KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic and policy developments reveal a mixed picture of institutional progress alongside persistent structural weaknesses. The most significant concern is the Nepal Electricity Authority’s exposure to a potential liability exceeding Rs 1 billion, which highlights the mismatch between hydropower expansion and incomplete transmission infrastructure.
At the same time, the government is projecting a revival of state-owned enterprises, with Nepal Drugs Limited returning to profit and Nepal Airlines and other public entities showing improved operational performance, suggesting that governance and management reforms may be yielding measurable results. Consumer-sector challenges remain visible through continuing LPG distribution complaints, prompting direct ministerial intervention.
On the external front, Nepal is attempting to diversify economic opportunities through a new export partnership with Oman and proposed fisheries cooperation with Bangladesh, reflecting a broader strategy of regional trade and value-added production. Public finance performance, however, remains uneven: Jhapa’s use of only 51 percent of its capital budget points to chronic implementation and execution bottlenecks despite strong recurrent spending.
In contrast, Dhorpatan’s sharp rise in domestic tourism demonstrates how targeted infrastructure and promotion can generate local economic gains. Together, these developments show an economy balancing reform momentum with unresolved institutional and infrastructure constraints.
NEA faces potential Rs 1 billion liability risk
The Nepal Electricity Authority (NEA) could face a financial risk of more than Rs 1 billion after a decision to end contingency arrangements for alternative electricity flow before key transmission infrastructure becomes fully operational. Technical officials have expressed concern that backup measures were withdrawn while the Markichaur-Bharatpur 220 kV transmission line is operating with only one circuit and while the Marsyangdi, Dordi, and Trishuli corridors have not yet reached full transmission capacity. Although no immediate compensation payment is required, internal assessments have warned that take-or-pay obligations from hydropower projects could create significant monthly liabilities if transmission constraints affect electricity evacuation.
PM highlights revival of state-owned industries
Prime Minister Balendra Shah has said several state-owned enterprises that had been running at a loss for years are now showing signs of financial improvement due to transparent leadership, legal discipline, and coordinated management. According to the Prime Minister, Nepal Drugs Limited sold medicines worth Rs 23.8 million in four months and posted a Rs 30 million profit after receiving World Health Organization good manufacturing practice certification. Nepal Airlines Corporation collected Rs 6.276 billion between mid-March 2025 and mid-July 2026 of fiscal year 2024/25, while the Dairy Development Corporation has shortened delays in payments to farmers and increased daily sales. He also said the Singha Durbar Vaidyakhana Development Committee has raised its annual medicine turnover to about Rs 130 million, nearly four times the previous level, and that trial production has begun at Hetauda Textile Industry under the management of the Nepal Army.
Industry minister inspects gas depots amid shortage complaints
Minister for Industry Gauri Kumari Yadav inspected Nepal Gas Industry in Balaju and a gas distribution depot in Teku after consumers reported shortages of cooking gas and difficulties obtaining supplies. During the visit on Saturday, the minister instructed officials to ensure priority distribution of liquefied petroleum gas to university and college students living in the Kirtipur area and warned distributors not to allow shortages in the country’s major educational center. Her secretariat said the inspection was aimed at understanding consumer complaints, assessing the market situation, and reviewing problems faced by households in securing cooking gas.
Nepal and Oman sign agreement to expand exports
The Export Entrepreneurs Federation and the Non-Resident Nepali Social Club in Oman have signed an agreement to promote Nepali goods and services in the Omani market. The agreement was signed in Muscat in the presence of Chargé d’Affaires Bishesh Kumar Sah and aims to create institutional coordination between Nepali exporters and Omani small and medium enterprises. The partnership will focus on promoting Made in Nepal products, including tea, coffee, cardamom, spices, handicrafts, felt products, garments, carpets, herbal products, and traditional clothing, while also helping exporters meet customs, quality, and Halal certification requirements.
Gavi proposes new vaccine support package for Nepal
Health and Food Hygiene Minister Nisha Mehta held high-level talks on August 8 with a Gavi delegation led by Senior Country Manager Nilgun Aydogan on cooperation for the 2027-2030 period. Gavi proposed providing vaccines worth USD 39.6 million along with USD 18.06 million in cash grants over four years, while Nepal would contribute USD 17.1 million through co-financing. Since 2001, Gavi has invested more than USD 550 million in Nepal’s health sector and currently supports five of the eleven vaccines included in the National Immunization Program. Both sides stressed the need for long-term financial sustainability as international development assistance declines.
Bangladesh proposes fisheries cooperation with Nepal
Bangladesh Ambassador to Nepal Shafiqur Rahman has proposed deeper cooperation between the two countries in fisheries and aquaculture, highlighting opportunities in research, technical collaboration, and private investment. Speaking at the first convention of the Nepal Fisheries Development Association in Chitwan, he pointed to Bangladesh’s progress in modern hatcheries, scientific research, and fisheries technology and suggested adapting similar approaches to Nepal’s wetlands. He also called for joint work in fish processing, value addition, and professional training. Minister for Agriculture, Forests and Environment Gita Chaudhary welcomed the proposal and said Nepal is ready to pursue institutional partnerships to strengthen regional agricultural trade.
Jhapa spends only half of capital budget
Jhapa utilized only 51 percent of its capital budget during the last fiscal year, according to the District Treasury Controller Office in Bhadrapur. Out of Rs 12.693 billion allocated for capital expenditure, only Rs 6.472 billion was spent. In contrast, recurrent expenditure utilization remained high, with more than Rs 16.20 billion spent out of an allocation of Rs 17.036 billion. The funds are intended for sectors such as education, health, agriculture, infrastructure, and other public services.
Dhorpatan records strong tourism growth in fiscal year 2025/26
Tourist arrivals in Dhorpatan rose significantly during fiscal year 2025/26, with the Dhorpatan Hunting Reserve Office in Baglung recording 37,520 visitors. Domestic tourism accounted for the overwhelming majority, with 37,270 Nepali visitors, an increase of nearly 14,000 compared with the previous fiscal year’s total of 23,692. Officials attributed the growth to improved tourism infrastructure, expanded promotion, the opening of new trekking routes, and increasing interest in destinations such as Bukipatan, Bukiful, and Jaljala. Better management of local hotels and homestays also contributed to the rise. Revenue from entry fees increased to more than Rs 4.7 million, up from Rs 3.1 million a year earlier.
Dadeldhura families receive land certificates after 38 years
Twelve families in Parshuram Municipality-12 of Dadeldhura have finally received land ownership certificates 38 years after their land was originally surveyed and mapped. The land had been measured in fiscal year 1988/89, but the ownership process remained incomplete for decades. Although the process was revived in 1999, certificates were still not issued. The current Land Problem Settlement Commission completed the remaining legal procedures and distributed certificates to residents of Khajurani and Tulabhadi after revenue collection and verification.
Beverage companies contribute billions in government revenue
Major multinational beverage companies operating in Nepal generate annual turnover exceeding Rs 20 billion, supported by strong demand for carbonated drinks and packaged juices. The government collects an estimated Rs 4-6 billion each year through excise duty, value-added tax, customs duties, and corporate taxes. Current tax rates include excise duties of up to Rs 60 per liter on soft drinks and up to Rs 1,220 per liter on energy drinks. Analysts say the sector remains an important and stable source of government revenue.
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