KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economic landscape currently reflects a mix of cautious financial conditions, policy adjustments, and structural bottlenecks. Weak credit demand and excess liquidity—evident from Nepal Rastra Bank’s continued liquidity absorption—align with a subdued stock market and declining turnover on the Nepal Stock Exchange, signaling soft investor confidence.
At the same time, rising gold prices and food security risks—driven by fuel costs, fertilizer shortages, and a weak monsoon outlook—point to underlying inflationary pressures. While the government is attempting reforms through EV tax restructuring, digital customs systems, and decentralization of land services, persistent issues such as customs disputes, revenue shortfalls in local governments, and infrastructure gaps continue to constrain growth.
Sectorally, there are pockets of momentum—tourism revenues from Mount Everest, industrial activity in SEZs, and agricultural price gains—but these are uneven and often reactive rather than systemic. Overall, the economy appears to be in a transitional phase, balancing reform efforts and localized gains against broader structural vulnerabilities and external shocks.
NEPSE edges down as trading turnover declines
The Nepal Stock Exchange (NEPSE) slipped by 1.64 points on Wednesday, closing at 2,711.22. Daily turnover also fell to Rs 3.197 billion, down from Rs 3.439 billion the previous day. The sensitive index saw a marginal increase of 0.80 points to reach 463.12, while sectoral performance remained mixed. Out of 336 traded companies and more than 47,000 transactions, 104 stocks advanced while 149 declined. Eight of the 13 sector indices registered gains, led by mutual funds and microfinance, whereas development banks, hydropower, and manufacturing sectors recorded losses.
NRB withdraws Rs 20 billion to manage excess liquidity
Nepal Rastra Bank (NRB) carried out a deposit collection auction on Wednesday to absorb Rs 20 billion from the banking system for 44 days, aiming to address surplus liquidity amid weak loan demand. Banks and financial institutions under Classes A, B, and C took part in the bidding, which concluded at 3:00 PM, with a minimum bid set at Rs 100 million. These instruments can also be used as collateral for other financial dealings. The central bank has been conducting similar liquidity absorption operations twice a week over the past three years to maintain market stability.
Gold and silver prices rise in domestic market
Gold prices increased in the Nepali market on Wednesday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price rose by Rs 5,800 per tola, reaching Rs 296,800, up from Rs 291,000 on Tuesday. Silver prices also climbed, rising from Rs 4,880 per tola to Rs 5,055.
Government plans to revise EV tax policy based on value and size
The government is preparing to reform its electric vehicle (EV) taxation system by shifting from motor capacity (kilowatts) to a structure based on vehicle value and size in the upcoming budget. The move follows findings by the Office of the Auditor General that Rs 3.77 billion in revenue was lost due to underreporting of motor capacity. Currently, EVs between 50 and 100 kW are taxed at 15 percent customs duty and 10 percent excise, while those above 100 kW face 20 percent for both. The proposed change aims to simplify taxation and curb evasion, while supporting a target of 90 percent EV adoption by 2035.
Customs deadlock continues over mandatory MRP labeling in Biratnagar
Goods clearance at Biratnagar Customs Office has been stalled for eight days due to disagreements over compulsory Maximum Retail Price (MRP) labeling. While customs officials insist on enforcement, importers argue that the Consumer Protection Act, 2018 assigns labeling responsibility to importers or producers, not foreign exporters. Currently, only products with pre-printed MRP labels are being released. Business leaders warn that prolonged delays at border points and Kolkata port could lead to shortages in the market. Revenue collection has also declined as traders adopt a cautious approach.
Ministries push for faster project execution and immediate price adjustments
The Ministry of Physical Infrastructure and Transport and the Ministry of Urban Development have instructed their subordinate bodies to speed up construction works and resolve implementation bottlenecks. Agencies have been directed to eliminate delays and submit regular progress reports. The ministries have also ordered the prompt application of price adjustment provisions as outlined in contracts to cope with rising costs. Project heads will be held accountable for delays or lack of progress. The directive aims to strengthen coordination and ensure timely completion of development projects.
Government launches online system for foreign vehicle permits
The Department of Customs under the Ministry of Finance has introduced an online system to facilitate the entry of foreign vehicles, particularly benefiting tourists from India and Bangladesh. The system was inaugurated by Finance Minister Dr. Swarnim Waglé. Travelers can now submit vehicle details and pay required fees online before arriving at the border. Under the Temporary Import Vehicle (TIV) module of the National Single Window, users receive a QR code via email for verification at entry points, simplifying the process and improving transparency.
Dirghayu Shrestha appointed Acting Managing Director of NEA
Dirghayu Shrestha has been named acting managing director of the Nepal Electricity Authority (NEA). The appointment was made by Minister for Energy, Water Resources, and Irrigation Biraj Bhakta Shrestha. Previously serving as deputy managing director of the Distribution and Consumer Services Directorate, he replaces Hitendra Dev Shakya, who stepped down following the implementation of the Special Provisions on Dismissal of Public Officials Ordinance, 2026. The change is part of broader administrative reforms.
Local banana prices rise as imports from India decline in Baglung
Banana farmers in Baglung are experiencing higher demand and rising prices due to reduced imports from India. Farm-gate prices have increased from Rs 70 per dozen to between Rs 100 and Rs 120, while retail prices range from Rs 120 to Rs 180. Previously, around 100 cartons of Indian bananas entered the market daily. Farmers in areas like Jaimini Municipality and Nayapul now report that traders are purchasing directly from orchards. Jaimini Municipality has also launched initiatives to promote banana farming as an alternative to traditional crops.
Government allocates Rs 200 million for Bhanu literature park in Tanahun
The Department of Urban Development and Building Construction has earmarked Rs 200 million in the current fiscal year to develop Chudi Ramgha in Bhanu Municipality as a literary tourism destination. The Bhanu Literature Park project involves acquiring 435 ropanis of land, with a total estimated cost of Rs 1 billion. Planned features include a 54-foot statue of Adikavi Bhanubhakta Acharya, a traditional museum building, a literary village, a botanical garden, and a sculpture gallery. About Rs 18 million has already been spent on preliminary work.
Local governments authorized to handle land registration and transfers
The government has amended the Land Revenue Act, 1977 through an ordinance, renaming Land Revenue Offices as Land Administration Offices. Under the revised provisions, local governments can now establish units to manage land registration, ownership transfers, and property restrictions. These offices will coordinate with Survey Offices for map updates when necessary. More than 200 local bodies have shown interest in offering these services. Additionally, property transactions exceeding Rs 30 million must now be conducted through licensed companies to reduce intermediaries.
Food quality department warns against use of damaged water jars
The Department of Food Technology and Quality Control has cautioned producers and distributors of bottled drinking water against using old, dented, or opaque containers. The department stated that such practices pose serious health risks, particularly during summer and the rainy season when waterborne diseases are more common. Suppliers have been instructed to maintain hygiene standards and phase out defective packaging. Non-compliance will result in legal action under the Food Hygiene and Quality Act, 2024.
Mt. Everest royalties cross Rs 1 billion this climbing season
The Department of Tourism has reported that royalty earnings from Mt. Everest alone have surpassed Rs 1.01 billion in the current climbing season as of Tuesday. A total of 464 climbers from 47 expedition groups have secured permits for the world’s highest peak. Overall, the government has collected Rs 1.17 billion from 1,072 climbers across 29 peaks. The increase in revenue is largely due to higher royalty rates introduced last autumn. Climbers from 79 countries are participating, with China (139) and the USA (132) accounting for the largest numbers.
Biratnagar metropolis struggles as major institutions default on taxes
Biratnagar Metropolitan City is facing difficulties in mobilizing internal revenue as several large businesses and government entities have failed to pay institutional rent and property taxes. Despite a Supreme Court verdict on June 3, 2025, affirming local governments’ authority to collect such taxes, revenue collection has dropped to Rs 370 million as of April 29, compared to Rs 385 million last year. Key defaulters include Nepal Food Corporation (Rs 52.1 million) and Nepal Electricity Authority (Rs 38.7 million). As a result, the city has revised its annual revenue target downward from Rs 1.4 billion to Rs 1.1 billion.
Anjan Shrestha assumes presidency of FNCCI
Anjan Shrestha has formally taken over as President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Following the 60th Annual General Meeting and vote count, he moved into the role from senior vice president as per the organization’s statute. Krishna Prasad Sharma and Dilsundar Shrestha were elected vice presidents representing district and municipal categories, while Naresh Lal Shrestha and Prabal Jung Pandey secured positions in the commodity and associate categories. This will be the last time the presidency is filled through automatic succession before returning to direct elections.
Fuel costs, fertilizer shortage, and weak monsoon threaten food security
Rising global fuel prices linked to the West Asia conflict are increasing transportation and agricultural costs in Nepal, forcing producers to raise food prices. At the same time, shortages of fertilizer and supply disruptions are likely to reduce agricultural output, while forecasts of a weak monsoon add further uncertainty. Nepal’s dependence on imported fuel, fertilizer, and seeds is intensifying the situation, with inflation rising and production costs climbing. Economists warn that the full impact may become evident in the coming months as existing supplies run out, potentially leading to a wider food crisis, reduced purchasing power, and greater hardship for low-income and remote communities.
Electric van service launched for tourists in Lumbini
The Lumbini Development Trust has introduced an electric van service to improve transportation for pilgrims and tourists within the Greater Lumbini Area. The service connects key religious and historical sites, including Lumbini, Kapilvastu, Devdaha, and Ramgram, using eco-friendly vehicles. Of the 14 vans received from the Asian Development Bank, 12 are currently in operation. Initially, fares are set per kilometer, similar to local taxi rates, but without additional flag-down or waiting charges. The initiative follows a High Court order issued in March 2025 that resolved legal issues regarding vehicle registration plates.
Production begins at Simara special economic zone
Industrial operations have started at the Simara Special Economic Zone (SEZ) following government implementation of the SEZ program. Out of 833 bighas under the authority, six industries are currently operating in Block A, which covers 343 bighas. These include Pashupati Ceramics, Brilliant Shoe, Balaji Manufacturing, Nepal Agro Tools, ACM Vehicles, and Biokalpa Nepal. More than 700 jobs have been created so far. In addition, over a dozen industries are under construction with investments ranging from Rs 20 million to Rs 2 billion.
Poor infrastructure limits tourism growth in Jumla
Jumla, known as the birthplace of the Nepali language and Khas civilization, continues to face challenges in developing its tourism sector due to inadequate infrastructure. Weak road connectivity, limited communication services, and a lack of basic facilities have hindered growth. While more than 7,000 visitors have recently visited the Chandanath-Bhairavnath Temple, other attractions remain underdeveloped. Sites such as Gidi Daha Lake, Akashe Lake, and Shankar Waterfall lack proper trails and promotion. Despite the construction of Nepal’s second-largest Buddhist stupa at a cost of Rs 290 million, stakeholders say insufficient investment from provincial and local authorities continues to restrict tourism potential.
Court extends custody of Bhatta and Agrawal in money laundering case
The Special Court has allowed authorities to keep businessmen Deepak Bhatta and Sulav Agrawal in custody for an additional 12 days as part of an ongoing money laundering investigation. The decision was made by a bench comprising Judges Hemanta Rawal, Dilliratna Shrestha, and Bidur Koirala. This marks the fifth extension for Bhatt and the sixth for Agrawal. Investigators have been granted more time to collect evidence and continue questioning.
Pokhara to distribute subsidized rice seeds to farmers
Pokhara Metropolitan City plans to distribute 7,500 kilograms of rice seeds to farmers at a 50 percent subsidy this year. Although demand reached 21,000 kilograms, the Agriculture Development Division can only supply part of it. Seeds are purchased from local farmers at Rs 200 per kilogram and sold at Rs 100. The distribution includes Ram rice and the popular Pokhareli Jethobudho variety. The city is also promoting traditional varieties such as Anadi and Pahele to support biodiversity through its conservation programs.
Power restored in Syangja after 65-hour outage
Electricity supply in Waling and Bhirkot municipalities of Syangja has been restored after a 65-hour disruption caused by lightning damage to a transformer. The outage affected around 13,000 consumers, including essential services. As repairs to the damaged transformer would take more than three weeks, authorities arranged an alternative by installing a 3 MVA transformer from the Nepal Electricity Authority’s Hetauda office on a temporary basis. This coordination helped restore power quickly while permanent repairs continue.
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