KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape shows a mix of short-term market weakness and underlying structural shifts. The decline in the Nepal Stock Exchange alongside falling turnover reflects cautious investor sentiment, even as rising gold prices suggest a move toward safe-haven assets. At the macro level, liquidity remains abundant—evidenced by the Rs 30 billion absorption by Nepal Rastra Bank and declining government borrowing costs—yet weak private sector investment and the Rs 1.349 trillion internal debt highlight structural imbalances.
External developments are also influential: eased investment rules by India could create opportunities for cross-border capital, while disruptions in the Strait of Hormuz threaten fertilizer supply and global food prices. Meanwhile, international support such as the loan from the World Bank and Japan’s assistance to South Asian Association for Regional Cooperation reflects continued development partnerships.
Domestically, infrastructure projects, digital growth indicated by record internet traffic, and agricultural activity show progress, but delays in major projects, raw-material shortages in the jute sector, and supply-driven price increases in food markets underscore persistent implementation and supply-chain challenges in Nepal’s economy.
NEPSE declines 1.64 percent as turnover shrinks to Rs 13.18 billion
The Nepal Stock Exchange (NEPSE) index dropped 46.78 points, or 1.64 percent, on Wednesday to close at 2,796.57. The Sensitive Index also fell by 8.32 points (1.69 percent) to 481.37. A total of 36,049,451 shares from 329 companies were traded through 115,550 transactions, generating a turnover of Rs 13.18 billion, significantly lower than Tuesday’s Rs 21.502 billion. Share prices of 225 companies declined, while 34 advanced and three remained unchanged. Of the 13 sectoral indices, only the Mutual Fund group recorded a gain of 0.34 percent, while the remaining sectors posted losses, led by Trading (3.40 percent), Finance (2.08 percent), and Life Insurance (1.98 percent).
Gold price rises by Rs 2,000 per tola
Gold prices increased in the domestic market on Wednesday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold rose by Rs 2,000 per tola (11.66 grams), reaching Rs 319,000 per tola, up from Rs 317,000 on Tuesday. Meanwhile, the price of silver remained unchanged at Rs 5,720 per tola, the same rate recorded the previous day.
NRB collects Rs 30 billion to manage excess liquidity
Nepal Rastra Bank (NRB) collected Rs 30 billion from banks and financial institutions on Wednesday through a 28-day deposit collection instrument aimed at absorbing excess liquidity in the market. The central bank invited bids from Category ‘A’, ‘B’, and ‘C’ financial institutions. Interest rates were determined through an online bidding process held Wednesday afternoon, with priority given to institutions offering lower rates. According to the NRB, both the principal and interest payments for the collected funds are scheduled to be settled on April 8.
India relaxes investment rules for neighboring countries including Nepal
The Cabinet of India decided on Tuesday to ease strict investment approval requirements for neighboring countries such as Nepal. Previously, under the April 2020 Press Note 3 regulation, nations sharing land borders with India had to obtain government approval for Foreign Direct Investment (FDI) to prevent opportunistic acquisitions during the pandemic. The revised rule now allows investors from these countries to invest up to 10 percent through the automatic route in non-strategic sectors. Investment proposals in designated areas such as electronics and capital goods will be processed within 60 days. However, majority ownership and control of recipient companies must remain with resident Indian citizens or Indian-controlled firms.
World Bank approves Rs 7.72 billion loan for clean air project
The World Bank has approved a loan of Rs 7.72 billion (USD 52 million) to support efforts to improve air quality and reduce pollution in Nepal. The initiative, titled the “Nepal Clean Air and Prosperity Project,” will focus on high-risk areas such as the Kathmandu Valley and parts of the Terai. The project plans to help around 400 industrial and commercial enterprises transition to smokeless operations. Implementation will be carried out by the Department of Industry and the Department of Environment, with the aim of reducing health risks linked to worsening air pollution.
Domestic internet traffic reaches record 100 GBPS during election
Domestic internet traffic in Nepal reached a record 100 GBPS for the first time as citizens closely followed the March 5 election results. The Nepal Internet Exchange (NPIX) reported that heavy demand from election result updates and Twenty20 cricket matches contributed to the surge in data usage. Although Nepal’s international bandwidth capacity stands at 2,500 Gbps, higher domestic traffic helps reduce reliance on international connections and improves access speed for local news and social media platforms. The milestone reflects positive momentum for Nepal’s digital economy and the increasing consumption of online content.
Govt says fertilizer stocks sufficient despite middle east conflict
The Ministry of Agriculture and Livestock Development has stated that Nepal currently has adequate fertilizer reserves for the upcoming rice planting season. Officials reported that 183,000 metric tons of chemical fertilizer are available, with 137,630 tons already stored in warehouses and another 45,370 tons in transit. Joint Secretary Ram Krishna Shrestha confirmed that supply sources for an additional 300,000 tons have been secured for the next fiscal year. Nepal imported fertilizer worth Rs 42.63 billion during the past seven months, mainly from China, and the government is exploring alternative supply routes to minimize potential disruptions.
Govt internal debt rises to Rs 1.349 trillion amid lower interest rates
Nepal’s internal debt reached Rs 1.349 trillion by mid-February, although the government is benefiting from historically low interest rates. Due to high liquidity in the banking system and weak demand for private sector credit, the average interest rate on internal debt has dropped to 3.33 percent this year, compared to 8.84 percent in the 2022/23 fiscal year. Finance Minister Rameshore Khanal stated that while cheaper borrowing helps manage the fiscal deficit, limited productive investment from the private sector remains a worrying economic indicator. The interest payment ratio has now declined to about 4.30 percent, easing pressure on the national treasury.
International airlines partially resume flights to Kathmandu
International airlines began partially restoring flights to Kathmandu on Tuesday as airspace in parts of the Middle East reopened after a brief period of heightened tensions. Air Arabia received approval to operate three daily flights from Dubai and Sharjah, helping stranded tourists and migrant workers. Meanwhile, Nepal Airlines and Himalaya Airlines are preparing rescue flights. The status of Qatar Airways and Jazeera Airways remains uncertain. Around 300 passengers are currently stranded in Kathmandu, while another 100 are stuck in Doha. Nepal Airlines has scheduled a wide-body rescue flight for Wednesday night for passengers who purchased tickets before the conflict began.
Strait of Hormuz disruption threatens global fertilizer supply
Global agricultural markets are facing significant risks as fertilizer shipments from the Middle East are disrupted due to the closure of the Strait of Hormuz. This route accounts for about 35 percent of global urea and 45 percent of sulfur exports. In the United States, fertilizer prices surged from USD 516 to USD 683 per ton on Thursday, while a major plant in Qatar halted production due to gas supply shortages. India, which imports around 40 percent of its urea from the region, is already seeing reduced output at domestic factories. Analysts warn that if the disruption continues, prices could rise to the 2022 peak of USD 1,100 per ton, potentially triggering global food inflation.
Local govt to build Rs 6 crore fecal sludge treatment plant
Ghorahi Sub-Metropolitan City has partnered with the Water Supply and Sewerage Management Office to construct a modern fecal sludge treatment facility. The project, estimated to cost Rs 61.4 million, will be built on 13,545.25 square meters of land at the existing dumping site in Ward 13. Mayor Narulal Chaudhary signed the agreement aimed at managing waste from urban toilets and reducing environmental pollution in the fast-growing city. The initiative will receive data support from the UN-Habitat Citywide Inclusive Sanitation (CWIS) project. While the federal office will finance the capital investment, the sub-metropolitan city will handle daily operations, including purchasing desludging vehicles and recruiting specialized staff.
German Ambassador urges stronger business environment in Nepal
Udo Eugen Volz, the German Ambassador to Nepal, stressed that attracting foreign investment requires a stable and transparent business climate supported by clear policies. Speaking at an event in Kathmandu organized with the Nepal-German Chamber of Commerce and Industry (NGCCI) and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), he encouraged Nepali entrepreneurs to actively take part in international trade fairs. Volz also pointed out the increasing interest of German tourists in Nepal’s mountaineering and adventure tourism sectors. NGCCI President Santosh Chandra Kunwar highlighted three decades of bilateral cooperation, while former President Anup Bahadur Malla warned that a once-positive trade balance has recently turned into a deficit.
Japan pledges Rs 12 million to SAARC Secretariat
The government of Japan has committed Rs 12 million to the SAARC Secretariat to support initiatives under the SAARC–Japan Special Fund. The agreement was signed on Monday by Golam Sarwar, Secretary-General of the South Asian Association for Regional Cooperation (SAARC), and Japan’s Ambassador to Nepal, Maeda Toru. The funding aims to enhance cooperation and friendly ties between Japan and SAARC’s eight member countries. Programs supported by the fund typically focus on areas such as technology transfer, poverty reduction, and cultural collaboration across the region.
Seven firms shortlisted to operate Nagdhunga tunnel
Seven international companies have successfully passed the technical evaluation stage to manage operations of the Nagdhunga-Sishnekhola Tunnel. Out of ten initial applicants—including companies from China, India, and Turkey—seven joint ventures met the qualification criteria, while three were disqualified. Deputy Director Sanjay Panthi said financial proposals will be evaluated starting March 15. The selected company will receive a five-year contract to run the tunnel. Authorities expect to finalize the agreement by late March, enabling staff training before trial operations planned for mid-May.
Department fines two firms during market monitoring
The Department of Commerce, Supplies and Consumer Protection inspected 13 businesses in a single day and penalized two of them for violations. Sindhu Fruits and Fresh Center was fined Rs 20,000, while Panchakanya Tridev Dairy Shop was fined Rs 10,000 under the Consumer Protection Act 2018. Authorities also issued improvement directives to 11 other businesses. The inspections, carried out with support from local stakeholders and consumer rights advocates, are aimed at preventing market malpractice and promoting fair business practices.
Four-lane Madi river bridge reaches 77.7 percent completion
Construction of the four-lane bridge over the Madi River connecting Vyas Municipality wards 4 and 5 has reached 77.7 percent completion. The bridge is part of the Muglin–Pokhara Road Expansion Project and is being built by ZIST-Annak JV at a cost of Rs 1.21 billion. According to Information Officer Engineer Bishnu Prasad Pandey, major structural work has already been completed, with finishing works underway. Around 125 workers are currently engaged daily to complete the decorative arc-design bridge within the current fiscal year. The project is financed by the Asian Development Bank and aims to reduce traffic congestion in the Damauli area.
Buldi Khola bridge construction reaches 45 percent progress
The bridge being built over the Buldi Khola to connect Deuralinagar and Bigyan Chaur in Tanahun District has achieved 45 percent completion after years of delays caused by technical issues. Following instructions from the Infrastructure Development Office, the contractor recently demolished and reconstructed a defective span to meet safety standards. Division Engineer Rabindra Tiwari said the relocation of a power transformer helped accelerate progress on the 25-meter bridge. Originally awarded in 2020 for Rs 51 million, the project is crucial for students attending five nearby schools. Authorities expect the remaining work to finish by mid-April.
Pokhara underground cabling project faces further delays
The underground electricity distribution project in Pokhara has reached about 67 percent completion despite three deadline extensions. The Rs 130 billion initiative is being implemented by the Nepal Electricity Authority with construction carried out by Tata Projects. Cabling work has been completed from Pokhara International Airport to Prithvi Chowk, but sections around New Road and Chipledhunga remain unfinished. Project chief Anand Subedi warned that the latest June 30 deadline may also be missed due to monsoon disruptions. The project uses horizontal directional drilling technology to limit road damage and includes optical fiber lines for internet and telephone connectivity.
Mantabhir cliff delays completion of Mid-hill Highway
A 700-meter rocky stretch at Mantabhir in Jajarkot District continues to delay completion of the Mid-Hill Highway, a major national pride project intended to serve about five million citizens. While roughly 90 percent of the 440-kilometer section between Chaukhutte and Patihalne has been completed, construction at Mantabhir has stalled for more than 13 years. Engineer Niranjan Thapa said a new survey proposal has been submitted to the Department of Roads to approve expensive rock-cutting work. Meanwhile, a 126-meter bridge over the Bheri River remains unfinished after the contractor YP Construction abandoned the Rs 140 million project after building only two pillars.
Raw material shortage disrupts sunsari–morang jute industry
The jute industry in the Sunsari–Morang Industrial Corridor is facing a severe crisis due to declining imports of raw jute from Bangladesh and India. Production capacity has dropped by about 60 percent, with daily output falling to roughly 100 metric tons from a potential 240 metric tons. Rajkumar Golcha, president of the Nepal Jute Association, said more than 3,000 workers have already lost their jobs. Bangladesh reduced exports following a 7 percent crop decline caused by floods and extreme heat, while India prioritized domestic supply. Many mills currently hold raw material stocks sufficient for only 10 to 30 days, forcing them to scale back operations to two shifts.
Grape prices increase at Kalimati market
Grape prices also rose at the Kalimati Fruit and Vegetable Market on Wednesday. According to the Kalimati Fruit and Vegetable Market Development Committee, the average wholesale price of green grapes increased by Rs 15 to reach Rs 210 per kilogram, compared with Rs 195 the previous day. The price of black grapes also climbed by Rs 10, reaching Rs 310 per kilogram from Rs 300 earlier. The changes reflect strong seasonal demand for fruits despite rising costs in the country’s largest wholesale agricultural market.
Tomato prices rise at Kalimati wholesale market
Tomato prices increased significantly at the Kalimati Fruit and Vegetable Market on Wednesday. The average wholesale price of small Terai tomatoes climbed 22.22 percent from Rs 45 to Rs 55 per kilogram. Prices of small local tomatoes rose 14.29 percent to Rs 40 per kilogram, while small Indian tomatoes increased 13.64 percent to Rs 50 per kilogram. However, the price of large Indian tomatoes remained unchanged at Rs 65 per kilogram. Traders attribute the fluctuation to seasonal supply changes and disruptions in supply chains.
Kalinchowk hydropower extends IPO deadline for locals
Kalinchowk Hydropower Company has extended the deadline for its Initial Public Offering (IPO) aimed at residents of project-affected areas until March 27. The extension was announced after low participation from communities in Bigu Rural Municipality and Kalinchowk Rural Municipality of Dolakha District. The company is offering 550,000 shares at Rs 100 each, representing part of its Rs 550 million capital. The issue is managed by RBB Merchant Banking and will help finance the 5-megawatt project on the Soru Khola, estimated to cost Rs 1.20 billion.
Taskar Pikhuwa Khola hydropower launches IPO for locals
Taskar Pikhuwa Khola Hydropower Company opened its IPO on Wednesday for residents of Bhojpur District and Nepali migrant workers abroad. The company is issuing 1,200,000 shares worth Rs 120 million for local residents, with applications open until March 25. An additional 303,067 shares have been reserved for Nepalis working overseas. The 8-megawatt hydropower project has an estimated cost of Rs 1.88 billion. Care Rating Nepal assigned the project a Double B Plus rating, indicating moderate investment risk. The IPO is being managed by Prabhu Capital, and a second phase will later open for the general public with more than 2.5 million shares.
Farmers in Bhojpur busy harvesting winter potatoes
Farmers across Bhojpur District are actively harvesting winter potatoes as the crop reaches maturity. In Bhojpur Municipality, Shadananda Municipality, and Temkemaiyung Rural Municipality, locals are working from early morning to evening digging, sorting, and storing the produce. Farmer Dhan Bahadur Thapa said potatoes generate quicker income compared to other crops, though the shortage of young laborers due to foreign employment remains a challenge. According to the Agriculture Knowledge Center, the district produced about 51,900 metric tons of potatoes last year across 3,272 hectares.
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