KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape reflects a mixed but cautiously stabilizing outlook, with modest gains in the NEPSE index indicating tentative investor confidence despite moderate turnover and uneven sectoral performance.
At the policy level, the government is actively intervening to address structural challenges—approving large-scale fertilizer imports, reforming salary payments, mandating infrastructure insurance, and initiating cooperative deposit refunds—yet persistent implementation gaps remain evident in issues like fertilizer distribution and customs disruptions at Birgunj.
While infrastructure progress and tourism recovery, particularly in the Annapurna region, signal positive momentum, deeper concerns persist, including a struggling construction sector threatening protests, rising labor migration driven by weak domestic job markets, and regulatory bottlenecks affecting trade.
Overall, the developments point to an economy in transition, where policy efforts are substantial but outcomes remain uneven due to execution challenges and underlying structural weaknesses.
NEPSE edges up 8.78 points amid moderate turnover
The NEPSE index increased by 8.78 points (0.32 percent) to close at 2,712.86 on Tuesday, while the Sensitive Index rose by 1.26 points to 462.32. A total of 7,734,012 shares of 335 companies were traded through 62,025 transactions, generating a turnover of Rs 3.439 billion. Share prices of 162 companies advanced, 90 declined, and 16 remained unchanged. Among sectoral indices, seven recorded gains while six declined. Hydropower led the rise with a 1.02 percent increase, followed by manufacturing and banking, whereas microfinance, finance and trading posted slight losses.
Cabinet approves import of 80,000 metric tons of fertilizer from India
The Council of Ministers has granted in-principle approval to Krishi Samagri Company Limited to procure 80,000 metric tons of chemical fertilizer from India under a government-to-government agreement. This includes 60,000 metric tons of urea and 20,000 metric tons of DAP to address supply shortages. Although 440,000 metric tons have already been imported this fiscal year, current stock stands at 166,000 metric tons. The government estimates a requirement of 250,000 metric tons for the upcoming paddy season and has allocated Rs 28.821 billion for fertilizer.
Gold and silver prices decline in domestic market
Gold and silver prices fell in the domestic market, according to the Federation of Nepal Gold and Silver Dealers’ Association. Gold dropped by Rs 3,800 per tola to Rs 291,000, while silver decreased by Rs 150 to Rs 4,880 per tola. Both metals saw a noticeable decline compared to the previous day’s trading rates.
Govt to begin refunding deposits of troubled cooperatives
The Troubled Cooperatives Management Committee is set to start returning deposits to affected members from mid-May. Around 76,000 depositors are owed nearly Rs 46 billion, with priority given to those holding less than Rs 500,000. About 18,000 are classified as large depositors. A new application window will open in mid-July for those who missed earlier deadlines, and a revolving fund may be used if internal resources fall short.
Govt rolls out bi-monthly salary system for public employees
The government has introduced a major reform in the payroll system, shifting to a twice-monthly salary and allowance payment structure for all federal civil servants and security personnel. After piloting the system at the Ministry of Finance, the Financial Comptroller General Office on May 4 instructed all District Treasury and Controller Offices to implement the change. Employees will now receive payments every 15 days instead of waiting until month-end, aiming to improve liquidity and modernize administrative financial practices.
Mandatory insurance for public infrastructure introduced through ordinance
An ordinance amending the Insurance Act has made insurance compulsory for all public infrastructure projects. Specific provisions will be outlined through regulations. The board of the Nepal Insurance Authority has also been expanded from five to six members, adding a technical Joint Secretary from the Ministry of Physical Infrastructure and Transport. Existing members include representatives from the Ministry of Finance and the Ministry of Law. The amendment also adds “engineering” to the professional qualifications required for the Authority’s leadership.
Troubled cooperatives body urges borrowers to repay dues
The Troubled Cooperatives Management Committee has directed borrowers of crisis-hit cooperatives to immediately settle outstanding loans, including principal, interest and penalties, under Section 104 of the Cooperatives Act, 2017. Directors, managers and guarantors have also been asked to contact the committee. The move is aimed at recovering funds and ensuring repayment to depositors through legal processes.
Defense ministry reports over 80 percent quarterly progress
The Ministry of Defense has achieved more than 80 percent progress in its quarterly targets. Projects such as the Koshi Corridor, Karnali Road and Benighat–Arughat–Larkebhanjyang Road recorded full physical progress, while the Mahakali Corridor reached nearly 83 percent and the Chure Conservation Program 80 percent. However, the Kathmandu–Terai Fast Track and National Defense University lag behind at 34.4 percent and 35.73 percent respectively, with funding gaps and coordination issues cited as key challenges.
Annapurna region sees over 250,000 foreign visitors in nine months
The Annapurna Conservation Area recorded 251,188 international tourists between July 2025 and April 2026. March saw the highest arrivals, while July had the lowest. Visitors from South Asia, especially India, made up the largest share. Tourist numbers have steadily risen in recent years, with key attractions including Annapurna Base Camp, Tilicho Lake and Thorong La Pass.
Tourism department makes permits mandatory for adventure sports
The Department of Tourism has directed all operators of adventure and recreational activities to obtain registration and licenses within 30 days. The rule covers activities such as bungee jumping, canyoning, skydiving, ziplining, jet skiing and motorboating. The move aims to regulate the sector under existing laws and ensure safety standards, with legal action warned against non-compliant operators.
MRP enforcement disrupts operations at Birgunj customs
Operations at Birgunj Customs have been disrupted for a week following the enforcement of mandatory Maximum Retail Price (MRP) labeling on imports. Except for essential goods like petroleum and perishables, clearance has stalled as importers resist compliance. Around 1,400 cargo vehicles are stranded near the Raxaul border, resulting in daily revenue losses estimated at Rs 500–600 million.
Construction sector warns of nationwide strike amid economic strain
The Federation of Contractors’ Associations of Nepal (FCAN) has cautioned that the construction sector is nearing a crisis point due to low capital expenditure and rising material costs. With only 27 percent of the capital budget spent this fiscal year, around 32,000 contractors are under severe financial pressure. Prices of key inputs have surged, with diesel increasing from Rs 139 to Rs 225 per litre and bitumen from Rs 75 to Rs 155 per kilogram since February. Many major projects have stalled under force majeure conditions. FCAN has demanded immediate price adjustments and deadline extensions, warning of a nationwide halt in construction and protests if decisions are not taken within a week.
Nagdhunga–Sisnekhola tunnel set for mid-July opening
The Nagdhunga–Sisnekhola tunnel is expected to come into operation by mid-July, following directions from the Infrastructure Development Committee. Despite four deadline extensions since construction began in September 2019, the project has reached 99 percent completion at a cost of Rs 22 billion. The 2.688-kilometre tunnel includes modern features such as smart lighting, CCTV surveillance, and automated ventilation. Once operational, it will cut travel time between Sisnekhola and Balambu to about seven minutes. Authorities estimate annual revenue of Rs 350 million, with around 60 percent of traffic likely to shift to the tunnel route.
Former Smart Telecom chief arrested on fraud charges
The Central Investigation Bureau (CIB) has arrested Sarvesh Joshi, former Managing Director of Smart Telecom, on allegations of fraud and criminal breach of trust. He was detained in Khursanitar, Kathmandu. The case follows the cancellation of Smart Telecom’s licence in April 2023 and the subsequent seizure of its assets by the Nepal Telecommunications Authority. Joshi is accused of attempting to unlawfully transfer these assets, prompting an ongoing investigation.
Lack of domestic opportunities pushes workers abroad
A growing number of Nepalis continue to seek foreign employment due to limited job opportunities and low wages at home. In the past month alone, 62,265 individuals left the country for work abroad. Youth unemployment stands at 12.7 percent, while labour force participation is just 37.5 percent. The government’s “Shram Sansar” platform, launched in 2024 to connect job seekers with employers, has seen minimal success, with only nine placements out of nearly 97,000 applicants. Workers cite delayed payments, job insecurity, and lack of social protection as key reasons for migration.
Favourable rains boost maize production prospects in Udayapur
Consistent rainfall during March and April has raised hopes for increased maize production in Udayapur. Farmers across both Terai and hilly areas have benefited from improved conditions for planting and weeding over 11,000 hectares of farmland. Experts estimate that yields could rise by up to 20 percent if the favourable weather continues. The rainfall has been especially beneficial for hillside farms that typically face water shortages.
Fertilizer shortage persists despite available stock
Farmers in Kanepokhari Rural Municipality, Morang, faced shortages of fertilizer despite existing stockpiles, highlighting distribution challenges. Many returned empty-handed after limited supplies—about 45 sacks—were quickly exhausted. National demand stands at 750,000 metric tons annually, while supply is around 500,000 metric tons. In Morang, only 243 of the allocated 405 metric tons have been distributed, pointing to inefficiencies in supply management and delays in releasing buffer stock.
Kalanga Hydro to launch IPO for general investors
Kalanga Hydro Limited is preparing to open its IPO for the general public from May 22 to May 27. The company plans to issue 2.8 million shares worth Rs 287 million, part of its 4.9 million-share offering. Shares have already been distributed to local residents and Nepalis working abroad. Investors can apply for a minimum of 10 units.
Shekhar Golchha released after court denies detention extension
Businessman Shekhar Golchha has been released after the Kathmandu District Court declined to extend his remand in an insurance-related case. He had been re-arrested shortly after being freed on Rs 500,000 bail in a separate securities case, following a Supreme Court order. The court’s refusal to grant further detention led to his release from custody.
FNCCI leadership election process concludes
Voting for new leadership positions within the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has concluded at the Nepal Academy. The election followed the organisation’s 60th Annual General Meeting in Lalitpur, with candidates competing for vice-presidential and central committee roles. Senior Vice President Anjan Kumar Shrestha is set to assume the presidency, succeeding current President Chandra Prasad Dhakal.
Final day to apply for Yambaling Hydropower IPO
Today marks the deadline for public applications to the initial public offering (IPO) of Yambaling Hydropower Company. The company is issuing 2.8 million shares, representing 40 percent of its Rs 700 million capital. After allocations to locals and migrant workers, 1.743 million shares remain available to the public. Applications range from a minimum of 10 units to a maximum of 21,000 units.
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