirements such as MRP labeling have stalled customs clearance and contributed to border congestion and informal market activity.
At the same time, macroeconomic indicators show both resilience and imbalance. Energy imports, startup financing, provincial economic expansion in Gandaki, and hydropower and hospitality sector investments point to steady capital flow and diversification, while agriculture and manufacturing continue to contribute unevenly amid weather shocks and input constraints.
Yet inefficiencies remain evident in underutilised natural resources like sal timber, declining tourism-linked air traffic, and delays in infrastructure and service delivery reforms. Overall, the economy is navigating a dual reality of reform momentum and operational constraints, where policy tightening is reshaping systems but also exposing long-standing implementation gaps across sectors.
Gold prices decline while silver records gains
Gold prices in the domestic market have declined by Rs 1,000 per tola on Sunday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold was traded at Rs 295,100 per tola, down from Rs 296,100 recorded on Friday. In contrast, silver prices increased by Rs 65 per tola, reaching Rs 5,010. The divergent trend reflects fluctuations in both domestic demand and international market conditions.
Ordinance removes over 1,500 political appointees
The Special Provision for Removal of Public Officials Ordinance, 2026 has led to the dismissal of 1,534 politically appointed officials across multiple state bodies. The decision affects regulatory institutions and public agencies, including senior positions under the Ministry of Labor, Employment, and Social Security. Among those removed are executive heads of the Foreign Employment Board, the Social Security Fund, and the National Vocational Training Institute. The ordinance also clears members appointed under the Foreign Employment Act, Labour Act, and Social Security Act, vacating numerous advisory and administrative roles.
MRP requirement stalls customs clearance, goods pile up at border
Customs clearance of commercial goods has come to a standstill for four consecutive days following the government’s requirement for Maximum Retail Price (MRP) labeling on all products. Hundreds of cargo vehicles remain stranded on the Indian side of the border as a result. While essential goods such as industrial raw materials and perishables like potatoes and onions continue to pass through, most consumer goods are stuck. Traders warn that the disruption is encouraging nighttime smuggling through the open border to meet market demand. Customs agents caution that prolonged delays could push smaller businesses to bypass formal import channels, reducing government revenue and increasing informal trade.
Governor and state bank officials remain unaffected by ordinance
The recent government ordinance targeting political appointments does not apply to the Governor of Nepal Rastra Bank or senior officials of state-owned banks. Although the ordinance amends 110 laws, it excludes the Nepal Rastra Bank Act, allowing Governor Biswo Nath Poudel to retain his position. Likewise, the leadership of Nepal Bank Limited, Agricultural Development Bank, and Rastriya Banijya Bank remains intact, as their appointments fall under separate regulatory frameworks rather than the amended laws. Officials at the President’s Office confirmed that appointments governed by internal rules and bylaws were not covered by the ordinance.
Petroleum imports through Kakarbhitta cross Rs 16.8 billion
Petroleum imports through the Kakarbhitta checkpoint have reached Rs 16.813 billion by mid-April in the current fiscal year. Data from the Mechi Customs Office shows that these imports generated Rs 7.447 billion in revenue over nine months. The volume includes 83,448 kiloliters of petrol worth Rs 7.759 billion and 55,024 kiloliters of diesel valued at Rs 5.871 billion. Additional imports consist of LP gas worth Rs 1.90 billion, aviation turbine fuel (ATF) amounting to Rs 570 million, and coal valued at Rs 700 million.
Government pushes to recover Rs 7.5 billion in electricity dues
The government is attempting to resolve a long-standing dispute over Rs 7.5 billion in unpaid electricity dues linked to dedicated and trunk lines. The Ministry of Energy, Water Resources, and Irrigation has authorized the Nepal Electricity Authority to recover payments from industries that used uninterrupted electricity during peak load-shedding years between 2016 and 2018. Of the 58 industries initially identified, only 12 have cleared their dues, leaving 46 still liable—some protected by court orders and others yet to respond.
Startup loan scheme shortlists over 1,300 projects
A total of 1,301 projects have been selected for startup enterprise loans in the fiscal year 2025/26, according to the Industrial Enterprise Development Institute. More than 65 percent of these projects are concentrated in agriculture, livestock, and herbal sectors, with notable participation from regions such as Mugu, Dolpa, and Madhesh. The government has allocated Rs 1.26 billion for the program, offering loans between Rs 500,000 and Rs 2 million at a 3 percent interest rate. Final disbursement will depend on inspections and interviews, while Rs 125 million in interest has already been recovered since the program’s launch.
Gandaki economy expands with service sector dominance
A study by Nepal Rastra Bank indicates that Gandaki Province is experiencing steady economic growth, with its gross domestic product projected at Rs 548 billion. The province contributes 8.97 percent to the national economy and maintains a growth rate of 5.51 percent. The service sector leads with a 55.8 percent share, while industry accounts for only 16.4 percent. Financial access continues to expand, supported by 1,392 bank branches and over 31 million mobile banking users. The provincial budget for 2025/26 stands at Rs 31.979 billion, with a strong focus on capital expenditure.
Property probe commission to investigate officials in phases
A government-formed Property Investigation Commission will conduct a two-phase inquiry into the assets of public officials serving since 1991. The first phase will examine disclosures from 2005/06 to 2025/26, followed by a review of earlier records. The commission will prioritize cases involving complaints, unexplained wealth, and officials in sensitive sectors such as land and revenue administration. It is expected to coordinate with international bodies like Interpol to trace overseas assets. The findings will be submitted to the government, which must act within 45 days.
Karnali expands road infrastructure but faces constraints
Karnali Province has completed 302 kilometers of blacktopped roads, according to the Ministry of Physical Infrastructure and Urban Development. This includes 249.58 kilometers completed in the previous fiscal year and an additional 53.26 kilometers by mid-April. The province has also developed 774.71 kilometers of gravel roads and opened over 3,276 kilometers of track roads, along with constructing 151 suspension bridges and 62 motorable bridges. However, rising fuel costs and supply disruptions linked to global tensions have slowed progress. Despite plans to eliminate risky ropeway travel, only 26 of the targeted 63 suspension bridges have been completed.
Education ministry to address enrollment and fee disputes
The Ministry of Education, Science, and Technology is set to hold a high-level meeting to resolve confusion over school enrollment schedules and fee structures. The meeting will include mayors from the Kathmandu Valley and representatives of local governments. A key issue is the mismatch between federal directives and local implementation, with schools in the valley starting enrollment later than instructed. The meeting will also address concerns over unauthorized fee increases and aims to establish a unified academic calendar, with coordination from the Ministry of Home Affairs.
Airlines seek relief amid deepening financial strain
The Airlines Operators Association of Nepal has urged the government to introduce relief measures to prevent the aviation sector from deteriorating further. In a formal request to the Ministry of Culture, Tourism, and Civil Aviation, the association cited high fuel costs, post-pandemic recovery challenges, and geopolitical tensions as key pressures. Fuel expenses have risen to as much as 60 percent of operating costs. The association has called for a 50 percent reduction in aviation-related fees and proposed converting dollar-based service charges into Nepali rupees to reduce foreign exchange risks.
Policy constraints leave Rs 20 billion worth of sal timber unused
Nepal is underutilising its vast reserves of sal (Shorea robusta) timber due to restrictive policies and procedural barriers that limit harvesting and distribution. Annual production stands at just 8 million cubic feet—around 16 percent of total capacity—leaving nearly 84 percent, valued at approximately Rs 20.16 billion, untapped. In Sunsari, the Jalakanya Community Forest generates only Rs 150,000 to Rs 200,000 annually because regulations permit the collection of fallen trees only. Experts argue that complex legal frameworks, high operational costs, and limited market access are discouraging production, forcing Nepal to depend on imports despite strong domestic potential.
Lukla flights decline sharply amid geopolitical tensions
Flight activity at Tenzing-Hillary Airport has dropped by nearly 50 percent due to geopolitical instability in West Asia. According to the Civil Aviation Authority of Nepal, daily flights have fallen from around 400 to about 200. Passenger numbers have also declined significantly, especially among tourists from Europe and the United States, although Indian visitors remain relatively steady. Currently, more flights are departing the region than arriving, with only three airlines maintaining regular operations to Lukla.
Unfavourable weather reduces wheat output in Bara by 20 percent
Wheat production in Bara has declined by 20 percent this year due to adverse weather conditions. According to the Agriculture Knowledge Center, total output dropped by 17,980 metric tons from expected levels. Farmers cultivated wheat across 29,000 hectares in the fiscal year 2025/26, but productivity fell from the targeted 3.1 metric tons per hectare to 2.48 metric tons. Despite the reduced yield, the 71,092 metric tons produced met high quality standards and fetched around Rs 4,000 per quintal in markets such as Kalaiya. This marks a decline from the previous year’s output of 96,620 metric tons, valued at Rs 4.025 billion.
Everest sugar mill clears majority of payments to farmers
Everest Sugar Mill in Mahottari has disbursed most payments to sugarcane farmers for the 2025/26 crushing season. The mill procured 2.85 million quintals of sugarcane from 11,818 farmers, producing over 261,000 quintals of sugar. A total of Rs 1.764 billion has been transferred to farmers’ bank accounts. Following a government price revision, payments were made at Rs 620 per quintal at the factory gate and Rs 595 at collection centres. However, production fell short of targets by 400,000 quintals due to reduced cultivation, while farmers continue to push for a minimum support price of Rs 750 per quintal.
Digital farmer registry launched to improve agricultural service delivery
Shuklaphanta Municipality has introduced an electronic farmer listing initiative to enhance transparency and efficiency in agricultural support वितरण. Implemented under the Right to Food and Food Sovereignty Act, the programme collects farmers’ personal and operational data digitally. The system will integrate with the national identity database to ensure targeted distribution of fertilisers, seeds, insurance, and subsidies. Farmers are required to submit citizenship or national ID documents, land ownership papers, and lease agreements where applicable. Once verified by ward committees and municipal authorities, registered farmers will receive official identity cards for accessing future government benefits.
Tighter customs enforcement boosts domestic markets in Biratnagar
Strict enforcement of customs duties has significantly reduced cross-border shopping in Jogbani, shifting consumer activity դեպի Biratnagar. Previously, many consumers crossed the border for everyday goods, leaving local markets subdued. Now, commercial areas such as Mahendra Chowk, Shani Mandir, and the Biratnagar Bus Park are witnessing increased business activity. Officials report that around 15 individuals per day are now paying formal customs duties, while informal smuggling through small-scale methods has declined. This shift has revitalised local commerce and strengthened domestic market participation.
Royal Tulip Chitwan hotel seeks approval for IPO issuance
KTM Hospitality Limited, operator of the five-star Royal Tulip Chitwan resort, has applied to the Securities Board of Nepal to issue an IPO. The company plans to float 1.55 million shares at Rs 100 each, with RBB Merchant Banking appointed as the issue manager. Care Rating Nepal has assigned a ‘Double B Minus’ rating, indicating moderate financial risk. The resort, built at a cost of approximately Rs 1.70 billion, features 65 rooms, a helipad, and proximity to the Kumroj Buffer Zone Community Forest.
Traffic enforcement generates Rs 565,000 in revenue within 24 hours
The Kathmandu Valley Traffic Police Office has intensified enforcement, penalising 2,111 drivers in a single day and collecting Rs 565,000 in revenue. Violations included 109 cases of driving under the influence, 184 instances of unauthorised ride-sharing, and 222 cases of speeding. Additional infractions involved traffic signal violations, lane discipline breaches, and honking in restricted areas. Authorities state that stricter monitoring aims to improve road safety and enforce compliance across Kathmandu Valley.
Smuggled counterfeit cigarettes spread to hill districts
Police in Bajhang have seized counterfeit Khukuri cigarettes being transported via a mini-truck, arresting two individuals linked to the operation. Authorities report that fake Nepali-branded cigarettes, produced in India, are now moving beyond the Terai and Madhesh into hill regions. The smuggling network exploits the open border and weak enforcement mechanisms to distribute counterfeit goods nationwide. Officials warn that this expanding illegal trade is harming domestic manufacturers and causing significant revenue losses, prompting calls for stronger border controls.
Super Kabeli hydropower project to launch IPO
Snow Rivers Company Limited is preparing to issue an Initial Public Offering for its Super Kabeli Khola-A project in Taplejung. The company will offer 718,125 shares at Rs 100 each starting May 12, aiming to raise Rs 71.8 million. Shares have already been distributed to local residents and Nepali citizens working abroad. The 13.5 MW hydropower project is currently connected to the national grid, and the IPO marks the next phase of its financial expansion.
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