KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economy continues to display a combination of strong external-sector performance, policy modernization, and infrastructure momentum, alongside persistent governance and compliance challenges. Record-high remittance inflows, relaxed foreign exchange rules for students, expanded digital lending limits, and measures to formalize transactions through tighter tax rules indicate efforts to deepen financial inclusion and strengthen the formal economy.
Despite these positive macroeconomic signals, investor sentiment remains cautious, as reflected by the marginal decline in NEPSE, even though trading turnover increased substantially. Large public investments in hydropower, local infrastructure, fertilizer procurement, and federal grants underscore the government’s development focus, while growing customs revenue from cross-border trade with China highlights expanding economic activity.
However, concerns over alleged budget leaks, mounting unpaid electricity and industrial estate dues, and the emergence of organized cross-border marijuana trafficking expose weaknesses in governance, regulatory enforcement, and institutional accountability.
Overall, the developments suggest that while Nepal is making progress in economic expansion, digitization, and infrastructure development, sustaining growth will depend on stronger implementation capacity, improved transparency, and more effective enforcement of public policies.
NEPSE slips 1.54 points as turnover climbs to Rs 6.443 billion
The Nepal Stock Exchange (NEPSE) edged down by 1.54 points, or 0.05 percent, on Tuesday to close at 2,733.59 after a volatile trading session. Despite the slight decline, market activity increased significantly, with turnover rising to Rs 6.443 billion from Rs 4.084 billion recorded a day earlier. The Sensitive Index also dipped marginally by 0.29 points to 469.07. Among 357 listed companies, 105 gained, 151 lost value, and 15 remained unchanged. Sector performance was mixed, with finance and insurance stocks generally declining, while hotels, manufacturing, and hydropower sectors posted modest gains.
Gold rises to Rs 301,900 per tola, silver reaches Rs 4,925
Gold and silver prices increased in the domestic market on Tuesday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold climbed by Rs 2,000 per tola (11.66 grams), reaching Rs 301,900 compared to Rs 299,900 on Monday. Silver also recorded gains, rising by Rs 20 per tola to Rs 4,925, up from the previous day’s rate of Rs 4,905 per tola.
Monthly remittance inflows reach historic high
Recent macroeconomic data released by Nepal Rastra Bank shows that monthly remittance inflows reached a record Rs 257 billion, marking the highest level ever recorded in a single month. During the first ten months of the current fiscal year, total remittance receipts increased by 41.2 percent year-on-year to Rs 1.916 trillion. In US dollar terms, remittance inflows rose by 33 percent to USD 13.26 billion. The data also indicates that 335,510 Nepali citizens received first-time approvals for foreign employment during the review period.
NRB eases foreign exchange rules with additional 5 percent buffer for students
Nepal Rastra Bank (NRB) has revised its unified directives to provide greater flexibility in foreign exchange arrangements for students pursuing higher education outside India. Under the updated provisions, commercial banks are allowed to maintain an additional 5 percent margin above approved foreign currency limits to help offset exchange rate fluctuations during visa processing and living expenses abroad. Existing regulations permit parents to remit annual maintenance expenses ranging from USD 2,500 to USD 5,000. The central bank has also recognized digitally signed documents as valid records in accordance with the Electronic Transactions Act, 2006.
NRB doubles digital lending limits
Nepal Rastra Bank has amended its Digital Lending Guidelines 2021, significantly expanding access to digital credit for individuals and small businesses. Under the revised framework, self-employed professionals and salaried individuals with stable banking records can obtain digital loans of up to Rs 500,000 with repayment periods of up to three years. General consumers may access personal digital loans of up to Rs 200,000, while business operators can secure working capital loans of up to Rs 500,000 or longer-term business financing of up to Rs 1 million through digital channels.
Government lowers cash transaction limit for tax deductions
Through the Economic Bill 2026, the government has amended the Income Tax Act by reducing the threshold for deductible cash transactions from Rs 50,000 to Rs 25,000. Under the new provision, businesses or individuals with annual turnover exceeding Rs 2 million will not be allowed to claim tax deductions on single cash payments above Rs 25,000. The measure is intended to encourage greater use of formal banking channels, improve transparency, and reduce reliance on cash transactions. The amendment also allows expenses related to issuing shares and debentures to be treated as deductible costs, while other capital expenditures remain ineligible.
Karnali records more than 2,000 projects in planning bank
The Ministry of Physical Infrastructure and Urban Development of Karnali Province has entered 2,062 infrastructure project proposals into the provincial project bank for evaluation and planning purposes. The database covers projects from all 10 districts and 79 local governments, ensuring that future development initiatives undergo formal review before budget allocation. Provincial authorities have registered 11,262 projects across different sectors, while 930 proposals are currently undergoing advanced assessment to improve planning efficiency and transparency in public investment decisions.
Cabinet promotes state-owned DDC products
The Ministry of Agriculture, Forests, and Environment presented a strategy to strengthen the market presence of the state-owned Dairy Development Corporation (DDC) during a Cabinet meeting. The initiative aims to expand distribution networks for domestically produced milk, ghee, yogurt, and paneer while ensuring better returns for dairy farmers. As part of the campaign, ministry officials distributed DDC product packages to Cabinet members and the Prime Minister, who pledged government support to encourage consumers to choose locally produced dairy products over imported alternatives.
Korala Customs collects Rs 13.88 billion in import duties
The Mustang Customs Office at Lomanthang has recorded strong trade activity through the Korala border point connecting Nepal and China, generating Rs 13.877 billion in customs revenue. Official records show that customs authorities cleared 2,997 electric vehicles imported from China, contributing Rs 6.760 billion to total revenue collections. Exports of handicrafts and manufactured goods to China generated Rs 205.5 million during the same period. Meanwhile, the government has established a three-member committee to investigate possible valuation irregularities involving 649 imported vehicles.
National Assembly members seek independent investigation into budget leak allegations
Members of the National Assembly have called for the formation of an independent parliamentary investigation committee to examine allegations of irregularities related to pre-budget tariff revisions. Opposition lawmakers claimed that 16 pages containing key customs and tariff adjustments were altered or removed shortly before the presentation of the fiscal bill. They alleged that confidential tariff information concerning vehicle imports may have been leaked, enabling certain importers to benefit from revised valuation rates. Lawmakers also requested clarification from the Prime Minister regarding comments linked to Nepal’s diplomatic relations.
Ministry reports Rs 26.95 billion in unpaid electricity dues
The Ministry of Energy, Water Resources, and Irrigation has released data showing substantial unpaid electricity bills among industrial consumers and local governments. According to the report, 59 industrial enterprises using dedicated and trunk power lines owe a combined Rs 26.95 billion in outstanding charges as of mid-January. In addition, 355 local governments have accumulated unpaid street-lighting bills totaling Rs 9.935 billion, including penalties. Kathmandu Metropolitan City recorded the largest municipal liability, with outstanding dues amounting to Rs 1.986 billion.
Government warehouses maintain 140,000 metric tons of fertilizer stock
The Ministry of Agriculture, Forests, and Environment has reported adequate fertilizer reserves despite localized supply challenges during the planting season. As of June 1, Nepal had imported 329,689 metric tons of urea, with 80,900 metric tons currently stored by the Agricultural Inputs Company Limited and Salt Trading Corporation. National storage facilities also hold 40,760 metric tons of DAP fertilizer and 19,180 metric tons of potash. Additional procurement processes covering 491,300 metric tons are underway, supported by an annual allocation of Rs 28.821 billion.
Ministry orders Balaju industrial firms to clear outstanding rental dues
The Ministry of Industry, Commerce, and Supplies has instructed Industrial Zone Management Limited, Balaju, to issue notices to companies operating within the Balaju Industrial Estate over unpaid rental and utility obligations. Government records show that Gurans Engineers has the largest outstanding liability at Rs 37.3 million, followed by Continental Component and Services Pvt. Ltd. with Rs 36.9 million and Botlers Nepal with Rs 17.5 million. Authorities have given the concerned firms seven days to settle overdue rent, water charges, and electricity bills, warning that failure to comply could result in utility disconnections and closure of business premises.
Finance Ministry allocates Rs 4.564 billion in grants to Tanahun local governments
The Ministry of Finance has approved a federal grant package worth Rs 4.564 billion for local governments across Tanahun District for fiscal year 2026/27. According to official allocation records, Vyas Municipality received the largest share at Rs 943 million through a combination of fiscal equalization, conditional, and complementary grants. At the other end, Ghiring Rural Municipality secured the smallest allocation of Rs 282.9 million. Other local governments, including Bhanu Municipality, Bhimad Municipality, and Shuklagandaki Municipality, have also been allocated substantial funding to support development and infrastructure projects.
Sunsari emerges as a major marijuana trafficking route along the Nepal–India border
A series of large-scale police operations conducted between 2025 and 2026 has revealed an increasingly organized marijuana smuggling network operating through Sunsari and other parts of eastern Nepal, with links extending into India. Law enforcement agencies have seized substantial quantities of cannabis in multiple incidents, including 537 kilograms in Koshi Rural Municipality, 440 kilograms from an ambulance in Dharan, and 153 kilograms in Inaruwa. Authorities say traffickers are using vehicles such as ambulances and SUVs to avoid detection. Police statistics indicate that Sunsari accounted for more than 60 percent of all marijuana seizures in Koshi Province during fiscal year 2025/26, highlighting its growing importance as a trafficking corridor. Officials believe only a small portion of total smuggling activity is being intercepted, suggesting the existence of a broader illicit network operating across border routes into Bihar, India.
Jumla economic census reaches 91 percent completion
The District Economic Census Office in Jumla has completed 91 percent of its target under the National Economic Census 2025. Survey teams operating across eight local levels have documented 4,038 businesses and cottage industries out of a target of 4,411 economic establishments. Census data indicates notable growth in business activity compared to the 2018 census, which had recorded a target of 3,078 establishments. Chandannath Municipality registered the highest number of business entities with 1,492 listings, while Tila and Sinja also exceeded initial projections.
Construction begins on 180 MW Kaligandaki Gorge Hydropower Project
Work has officially commenced on the 180 MW Kaligandaki Gorge Hydropower Project in Myagdi District, with tunnel excavation beginning at Bhalebas in Annapurna Rural Municipality–4. Developed by Kaligandaki Gorge Hydropower, the run-of-river project is expected to be completed within four years. The scheme includes a 5.6-kilometer tunnel, a powerhouse at Gharap, a barrage at Ghansama, and a one-kilometer penstock pipeline. Supporting infrastructure, including roads, transmission facilities, and staff accommodation, is nearing completion. The Rs 40 billion project is being financed by a consortium led by Global IME Bank, while local residents will receive a 10 percent equity stake.
Rahughat corridor connects 127 MW of hydropower to the national grid
Raghuganga Hydropower, a subsidiary of the Nepal Electricity Authority (NEA), has successfully commissioned a 220 kV air-insulated switchyard at Tilkenichaur in Myagdi. The facility was integrated into the Kaligandaki Corridor transmission network using the loop-in, loop-out (LILO) connection method, enabling the transmission of 127.8 MW of electricity generated from four hydropower projects. The switchyard will also facilitate the future connection of the 40 MW Rahughat Hydroelectric Project, which is currently undergoing final testing and tunnel inspections under the supervision of Jaiprakash Associates.
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