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 improving policy momentum but persistent structural challenges. While the government is pushing ahead with economic reforms through private sector engagement, a Rs 20 billion bond issuance, tighter revenue mobilization, and provincial budget implementation, investor sentiment weakened as the NEPSE erased its previous gains despite higher trading activity.
The central bank maintained an accommodative monetary stance, yet sluggish private sector credit growth and rising non-performing loans continue to signal underlying financial stress. At the same time, efforts to diversify tea and coffee exports, attract new industrial investment, upgrade infrastructure, and strengthen regulatory frameworks indicate a focus on long-term growth.
However, unresolved issues—including hydropower sector disputes, health insurance funding gaps, agricultural challenges, and border logistics bottlenecks—underscore the need for more effective policy implementation to translate reform initiatives into sustained economic recovery.
NEPSE drops 30.09 points as turnover reaches Rs 4.83 billion
The Nepal Stock Exchange (NEPSE) index fell by 30.09 points, or 1.13 percent, on Wednesday to close at 2,621.59, erasing the previous day’s gains. Daily turnover increased to Rs 4.83 billion, with 8.46 million shares of 362 companies traded through 77,627 transactions. Only 25 stocks advanced, while 247 declined and five remained unchanged. Mutual funds were the only sector to post gains, while the remaining 12 sectoral indices closed lower. NMB Debenture was the day’s top gainer, Corporate Development Bank recorded the steepest decline, and KBL Debenture led trading with a turnover of Rs 623.9 million.
NRB invites bids for Rs 20 billion development bond
Nepal Rastra Bank (NRB) has invited online bids for its “Bond 2084 Cha” worth Rs 20 billion. According to a public notice issued on Wednesday by the NRB’s Monetary Management Department, only Class ‘A’, ‘B’, and ‘C’ banks and financial institutions licensed by the central bank are eligible to participate. Bidders must specify both the amount they wish to purchase and the interest rate they are offering, which may be quoted up to four decimal places. The minimum bid has been set at Rs 50 million, while bids can be submitted in multiples of Rs 50 million up to the full issue size of Rs 20 billion.
Finance minister directs officials to achieve Rs 1.6 trillion revenue target
Finance Minister Swarnim Wagle has instructed customs and inland revenue authorities to intensify efforts to meet the government’s revenue collection target of Rs 1.6 trillion. During a meeting with newly appointed Director General of the Department of Customs Yam Lal Bhusal, Inland Revenue Department Director General Bhishma Kumar Bhusal, and Department of Customs Deputy Director General Prem Prasad Acharya, Wagle emphasized the need to curb revenue leakage and improve voluntary tax compliance. He also urged officials to maintain transparency and integrity while assuring them of the ministry’s full support in achieving the target.
Prime Minister Shah discusses economic reforms with private sector
Prime Minister Balendra Shah (Balen) held discussions with leaders of the private sector at the Office of the Prime Minister and Council of Ministers on Wednesday to accelerate economic reforms. The meeting focused on improving the investment climate, simplifying bureaucratic procedures, creating employment opportunities, and strengthening business confidence. Shah reiterated that the government considers the private sector a key partner in the country’s development and is committed to addressing challenges faced by businesses. The meeting was attended by Federation of Nepalese Chambers of Commerce and Industry President Anjan Shrestha, Confederation of Nepalese Industries representative Rajesh Kumar Agrawal, and Nepal Chamber of Commerce President Kamlesh Kumar Agrawal.
Koshi Province Assembly passes budget and finance bills
The Koshi Province Assembly on Wednesday passed the Appropriation Bill, 2026, authorizing government expenditure from the provincial consolidated fund for the fiscal year 2026/27. The bill was approved by a majority after Minister for Economic Affairs and Planning Bidur Kumar Lingthep presented it for endorsement. The Assembly also rejected expenditure cut proposals tabled by members Gombu Sherpa and Sapana Darji. It later unanimously approved the Finance Bill, 2026, paving the way for implementation of the province’s fiscal measures for the upcoming year. Speaker Ambar Bahadur Bista adjourned the meeting until further notice following the passage of the bills.
Nepal seeks to expand tea and coffee exports to Austria
Nepal is exploring opportunities to increase exports of tea and coffee to Austria as part of its strategy to diversify international markets. During a meeting on Tuesday, Nepal’s Ambassador to Austria, Bharat Kumar Regmi, and Tina Antonius, managing director of the Austrian Coffee and Tea Association, discussed prospects for promoting Nepali tea and coffee in the Austrian market. The initiative follows recent disruptions in tea exports to India caused by tighter import inspection requirements, prompting Nepal to seek alternative export destinations despite the resumption of shipments. The Embassy of Nepal in Vienna said both sides exchanged views on expanding trade cooperation.
Lumbini tightens rules on pesticide sales
Lumbini Province has prohibited the sale, storage, and commercial trading of pesticides without a valid license under the Province Pesticide Management Act, 2024. The law requires pesticide retailers to obtain a three-year license and limits eligibility to individuals who have completed Grade 12 or possess a TSLC or JTA qualification in agriculture or animal husbandry. It also bans the storage of pesticides alongside food or veterinary medicines, prohibits sales to pregnant women, children, intoxicated persons, and individuals with unstable mental health, and restricts advertisements for chemical pesticides except bio-pesticides. Warning signs must also be displayed after commercial pesticide spraying. Province Assembly member Yam Bahadur Nepali said the legislation is intended to strengthen pesticide regulation across the province.
SEBON reviews regulatory framework after acquisition proposal
The Securities Board of Nepal (SEBON) has begun reviewing its regulatory framework after an unlisted pharmaceutical company announced plans to acquire another unlisted firm. The acquiring company called a special general meeting for July 12 and fixed July 6 as the book closure date. The move has highlighted legal limitations under the Securities Act, 2007, which primarily governs listed companies and does not clearly regulate transactions involving private companies and cooperatives. The review is expected to examine existing regulatory gaps affecting sectors such as manufacturing, tourism, hospitality, and trading.
IPPAN objects to new power scheduling directive
The Independent Power Producers’ Association, Nepal (IPPAN) has urged the Ministry of Energy, Water Resources and Irrigation to reconsider its new electricity scheduling directive. In a memorandum submitted on Wednesday, IPPAN argued that efficiency limits set for turbines, generators, and transformers could discourage plant modernization and conflict with existing power purchase agreements. The association also opposed the requirement for existing plants to increase capacity by at least 15 percent, saying smaller upgrades of 5 to 10 percent would become impractical and could hinder Nepal’s target of producing 30,000 MW of electricity over the next decade.
NRB retains policy rates to support expansionary budget
Nepal Rastra Bank (NRB) has kept its key policy rates unchanged for the second consecutive year as it seeks to support the government’s expansionary budget of Rs 2,124.3 billion for the fiscal year 2026/27. The policy rate remains at 4.25 percent, the standing deposit facility rate at 2.75 percent, and the bank rate at 5.75 percent. Despite the accommodative monetary stance, private sector credit growth has remained weak at around 6 percent, well below the projected 12 percent. The central bank also noted continued stress in the financial sector, with gross non-performing loans rising to 5.6 percent and watchlist loans reaching 11.1 percent as of April 2026.
Dharan Industrial Estate clears five new manufacturing units
The Dharan Industrial Estate has approved the establishment of five new manufacturing industries after cancelling the leases of long-inactive factories. The new investment, estimated at around Rs 350 million, is expected to create about 350 direct jobs once the industries become fully operational. The approved companies include Preeti Valve and Fitting Industries, GD Steel Industries, Siddi Binayak Cottage Industry, JR Ventures and Surya Diamond Industries, although the final lease for Surya Diamond Industries is still awaiting central approval. The industrial estate has prioritized production-oriented businesses to promote import substitution and strengthen the local economy. Established in 1975, the estate is home to 35 industries.
Bhairahawa Inland Revenue Office surpasses annual target
The Inland Revenue Office Bhairahawa exceeded its revenue collection target for fiscal year 2025/26, collecting Rs 17.92 billion by July 6 against a target of Rs 16.92 billion. Meanwhile, the Inland Revenue Office Butwal fell short of its Rs 15.22 billion goal, collecting Rs 12.52 billion. Officials attributed the shortfall to disruptions caused by regional protests earlier this year, although revenue collection still increased significantly compared with the same period last fiscal year.
IPPAN urges SEBON to clear pending hydropower share issues
The Independent Power Producers’ Association, Nepal has urged the Securities Board of Nepal to expedite approval of more than 36 pending initial public offerings (IPOs) and 12 rights share issues in the hydropower sector. During a meeting with SEBON’s new leadership on Wednesday, IPPAN also requested solutions to delays in promoter share dematerialization and proposed reforms including a one-month approval timeline, lower transaction fees and shorter share lock-in periods.
Stakeholders raise concerns over congestion at Belahiya border
Local stakeholders have expressed concern over growing traffic congestion and unmanaged parking of cargo vehicles at the Belahiya Border Post. During a public discussion on Wednesday, participants highlighted encroachment along the six-lane highway as a major cause of the problem. Local authorities said they would coordinate with Indian border officials within a month to improve traffic management. Customs officials added that construction of the Integrated Check Post is about 95 percent complete and is expected to ease freight congestion once the remaining infrastructure is handed over.
Health insurance services suspended at Bhajani health center
The government-backed health insurance programme has been suspended at Bhajani Primary Health Center after the facility failed to receive reimbursement payments. Pharmacy and laboratory services under the insurance scheme have been halted since June 12 because the health center can no longer bear the costs through its internal resources. The facility served 4,376 insured patients during the current fiscal year, but only 65 people have sought treatment since the suspension took effect.
Muglin–Pokhara highway western section reaches 82% completion
Construction of the western section of the Muglin–Pokhara Road Project has reached 82.27 percent physical progress, with 72.17 percent of the project’s financial expenditure completed. Workers have finished 38.36 kilometres of the planned four-lane roadway and paved 37.28 kilometres. The project deadline has been extended by five months to November 26 due to rising construction costs and early monsoon rains. Construction of the 190-metre cable-stayed bridge over the Seti River has also reached nearly 64 percent completion.
Bhojpur road project completes 14 km of blacktopping
The Infrastructure Development Office has completed blacktopping 14 kilometres of the Turke Bridge–Jhyaupokhari–Sampang–Phalidobato road in Bhojpur. The 20-kilometre road project has achieved 83 percent overall physical progress since work began under a Rs 516.2 million contract awarded in fiscal year 2020/21. Officials expect the improved road to reduce transport costs and improve access to markets, healthcare and education.
Lemon cultivation shrinks in Jhapa
Commercial lemon farming in Jhapa has declined as growers struggle with cheap imports and crop disease. Farmers who expanded orchards under government support programmes have started abandoning plantations because of falling prices, weak market access and a dieback disease affecting lemon trees. According to the local Agriculture Knowledge Center, the district’s total lemon cultivation area has fallen from 310 hectares to 270 hectares.
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