KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
The developments collectively point to an economy trying to expand investment, infrastructure and private-sector activity while continuing to grapple with structural weaknesses in implementation, regulation and access to basic services. The government’s outreach to the World Bank, US agencies and private investors reflects an effort to mobilise external financing for reconstruction and infrastructure while advancing economic reforms and seeking removal from the FATF grey list. However, attracting investment will depend not only on funding but also on Nepal’s ability to improve project execution and regulatory certainty.
The proposed split of CAAN is another significant institutional reform, aimed at separating aviation regulation from service delivery and addressing concerns raised by ICAO and the EU. Similarly, measures to regulate airfares, support vulnerable households and recover cooperative deposits indicate greater emphasis on consumer and citizen protection.
Yet several developments expose persistent gaps between policy and implementation. Despite record fertiliser imports, farmers still faced shortages, while more than 10,000 startup proposals resulted in only 922 loans. Delays in road projects and the stalled Biratnagar Podway further highlight execution challenges. The collapse of the Dodhara suspension bridge also underscores infrastructure vulnerability.
At the same time, rising festival imports, renewed international flights to Pokhara and expanding livestock services indicate areas of economic activity and opportunity. Overall, the picture is one of substantial policy activity, but with implementation capacity remaining a critical determinant of whether these initiatives translate into durable economic gains.
Finance Minister heads to US for talks on aid, reconstruction and economic reforms
Finance Minister Swarnim Wagle has left for Washington, DC, leading a Nepali delegation at the invitation of World Bank Group President Ajay Banga. During his visit, Wagle is scheduled to meet senior officials of the World Bank, the US Treasury Department and the US International Development Finance Corporation, as well as representatives of the private sector and potential investors. The meetings, scheduled for October 5 and 6, will focus on bilateral assistance, reconstruction, Nepal’s efforts to exit the Financial Action Task Force (FATF) grey list and broader economic reforms. Reconstruction and resilient development of infrastructure damaged by the Bhote Koshi floods will also feature prominently in discussions with representatives of the World Bank and the US government. The Nepali delegation is also expected to explore opportunities to attract development partners and private investment to economically important infrastructure projects, including roads and electricity transmission lines. The government hopes the discussions will help mobilise additional financial and development support while generating employment and expanding economic opportunities through reconstruction and infrastructure investment.
SEZ industries export goods worth Rs 4.5 billion in seven years
Industries operating in Nepal’s Special Economic Zones (SEZs) exported goods worth Rs 4.5042 billion between fiscal year 2019/20 and fiscal year 2025/26. Industries in the Bhairahawa Special Economic Zone accounted for the exports during the period, while products worth Rs 3.1819 billion were sold in the domestic market. Industries operating in the SEZ have been exporting a range of products while benefiting from incentives such as income tax concessions, value-added tax exemptions and cash subsidies for exports. Products exported from the Bhairahawa SEZ include limestone, bulbs, carpets, steel utensils, tanks, plastic goods, granite and furnace oil. Most industries operating in the zone export their products to neighbouring India. The SEZ programme aims to boost industrial production and exports by providing dedicated infrastructure and fiscal incentives to businesses operating within designated economic zones.
Govt introduces bills to split CAAN into regulatory and service authorities
In a major structural reform aimed at addressing longstanding aviation safety concerns, the government has introduced bills proposing the separation of the Civil Aviation Authority of Nepal (CAAN) into two independent entities. Minister for Culture, Tourism and Civil Aviation Khadak Raj Poudel (Ganesh) registered the Civil Aviation Authority Bill 2026 and the Nepal Air Service Authority Bill 2026 at the House of Representatives. If enacted, the proposed legislation would establish a standalone Civil Aviation Authority responsible for safety oversight and licensing, while a separate Air Service Authority would handle airport operations, infrastructure development and air navigation services. The law governing the service-oriented body would come into force 91 days after presidential authentication. The proposed restructuring seeks to address longstanding concerns raised by international aviation authorities over CAAN’s dual role as both regulator and service provider. Audits conducted by the International Civil Aviation Organization (ICAO) in 2009, 2013, 2017 and 2022 repeatedly identified the overlapping functions as a potential conflict of interest. The issue has also been cited in connection with the European Union’s restrictions on Nepali airlines.
Salt Trading to import 25,000 tonnes of sugar ahead of major festivals
Salt Trading Corporation is preparing to import 25,000 tonnes of sugar from India to prevent potential shortages in the domestic market ahead of the major festival season. Three railway consignments carrying sugar had already arrived at Birgunj since the beginning of October, bringing a combined 7,990 tonnes and 80 quintals. The first consignment contained 2,679 tonnes and 60 quintals, the second 2,671 tonnes and 20 quintals, and the third 2,640 tonnes. The remaining quantity is expected to arrive gradually. The sugar was purchased from Renuka Sugar Mill in Gujarat, India, under a government initiative and transported to the Sirsiya Dry Port in Birgunj. Of the total 25,000 tonnes being imported, Salt Trading Corporation will receive 22,500 tonnes, while Food Management and Trading Company will receive the remaining 2,500 tonnes. The import has been prioritised because sugar demand is expected to rise during Dashain, Tihar and Chhath. Distribution of the imported sugar has already begun in the domestic market.
Problematic cooperatives return deposits to 223 more small savers
The Problematic Cooperative Management Committee has returned deposits to another 223 savers from four troubled cooperatives, with priority given to small depositors. The latest repayments involve depositors of Shiv Shikhar, Kantipur, Krishi Bikas and Gorkha cooperatives. The committee is recovering outstanding loans and managing assets of troubled cooperatives to generate funds for repayment to affected depositors. Depositors are being categorised according to the size of their savings, with smaller depositors prioritised during the initial stages of repayment. The committee plans to continue this approach in subsequent phases before making payments to other categories of depositors. Loan recovery and asset management are being carried out under existing legal provisions, with recovered funds being distributed to depositors as they become available. The committee has identified loan recovery and effective management of cooperative assets as key components of the ongoing repayment process.
Pokhara businesses welcome resumption of regular international flights
Businesses in Pokhara have welcomed the resumption of regular international flights from Pokhara Regional International Airport, with Flydubai beginning scheduled services after a 45-month gap since the airport opened. The service, which began on September 23, provides passengers from Pokhara with a direct connection to Dubai and onward access to several international destinations on a single ticket. The resumption has already increased activity in the tourism sector, with around 300 foreign tourists arriving through the service. Tourism entrepreneurs say the increased movement of visitors is contributing to business activity and creating employment opportunities. Hotels, transport operators, retailers and other small businesses have also reported benefits from the renewed international connectivity. Tourism stakeholders are preparing plans for tourism entrepreneurs from Pokhara to visit Dubai on a rotational basis while working to attract more international visitors to the city. The business community has stressed the need for coordinated efforts to make the service sustainable so that its economic benefits extend beyond the initial rise in tourist arrivals.
Govt proposes housing grants of up to Rs 75,000 under new building bill
The government has proposed providing housing grants of up to Rs 75,000 to poor and vulnerable citizens under a new Building Bill registered at the Federal Parliament Secretariat. Under the proposal, the federal government would provide Rs 50,000 and the provincial government Rs 25,000. The Infrastructure Development Ministry registered the bill to amend the Building Act, 1998, with the stated objective of ensuring access to housing for citizens and their families. The proposed legislation envisages guaranteed housing for low-income families and safe and organised housing for middle-income households. Nepali citizens constructing their first homes in accordance with government-approved designs and standards would also be eligible to receive certain essential river-based and natural construction materials free of charge. Similar materials would be made available for the construction of livestock sheds. The bill also proposes relocating disaster-affected, unsafe and vulnerable settlements to safer locations and constructing new houses for residents displaced by such risks.
Proposed law sets fines of up to Rs 1.5 million for airlines overcharging passengers
Airlines and individuals who charge passengers fares above government-approved rates during festive peak periods or emergencies could face fines of up to Rs 1.5 million under proposed changes to aviation legislation. Section 47(d) of the Civil Aviation Authority Bill 2026, currently before the Federal Parliament, would classify the sale of air tickets above fares fixed and approved by CAAN as a punishable offence. First-time offenders could be fined between Rs 500,000 and Rs 1.5 million by CAAN’s Director General. Repeat violations would attract a penalty equivalent to twice the fine imposed for the previous offence. The proposed provision is intended to curb excessive fare increases during periods of high demand, including Dashain and Tihar, as well as during emergencies such as floods and landslides, when disruptions to road networks can force travellers to rely on air services. If enacted, airlines would be legally required to comply with CAAN-approved fare ceilings under all operational circumstances.
Govt launches special groundwater irrigation programme for agricultural entrepreneurs
The Department of Water Resources and Irrigation has introduced a special groundwater irrigation programme designed to promote agricultural entrepreneurship, with particular priority for young people returning from foreign employment. The department has prepared guidelines for selecting projects under the Special Groundwater Irrigation Programme for Agricultural Entrepreneurs, which aims to promote sustainable groundwater use, increase agricultural production and productivity, and expand reliable irrigation facilities. Individuals, firms, institutions and groups engaged in agricultural businesses will be eligible for consideration under the programme. Young returnees from foreign employment will receive priority, while women, Indigenous nationalities, Dalits, minorities and people from disadvantaged areas will also be prioritised. The guidelines have been prepared under the Good Governance (Management and Operation) Act with the aim of making project selection and implementation more transparent, objective and effective.
Chemical fertiliser imports hit record high, but farmers still face shortages
Nepal imported a record 538,436 tonnes of chemical fertiliser in fiscal year 2025/26, yet farmers continued to report shortages during the rice planting and weeding seasons. The government spent Rs 39.7515 billion on chemical fertiliser subsidies during the fiscal year, with rising international fertiliser prices increasing procurement costs and putting additional pressure on the subsidy budget. Despite the record import volume, farmers were unable to obtain fertiliser in the quantities they needed. For fiscal year 2026/27, the government has set a target of procuring 550,000 tonnes of fertiliser and allocated Rs 32.46 billion for the purpose. Subsidy expenditure has risen steadily in recent years. The government spent Rs 26.8198 billion to procure 487,000 tonnes in fiscal year 2024/25, compared with Rs 24.3453 billion for 460,719 tonnes in fiscal year 2023/24. The continuing gap between overall imports and availability at the farm level highlights persistent challenges in fertiliser distribution and supply management.
Internet providers to discontinue low-cost, low-speed packages from October 5
Internet service providers in Nepal are set to discontinue their low-cost, low-speed packages from October 5, citing rising operating expenses and higher input costs. The Internet Service Providers Association Nepal said inflation, increased fuel prices linked to tensions in the Middle East, rising fibre costs and sharp increases in the prices of electronic components and chipsets amid the rapid expansion of artificial intelligence have raised operating costs. Providers said these pressures have made it increasingly difficult to maintain low-priced packages. Nepal has made significant progress in internet access over the past 12 years, with fixed broadband penetration and access among the highest in South Asia, while internet services have remained relatively inexpensive by global standards. Internet providers also continued offering essential services during the COVID-19 pandemic and the Bhote Koshi floods. The planned change will affect customers currently using the cheapest and lowest-speed packages.
Festival imports boost revenue at Birgunj Customs Office
Imports of festival-related goods through the Birgunj border point have increased as Dashain, Tihar and Chhath approach, contributing to a rise in daily customs revenue. Traders have stepped up imports of ready-made garments, alcoholic beverages, hosiery, footwear, pulses, food products and electrical goods in anticipation of increased consumer demand during the festival season. The rise in imports has also increased the movement of cargo vehicles through the border and the volume of goods being processed by customs. Birgunj Customs Office has been collecting between Rs 800 million and Rs 1.5 billion in daily revenue in recent days. As of October 1, the office had collected Rs 11.33 billion, against a monthly revenue target of Rs 26.46 billion. Officials expect import activity and customs revenue to remain elevated as the major festivals draw closer.
Startup programme receives more than 10,000 proposals, but only 922 entrepreneurs secure loans
The government allocated Rs 1.4641 billion to the startup programme in fiscal year 2025/26, including Rs 1.4618 billion for recurrent expenditure and Rs 23 million for capital expenditure. A significant portion of the funding was directed towards startup loans, technology-upgrading grants, entrepreneurship training and business promotion services. Under the startup enterprise loan programme, 10,244 project proposals were registered during a 21-day application period. Of these, 8,203 applications were submitted online and 2,041 were registered physically at the office. However, only 922 entrepreneurs ultimately received loans. The large number of applications indicates strong interest in startup ventures and innovation-based businesses among both young entrepreneurs and established businesspeople. The programme was introduced as one of the major initiatives to improve access to finance for businesses based on new ideas, technology and innovation.
Asian Highway project targets 90 percent completion of Kakarbhitta-Laukahi road
The eastern section of the Kakarbhitta-Laukahi road being developed under the Asian Highway project has achieved 52 percent progress in blacktopping, with around four months remaining before the construction contract expires. The project has set a target of completing 90 percent of the work during the remaining period. Road construction is currently progressing at approximately 700 to 800 metres of blacktopping per day. Bridge construction, however, has progressed more slowly, with overall progress reaching 31 percent. Twenty-one bridges are being constructed along the eastern section, including the Ninda, Biring and Kankai bridges, each measuring more than 300 metres. Most small culverts have already been completed, while road upgrading, bridge construction and overpass works are proceeding simultaneously. Motorable overpasses are planned at Charali Chowk, Birtamod and Charpane, while an elephant underpass is planned in the Charali forest area. Six pedestrian crossings are also included in the project. The road is intended to strengthen the major eastern Nepal trade corridor and improve the country’s connection with the international road network.
Parsa Infrastructure Office seeks explanation from contractor over six delayed roads
The Infrastructure Development Office in Parsa has given Shivako Construction Pvt Ltd 15 days to explain why its contracts for six road projects should not be terminated. The office issued a public notice after the Kathmandu-based contractor failed to make meaningful progress on the projects despite repeated verbal and written instructions. The contractor had also failed to implement commitments made during a meeting at the Parsa District Administration Office. According to the office, construction progress remained at zero even after the latest project deadline extensions. The contractor has been asked to appear through an authorised representative and submit evidence explaining the delays, a revised work schedule, a credible plan for mobilising resources, a commitment to completing the projects and reasonable grounds for retaining the contracts. The notice is part of the office’s efforts to enforce contractual obligations and address prolonged delays in the six road projects.
Dodhara suspension bridge inspected after central section collapses
A technical team from the Department of Local Infrastructure Development has inspected the damaged suspension bridge in the Dodhara area after its central section suddenly collapsed, halting movement across the bridge. The inspection focused on assessing the damage caused by the flood, determining the current condition of the bridge and identifying options for immediate repair and reconstruction. The 1,453-metre suspension bridge was constructed at a cost of around Rs 100 million and is regarded as one of the longest bridges in Asia. Construction began in 2001 and was completed in 2004. The bridge was built to connect Dodhara Chandani across the Mahakali River with Mahendranagar and the rest of Nepal. The structure is around 25 years old, and the collapse of its central section has completely disrupted an important local transport link. Officials from the Department of Local Infrastructure Development under the Ministry of Physical Infrastructure and Development are assessing the extent of the damage and determining possible measures to restore the connection.
Biratnagar Podway project moves to DPR preparation after prolonged delay
The Biratnagar-Rani Podway project, which remained stalled for around a year and a half after being approved at the first Koshi Province Investment Summit, has moved into the detailed project report (DPR) preparation stage. Kathmandu Podway Company is preparing to develop an approximately seven-kilometre Podway route connecting Biratnagar bus park with the Rani-Jogbani border road section. The estimated project cost has risen to around Rs 6 billion, from the earlier estimate of Rs 3 billion to Rs 5 billion. The company has deposited a performance guarantee of Rs 6 million, equivalent to 0.1 percent of the estimated project cost, with the provincial government. The project was initially proposed as an ambitious effort to introduce new transport technology in Koshi Province. After an investor withdrew following the Gen Z movement, Kathmandu Podway Company began seeking additional investors to revive the project. The seven-kilometre section is being developed as a pilot project. The company plans to extend the concept to an approximately 83-kilometre Podway route connecting Biratnagar with Bhedetar in Dhankuta if the pilot is successful.
Artificial insemination reaches 10,783 livestock in Tanahun
Artificial insemination services have expanded across Tanahun, with 10,783 livestock receiving the service in fiscal year 2025/26 as part of efforts to improve animal breeds and increase livestock productivity. The programme is being implemented through artificial insemination centres operated by the Veterinary Hospital and Animal Services Expert Centre and local governments. Ten artificial insemination centres are currently operating in the district, with 30 artificial inseminators providing services. The centres performed artificial insemination on 1,910 animals, including 1,345 cows, 564 buffaloes and one pig. Local government-operated programmes covered another 8,873 animals, comprising 4,438 cows, 4,388 buffaloes, 20 goats and 27 pigs. The programme aims to make artificial breeding technology more accessible to farmers while improving livestock breeds and production. Expansion through both district-level veterinary facilities and local governments has helped increase the number of farmers able to access the service.
Global IME Bank approves 10 percent dividend for shareholders
Global IME Bank has approved a 10 percent dividend for shareholders from its profit for fiscal year 2025/26. The bank’s 20th annual general meeting approved the distribution of four percent bonus shares and six percent cash dividends. The bank recorded a net profit of Rs 6.04 billion during the review period, a 15.90 percent increase from the previous fiscal year. Its operating profit stood at Rs 9.60 billion. Following the distribution of the approved bonus shares, the bank’s paid-up capital has reached Rs 39.686 billion. The bank has also said it will focus on expanding in a safe, reliable and balanced manner while increasing investment in digital banking infrastructure to make its services more accessible and convenient.
Siddhartha Bank offers up to 15 percent discount on Daraz purchases
Siddhartha Bank has launched a Dashain campaign in partnership with Daraz, offering customers discounts of up to 15 percent on purchases made through the Daraz app using Siddhartha Bank Visa debit and credit cards. The “10-10 Dashain Dhamaka” campaign runs from October 1 to October 12. Visa debit cardholders can receive a discount of up to 10 percent, capped at Rs 1,000, while Visa credit cardholders can receive up to 15 percent, capped at Rs 1,500. Customers must first collect a Siddhartha Bank voucher from the Bank Voucher section of the Mega Dashain Discount 10.10 campaign on the Daraz app. The voucher is then stored in the customer’s My Vouchers section. To qualify, customers must make purchases worth at least Rs 1,999, apply the relevant voucher and pay using a Siddhartha Bank Visa debit or credit card.
Everest Bank customers to receive up to 15 percent discount at Medanta hospitals
Everest Bank has signed an agreement with Medanta Hospital in New Delhi to provide its customers with discounts on healthcare and diagnostic services. Under the agreement, Everest Bank debit and credit cardholders will receive discounts of up to 15 percent at 13 Medanta hospital locations in New Delhi, Gurugram, Lucknow, Indore, Ranchi and Noida. The offer covers outpatient services, including doctor consultations, laboratory tests and radiology, as well as inpatient services such as bed charges, laboratory services and radiology. It also applies to Medanta’s standard preventive health packages. Customers must pay their hospital bills using an Everest Bank debit or credit card to receive the discount. The offer applies only to eligible services provided at participating Medanta facilities. The agreement is intended to reduce healthcare costs for eligible bank customers and provide them with discounted access to consultations, diagnostic services, inpatient care and preventive health packages.
Kumari Bank customers to receive discounts at Ramada Encore Thamel
Kumari Bank has partnered with Ramada Encore by Wyndham in Thamel to provide its customers with special discounts on hotel and restaurant services. Under the agreement, bank customers will receive discounts of 15 to 20 percent on food and beverages and spa services. Instalment payment facilities will also be available for selected hotel services. Customers spending at least Rs 15,000 annually will receive a complimentary birthday cake, while cake and corkage charges will be waived for family gatherings and events. Customers spending Rs 50,000 annually at the restaurant will also receive a complimentary one-night room stay. Additional discounts will be available on the Family Day Out Package and Family Stay Package. Kumari Bank currently operates through a nationwide network of 279 branches, 295 ATMs, 41 extension counters and 40 branchless banking units.
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