KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economy presents a mixed picture, with strong liquidity, rising remittance inflows, growing infrastructure investment, and a tourism surge contrasting with weak private-sector demand and market sentiment. The decline in NEPSE and lower trading volume reflect investor caution despite robust banking deposits exceeding Rs 8 trillion, driven largely by remittances rather than credit expansion.
Policy measures in the new budget—including eased financing rules for reservoir hydropower projects, higher duty-free customs allowances, and incentives for energy development—signal a push toward long-term growth and investment.
At the same time, challenges persist, including disruptions to tea exports caused by Indian customs restrictions, storm-related power supply problems in Karnali, and concerns over customs compliance and business regulation.
Rapid growth in electric vehicle adoption, increased hydropower investment, and record religious tourism traffic through Simikot indicate emerging economic opportunities, but sustaining momentum will depend on improving domestic investment confidence, resolving trade bottlenecks, and ensuring effective implementation of infrastructure and energy projects.
NEPSE declines 13.46 points amid lower trading volume
The Nepal Stock Exchange (NEPSE) fell by 13.46 points, or 0.48 percent, on Thursday to close at 2,766.78 points. The Sensitive Index also dropped 1.67 points to 473.76. A total of 10.61 million shares of 353 companies were traded through 51,601 transactions, generating a turnover of Rs 4.703 billion, down from Rs 5.738 billion recorded the previous day. Market performance remained largely negative, with only 63 companies posting gains, while 198 declined and eight remained unchanged. Among the 13 sectoral indices, only the Mutual Fund group ended in positive territory, while sectors such as trading, non-life insurance, and hotels and tourism recorded the steepest losses.
Gold and silver prices decline
Precious metal prices fell slightly in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold prices dropped by Rs 200 per tola to Rs 311,100, compared to Rs 311,300 a day earlier. Silver prices also declined, falling by Rs 85 per tola to Rs 5,285 from Wednesday’s rate of Rs 5,370 per tola.
Government raises duty-free customs allowances
The Ministry of Finance has revised customs regulations, increasing the duty-free threshold for personal goods brought through land border crossings from Rs 100 to Rs 500. The updated policy also grants migrant workers who have spent at least 12 months abroad the right to import one television set of up to 65 inches without paying customs duties. Air travelers are now allowed to carry one power bank duty-free. The regulations further permit women to bring up to 50 grams of gold jewelry and men up to 25 grams without customs charges. Foreign visitors can export locally produced goods worth up to Rs 500,000 upon presenting VAT invoices.
Banking sector deposits exceed Rs 8 trillion
According to Nepal Rastra Bank (NRB), total deposits held by banks and financial institutions crossed Rs 8 trillion, reaching Rs 8.14 trillion as of May 28, 2026 (Jestha 14, 2083 BS). Strong remittance inflows contributed significantly to the growth, with remittances rising 39 percent year-on-year to Rs 1.659 trillion during the first nine months of the fiscal year. Meanwhile, demand for credit remained subdued, with total lending standing at Rs 5.898 trillion. As a result, average deposit interest rates declined to 3.40 percent. To manage excess liquidity estimated at Rs 1.3 trillion, the central bank absorbed more than Rs 1 trillion through short-term deposit collection instruments carrying interest rates between 2.68 percent and 3 percent.
Budget eases investment rules for reservoir hydropower projects
The government has introduced policy changes in the fiscal year 2026/27 budget to facilitate financing for large reservoir-based hydropower projects. As part of its long-term energy strategy, Nepal aims to generate 28,500 megawatts of electricity by 2035 to meet domestic demand and expand exports to India and Bangladesh. Under the revised provisions, hydropower developers can issue up to 40 percent of project shares in the first year, provided they secure full equity investment. Data from the Department of Electricity Development shows that 27 developers have applied for licenses to generate 9,487.1 megawatts through reservoir projects, with the Nepal Electricity Authority overseeing projects totaling 2,811.5 megawatts.
Vehicle registrations surpass 6.2 million nationwide
The Economic Survey 2026/27, citing the Department of Transport Management, shows that the total number of registered vehicles in Nepal reached 6.25 million by mid-March 2026. During the current fiscal year alone, 281,921 new vehicles were registered, including motorcycles, cars, buses, and trucks. Motorcycles account for more than 80 percent of the total vehicle fleet, exceeding five million units. The report also highlights rapid growth in electric vehicle adoption, with EV imports rising from 2,450 units in fiscal year 2019/20 to 44,509 units in 2024/25. The total includes 12,588 electric cars and 11,320 electric two-wheelers, most of which were imported from China.
Karnali plans 20 MW hydropower project through public investment
The Karnali Provincial Government has announced plans to develop a 20-megawatt run-of-river hydropower project through a public-private investment model. Under the initiative titled “Karnali’s Water, Public Investment,” funding will be raised through share offerings targeted at residents of the province. The government also plans to support the ongoing Jagadulla A Hydropower Project through local investment mechanisms. Provincial policy documents indicate future investments in solar, wind, micro-hydropower, and mini-grid systems to strengthen regional energy infrastructure.
Indian customs restrictions disrupt Nepal tea exports
More than 200 tonnes of processed Nepali tea remain stranded in warehouses in Siliguri and Kolkata due to stricter customs procedures introduced by the Indian Tea Board. Following a 19-day import suspension that began on May 1, trade partially resumed on May 19 under revised inspection requirements. However, delays in laboratory testing continue to hinder market access. The Suryodaya Tea Producers Association said tea samples submitted for quality testing have remained pending beyond seven days. Exporters face additional costs, including storage charges and testing fees of up to INR 15,000 if samples require secondary verification.
Storm damage disrupts Surkhet transmission line
Repairs to the Kohalpur-Surkhet 132 kV transmission line are expected to take another two weeks after a powerful storm brought down a transmission tower in Banjanath Rural Municipality. According to technicians, a 38-meter sal tree fell onto the line near Chisapani, causing the damage. Reconstruction work is underway, with foundation work already completed. In the meantime, electricity is being supplied through an older 33 kV backup line via Kohalpur and Lamki, resulting in low voltage and repeated transformer outages across parts of Karnali Province.
Simikot Airport records 170 flight movements in a single day
Simikot Airport in Humla witnessed a record 170 aircraft and helicopter movements on Wednesday, largely driven by religious tourism. According to airport data, 58 fixed-wing flights operated on the Nepalgunj–Simikot–Nepalgunj route, while 112 helicopter services ferried passengers between Simikot and Hilsa. Over the past three weeks, 2,124 tourists entered the district using services provided by Sita Air, Tara Air, and Summit Air, operating six airplanes and six helicopters. Most of the visitors were Indian pilgrims traveling through Humla en route to Mount Kailash in Tibet.
APF seizes electric vehicles over customs irregularities
The Armed Police Force (APF) has confiscated 774 electric vehicles suspected of being involved in customs-related violations. The vehicles were seized during operations conducted on Wednesday along key transit routes in Jomsom, Kushma, and Hemja. The operation involved personnel from multiple APF units stationed in Mustang, Myagdi, Parbat, and Kaski districts. Authorities also seized two cargo trucks on the Pasang Lhamu Highway in Nuwakot. All confiscated vehicles have been handed over to customs offices for further investigation.
Monsoon conditions disrupt Pokhara–Jomsom air services
Commercial flights on the Pokhara–Jomsom route have been suspended for the monsoon season due to unfavorable weather conditions and a decline in passenger demand. Tara Air halted operations on May 22, while Summit Air suspended services on June 2. Tara plans to resume flights in September, while Summit aims to restart services on August 15. The Jomsom Civil Aviation Office said aircraft previously operating on the route have been reassigned to the Simikot sector to serve growing numbers of Indian pilgrims heading to Mount Kailash and Lake Manasarovar. Charter flights and helicopter services will continue during the off-season. At peak times, the route handled up to 10 flights daily and around 150 passengers per day.
Nine businesses fined for consumer protection violations
The Department of Commerce, Supplies and Consumer Protection imposed penalties on nine businesses following market inspections conducted on Wednesday. Authorities found violations of consumer protection regulations and ordered corrective measures in addition to fines. Town Boys & Girls Hostel in Lalitpur was fined Rs 50,000 for operating without renewing its registration. Other penalties included Rs 20,000 against Blue Fox Restaurant in Jawalakhel, Rs 10,000 against Shambhala Home in Boudha, and Rs 5,000 against Cold & Hot Spicy Noodles. Five other businesses received warnings.
Government cuts export duty on pine firewood
The government has reduced the export customs duty on pine firewood from 50 percent to 20 percent under the new Finance Bill. The revised rate came into effect on May 30, while the 50 percent export duty remains unchanged for other timber products. According to the Plywood Manufacturers Association, pine wood supplies around 10–15 percent of the raw materials used by domestic plywood industries, which primarily depend on alder wood. Existing regulations continue to allow exports of processed wood products such as briquettes, pellets, timber chips, sawdust blocks, and branches.
Traffic police fine 2,445 motorists in 24 hours
The Kathmandu Valley Traffic Police Office reported that 2,445 drivers were penalized for various traffic violations over the past 24 hours, generating Rs 2.2 million in revenue. Among those cited, 128 were caught driving under the influence, 160 were involved in unauthorized ride-sharing operations, 141 violated traffic signals, and 183 were found speeding. Other offences included 43 lane-discipline violations, 123 cases of unnecessary horn use, 14 incidents of footpath parking, and 166 one-way traffic violations. A further 1,487 motorists were booked for other traffic-related offences.
Rasuwa businesses instructed to renew operating permits
The District Treasury and Controller Office in Rasuwa has directed local businesses to update their licensing documents before selling excise-regulated products. Authorities found that several businesses in Dhunche, Syaphrubesi, Timure, Thambuchet, Betrawati, Jibjibe, and Parchyang were selling alcohol, tobacco, and gutkha without proper authorization. Official records show that only a limited number of businesses across local municipalities currently possess valid permits. Traders have been instructed to obtain a Permanent Account Number (PAN) from the Galchhi Inland Revenue Office before securing the required licenses. Excise revenue in the district totaled Rs 899,750 between mid-July 2025 and mid-April 2026.
Tribhuvan University recovers Rs 104.6 million from absent faculty
Tribhuvan University (TU) has recovered Rs 104.6 million from academic staff who failed to return after taking study leave funded by public resources. The recovery followed joint audits conducted by the Ministry of Education, Science and Technology to assess governance, financial accountability, and institutional compliance within universities. Investigators found that several faculty members had traveled abroad using state-funded scholarships and grants but did not return to fulfill their contractual teaching obligations. TU said it is continuing efforts to recover additional funds from other staff members who remain absent.
Machhapuchchhre Bank lists Rs 3 billion worth of preference shares
Machhapuchchhre Bank Limited has listed 3 million preference shares on the Nepal Stock Exchange (NEPSE), valued at Rs 3 billion. The shares, issued at a face value of Rs 100 each, represent the bank’s 8.25 percent non-cumulative, non-convertible preference share offering and are now available for secondary market trading.
Mount Everest Power Development to launch IPO on June 17
Mount Everest Power Development Company has announced that it will open its Initial Public Offering (IPO) to the general public on June 17. The company plans to issue shares equivalent to 30 percent of its authorized capital of Rs 860 million. Prior allocations were made to local residents, foreign-employed Nepalis, employees, and mutual funds. The public offering will consist of 1.4276 million shares priced at Rs 100 each. Applications will remain open from June 17 to June 22, with a possible extension until July 1. NIMB Ace Capital has been appointed as the issue manager.
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