KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s recent developments highlight a mixed picture of economic opportunities, infrastructure progress and institutional challenges. Its improved position among India’s top 10 tourist source markets, alongside the recovery of tourism in Gosaikunda, underscores the potential of cross-border travel and domestic tourism to support economic growth. Similarly, efforts to attract UAE investment in hydropower, tourism and data centres indicate growing interest in diversifying foreign investment and strengthening international economic partnerships.
However, climate vulnerability remains a major concern, with Nepal seeking up to $20 billion in adaptation financing and $4.78 billion for disaster recovery. Flood damage, unseasonal hailstorms and threats to agricultural production demonstrate the urgent need for climate resilience, disaster preparedness and sustainable development. The proposed Postal Highway extension also highlights the challenge of balancing infrastructure expansion with environmental conservation, particularly in protected areas.
Infrastructure modernization is advancing, as demonstrated by substantial progress in underground electricity distribution in Pokhara and Bharatpur. Meanwhile, the 63% decline in foodgrain imports may indicate changing import demand, although its implications for domestic production require further assessment.
On the governance front, efforts to resolve insurance disputes, penalize food safety violations and terminate stalled construction contracts reflect stronger regulatory enforcement. Nevertheless, pending complaints and delayed public projects expose persistent institutional weaknesses. Overall, Nepal needs coordinated policies, effective implementation and accountable institutions to translate emerging opportunities into sustainable and inclusive economic development.
Nepal among India’s top 10 tourist source markets with 218,641 visitors in 2025
Nepal ranked among the top 10 countries of origin for international visitors to India in 2025, with 218,641 Nepali nationals travelling to the neighbouring country and accounting for 2.4% of total foreign tourist arrivals. Annual statistics published by India’s Ministry of Tourism show that the country received 9,148,766 international visitors during the year. Nepal improved its position from 11th in 2024, when 202,501 Nepali visitors were recorded. September emerged as a peak month for Nepali travel to India, with visitors travelling primarily for medical treatment, religious pilgrimages and leisure activities. The United States topped the list of source markets with 1,881,772 visitors, representing 20.1% of total arrivals. The United Kingdom followed with 1,084,310 visitors, while Australia, Canada and Bangladesh recorded 545,438, 544,326 and 468,621 arrivals, respectively.
Climate stakeholders seek $20 billion in adaptation finance and $4.78 billion in recovery assistance at COP31
Environmental stakeholders and government representatives have called on the international community to provide predictable, grant-based climate financing to vulnerable mountain countries at the 31st United Nations Climate Change Conference (COP31) in Antalya, Turkey, on Thursday. Speaking at a high-level panel organized by the National Trust for Nature Conservation (NTNC) at the Nepal Pavilion, officials from the Ministry of Agriculture, Forestry and Environment stressed that Nepal needs between $18 billion and $20 billion in adaptation financing for the 2025–2035 period. They also highlighted the need for $4.78 billion to support post-disaster recovery following the devastating Rasuwa–Bhote Koshi floods of August 26, 2026. Representatives from the Adaptation Fund and the Shanshui Conservation Center discussed financial support mechanisms, including direct grants of up to $250,000 and green financing initiatives aimed at strengthening the resilience of local communities.
Nepal Insurance Authority settles 312 policyholder complaints in nine months
The Nepal Insurance Authority resolved 312 insurance-related complaints between January 27 and November 4 this year through its central and provincial offices, with a focus on ensuring timely settlements of policyholder disputes. According to regulatory data, 241 complaints were resolved through formal decisions, while the remaining 71 were settled through mutual mediation. During the first three months of fiscal year 2026/27, ending October 17, the authority addressed 94 complaints, including 75 through formal verdicts and 19 through mutual settlements. Of the 393 active complaints registered during the period, 299 remained pending resolution.
Tourist arrivals at Gosaikunda recover following restoration of flood-damaged trails
Tourism activities around Gosaikunda, the sacred alpine lake in Rasuwa district, are gradually recovering, with domestic and international visitor numbers picking up following the restoration of flood-damaged access routes. Tourist arrivals had declined after the August 26, 2026, floods along the Bhote Koshi River damaged roads and trekking trails, disrupting access to the popular religious and tourist destination. However, coordinated restoration efforts involving Gosaikunda Rural Municipality, Langtang National Park and local tourism entrepreneurs have helped reopen safe routes, bringing renewed business opportunities for hotels, trekking guides and transport operators. Located at an altitude of 4,380 metres in Ward No. 6 of Gosaikunda Rural Municipality, the lake covers an area of 13.80 hectares and is part of a Ramsar-listed wetland. It continues to attract pilgrims and trekkers throughout the year, particularly those travelling along the Helambu and Tamang Heritage trails.
Environmental impact assessment submitted for 7.813-km Postal Highway section in Chitwan
The Postal Highway Directorate under the Department of Roads has submitted an Environmental Impact Assessment (EIA) report to the Ministry of Forests and Environment for a proposed 7.813-kilometre road section in Chitwan. The proposed alignment, known as the Riukhola (Bankatta)–Deurali–Nayapul–Dhrubaghat–Jagatpur section, will connect Madi with Bharatpur Metropolitan City. The EIA report was prepared by Geocom International. The proposed route passes through Chitwan National Park and its buffer zone and is intended to provide a shorter alternative to the existing 10.3-kilometre road via Kasara Bridge. The project, which is part of the national pride infrastructure programme, is expected to reduce travel time and improve transport connectivity for communities in Madi and neighbouring Thori in Parsa district once it receives the necessary environmental approval.
Foodgrain imports through Birgunj Customs decline by 63%
Foodgrain imports through the Birgunj Customs Office fell by approximately 63% during the first quarter of fiscal year 2026/27 compared to the corresponding period last year. According to customs data, imports of rice, maize, wheat, paddy, millet and buckwheat declined from 87,047,000 kilograms to 31,640,000 kilograms between July 17 and October 17. The value of rice imports also decreased, with 6,773,629 kilograms imported for Rs 898.1 million. Paddy imports recorded a particularly sharp decline, with their value falling from Rs 1.462 billion to Rs 333.5 million for a total volume of 6,935,460 kilograms. Similarly, expenditure on maize imports dropped from Rs 1.801 billion to Rs 609.8 million, with imports totalling 6,736,437 kilograms during the review period.
Underground power distribution project reaches 82% completion in Pokhara and 95% in Bharatpur
The Rs 3 billion Pokhara–Bharatpur Distribution System Strengthening Project has achieved 82% physical progress in Pokhara and 95% in Bharatpur, according to the Nepal Electricity Authority (NEA). The project, being implemented with concessional financing from the Asian Development Bank (ADB), is designed to modernize urban electricity distribution through underground cable networks. Tata Projects has been carrying out the construction work since January 2022. The NEA aims to complete the underground cabling works in Bharatpur by mid-December 2026 and in Pokhara by mid-May 2027. In Pokhara, 165.7 kilometres of underground cables have been installed out of the planned 223 kilometres, of which 55.2 kilometres have already been energized across major urban areas and lakeside corridors. Meanwhile, Bharatpur has completed the installation of 155.37 kilometres of cables against the targeted 156.33 kilometres, alongside the installation of optical fibre infrastructure.
Nepali business delegation seeks UAE investment in hydropower, tourism and data centres
Nepali private-sector representatives have called on investors from the United Arab Emirates (UAE) to explore investment opportunities in Nepal’s hydropower, tourism, agriculture, information technology and data centre industries. The appeal was made during bilateral discussions in Dubai on Thursday by representatives of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and IME Group. The meetings were held alongside the RAK Investment Summit 2026 in Ras Al Khaimah. Discussions with the UAE Ministry of Foreign Trade focused on Nepal’s potential to attract investment by leveraging its abundant clean energy resources and relatively cool climate, particularly for data centres and cable car-based tourism projects. Both sides also underscored the importance of strengthening bilateral investment arrangements ahead of the 50th anniversary of diplomatic relations between Nepal and the UAE in 2027. The discussions further highlighted the possibility of introducing direct flights to Gautam Buddha International Airport in Bhairahawa to improve connectivity and facilitate greater economic and tourism exchanges.
Urban development department moves to terminate eight stalled construction contracts
The Department of Urban Development and Building Construction has initiated procedures to terminate contracts and blacklist contractors responsible for eight major infrastructure projects that have remained stalled due to prolonged delays and failure to meet contractual obligations. Departmental records show that Kabindra Nirman Sewa made no physical progress over six years on the security forces’ building at the Ministerial Quarters in Pulchowk. Similarly, the ANK–Kabindra Joint Venture (JV) completed only 20% of the construction work on the main ministerial residence complex. The department is taking action against contractors accused of collecting mobilization advances without making meaningful progress on their assigned projects. Authorities have stated that the performance guarantees of defaulting contractors will be confiscated in accordance with applicable procedures. Following contract termination, the affected projects are expected to be put out to tender again to accelerate construction and ensure timely completion.
Government prepares to terminate contracts for 18 overdue urban development projects
The Ministry of Urban Development and the Department of Urban Development and Building Construction have stepped up administrative measures to cancel contracts for 18 infrastructure projects that have remained incomplete beyond their contractual deadlines. Of the 2,807 projects being handled by the department, technical assessments have identified 72 problematic contracts involving construction delays at various sites, including the Office of the President, Singha Durbar, historical heritage properties, rural health facilities and municipal roads. Officials said regional offices are currently assessing the physical progress of the projects and the capacity of the contractors involved to determine the next course of action. Contractors found responsible for prolonged delays and failure to fulfil their obligations could face contract termination, forfeiture of bank guarantees, financial penalties and blacklisting from future public procurement opportunities.
Parsa administration fines restaurant Rs 200,000 after cockroach found in customer’s meal
The District Administration Office (DAO), Parsa, has fined Sama Muradabadi and Hyderabadi Biryani House Rs 200,000 after a dead cockroach was reportedly found in a meal served to a customer. The restaurant, located in Chhapkaiya, Ward No. 2 of Birgunj Metropolitan City, was penalized following an inspection by local administration officials, who confirmed serious breaches of food hygiene and quality standards during an on-site examination. The administration has warned restaurants, hotels and other food service businesses across Parsa district to maintain proper kitchen sanitation and comply with food safety requirements. It also cautioned that businesses failing to meet the required hygiene and consumer protection standards could face strict legal action, financial penalties and suspension of operations under prevailing regulations.
Unseasonal hailstorms damage ripening paddy crops in Bhojpur and eastern hill districts
Unseasonal hailstorms swept through several parts of Bhojpur and neighbouring eastern hill districts on Wednesday, causing damage to mature paddy crops shortly before the harvest season. Farmers in Bhojpur Municipality, Shadananda Municipality, Hatuwagadhi, Temkemaiyung, Pauwadungma and Aamchowk reported crop damage after heavy hailstones struck standing paddy fields and harvested bundles left outside to dry. The sudden weather disturbances have raised concerns among farming communities, particularly as the crops have already reached the final stage of the growing season. Local agricultural offices have noted that recurring hailstorms and rainfall are posing additional risks to agricultural production in the eastern hills. Farmers fear that the adverse weather could damage ripened grains, flatten standing stalks and significantly reduce overall harvests.
Comment