KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economy is showing mixed signals, with weakening investor confidence and slowing market activity contrasting against strong liquidity, rising institutional investment, and growing infrastructure-related demand. The continued decline in the NEPSE index alongside turnover falling below Rs 3 billion reflects cautious sentiment among retail investors despite rising share-backed lending and overwhelming demand for IPOs such as Yambaling Hydropower, indicating that speculative appetite remains active.
Nepal Rastra Bank’s absorption of Rs 40 billion in excess liquidity suggests banks still hold ample funds amid weak private-sector credit expansion, while mutual funds are emerging as a preferred alternative as deposit returns remain low. At the same time, robust EV imports from China highlight shifting consumer preferences and expanding trade activity, although Nepal’s external sector faces challenges from India’s stricter tea export testing rules and customs delays at Birgunj.
Government efforts to expand social security coverage, strengthen border controls, and push PPP-based development projects indicate a more interventionist policy approach, but persistent implementation concerns, infrastructure vulnerabilities in Karnali, weak agricultural price support, and governance issues at local levels continue to expose structural weaknesses in the broader economy.
NEPSE declines further as turnover drops below Rs 3 billion
The Nepal Stock Exchange (NEPSE) index fell by 4.15 points on Wednesday, marking the third trading day of the week, while daily turnover also declined significantly. The benchmark index slipped 0.15 percent to close at 2740.25, and the sensitive index decreased by 0.70 points to 467.55. The float index dropped 0.19 percent, while the sensitive float index edged down 0.16 percent. A total of 5.64 million shares from 339 companies were traded through 42,176 transactions, resulting in turnover of Rs 2.807 billion. This was notably lower than Tuesday’s turnover of Rs 4.665 billion and Monday’s Rs 4.613 billion. Share prices of 82 companies increased, 176 declined, and 12 remained unchanged. Among the 13 trading groups, only the Manufacturing and Processing sector, which rose 0.47 percent, and the Trading group, up 1.50 percent, closed higher. Major sectors such as Commercial Banks, Hotels and Tourism, Hydropower, Finance, Microfinance, Life Insurance, and Non-Life Insurance all ended in negative territory.
Gold prices decline by Rs 700 in domestic market
Gold and silver prices experienced minor fluctuations in Nepal’s domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of hallmark gold fell by Rs 700 per tola, while silver increased by Rs 15. Hallmark gold is now priced at Rs 302,200 per tola, whereas silver is trading at Rs 5,710 per tola. On Tuesday, gold was traded at Rs 302,900 per tola and silver at Rs 5,695 per tola. Internationally, gold was trading at USD 4,725 per ounce, while silver stood at USD 87 per ounce, according to international market reports.
NRB absorbs Rs 40 billion in excess liquidity
To control surplus liquidity in the banking sector, Nepal Rastra Bank absorbed Rs 40 billion through a deposit collection instrument on Wednesday. The Monetary Management Department issued a 21-day deposit collection facility with interest rates determined through competitive bidding. Both the principal and interest will be repaid on June 24. Class ‘A’, ‘B’, and ‘C’ financial institutions were eligible to participate in the online bidding process, which required a minimum bid amount of Rs 100 million. The move is part of the central bank’s ongoing efforts to maintain balanced market liquidity.
NOC Executive Director Chandika Bhatta steps down
Chandika Bhatta has resigned as Executive Director of Nepal Oil Corporation (NOC). He submitted his resignation letter on Wednesday to Minister for Industry, Commerce and Supplies Gauri Kumari Yadav. Reports indicate that his resignation followed the government’s request for politically appointed officials to resign in order to support smoother administrative operations. Bhatta reportedly agreed to step aside believing it would help facilitate government functioning.
Wagle proposes 15-day salary payments and increased border security budget
Speaking at a meeting of the economics committee on Wednesday, Finance Minister Swarnim Wagle said the market has shown greater activity after the introduction of bi-monthly salary disbursements and a two-day weekly public holiday. He also announced plans to allocate a larger budget to the Police and Armed Police Force to strengthen border control and reduce revenue leakage. In addition, the Ministry of Home Affairs has been directed to manage 651 motorcycles and 41 cars stranded at customs checkpoints to prevent potential misuse by officials. The government further confirmed receipt of reports on three of the seven struggling projects, with plans to operate all seven through a Public-Private Partnership (PPP) model.
Nepal Telecom records 9.85 percent profit growth over nine months
Nepal Telecom posted a net profit of Rs 6.272 billion during the first nine months of the current fiscal year, representing a 9.85 percent increase from the same period last year. Total operating revenue rose 2.42 percent to Rs 25.92 billion, largely driven by an additional Rs 577.4 million in GSM mobile revenue and improved cost management. The company’s earnings per share (EPS) increased to Rs 46.47. However, income earned from bank deposits declined by 20.57 percent due to lower market interest rates. Overall, Nepal Telecom’s total income reached Rs 28.85 billion during the review period.
Share-backed loans rise 13.4 percent over nine months
According to Nepal Rastra Bank, loans issued against pledged shares reached Rs 159.488 billion by mid-April. This marks a 13.4 percent increase compared to the end of the previous fiscal year on July 16. Between mid-March and mid-April alone, these loans increased by Rs 3.21 billion. Notable growth was recorded in smaller loans below Rs 2.5 million, which jumped 47.2 percent to Rs 12 billion. Meanwhile, larger loans exceeding Rs 10 million increased by 11.1 percent, reaching Rs 109 billion.
Mutual funds gain attention as a strategic investment choice during market volatility
Financial analysts are increasingly recommending mutual funds as a relatively safer investment option for retail investors during periods of stock market uncertainty. Nepal currently has 14 open-ended and 43 closed-ended mutual fund schemes, with closed-ended funds traded directly on the stock exchange. These investment vehicles offer advantages such as professional fund management, diversified portfolios, and strategic purchasing during market downturns, helping investors reduce their average acquisition costs. With savings account interest rates falling below 3 percent and fixed deposit returns below 6 percent, mutual funds are being promoted for their potential to generate stronger long-term returns and dividends. Investors are encouraged to review factors such as Net Asset Value (NAV) and past dividend records before making investment decisions.
Tea exports to India come to a standstill over new lab testing requirements
Tea exports from Nepal to India have completely halted since April 27 following the implementation of a new Standard Operating Procedure (SOP) by the Tea Board of India. The regulation, which became mandatory on May 1, requires every truck carrying tea to undergo separate laboratory testing in Kolkata, a process that takes between 10 and 15 days. Previously, a single test report remained valid for three months or covered up to 20 trucks. Industry stakeholders warn that the revised rule adds an estimated Rs 11,750 per sample in extra costs and may damage tea quality because of extended transportation delays. Since 50 percent of Nepal’s CTC tea and 90 percent of its Orthodox tea are exported to India, the sector is facing a serious setback. By mid-April, tea exports to India had generated Rs 1.02 billion in revenue.
Govt plans to include temporary and contract workers in Social Security Fund
The Ministry of Finance has granted preliminary approval to the Ministry of Labour, Employment, and Social Security to bring temporary, contract-based, and daily wage government workers under the Social Security Fund (SSF). The decision follows a ruling by the Supreme Court and provisions outlined in the fiscal year 2025/26 budget. A dedicated package is also being prepared for inclusion in the fiscal year 2026/27 budget. Under the proposed arrangement, the government will contribute 20 percent as the employer, while workers will contribute 11 percent based on at least 60 percent of their basic salary. The policy is expected to benefit around 35,000 workers currently paid through federal, provincial, and local government budgets. At present, the SSF has approximately 2.9 million members and a fund balance of Rs 110 billion.
Private sector remains cautiously hopeful about new government policies
Business leaders in Chitwan have adopted a cautious “wait-and-see” approach toward the government’s newly unveiled policies and programs for the upcoming fiscal year. Organizations including the Chitwan Chamber of Commerce and Industry and the Chitwan Industry Association described the policies as encouraging, particularly measures such as the one-door system and electricity reserve plans. However, they stressed that the real impact will depend on budget allocation and effective implementation. Tourism entrepreneurs said the declaration of 2028–29 as a “Visit Year” offers renewed optimism for the tourism industry. At the same time, agricultural organizations, including the Nepal Poultry Federation, urged the government to address overlooked concerns in the upcoming budget to ensure a more investment-friendly business environment.
Ministry begins restoration work on damaged transmission towers in Karnali
The Ministry of Energy, Water Resources, and Irrigation has started repair work to restore electricity services in Karnali Province after two towers along the Kohalpur–Surkhet 132 kV transmission line collapsed due to trees falling during a storm. Energy Minister Biraj Bhakta Shrestha has directed officials to immediately investigate the incident and begin reconstruction work. Repairs are expected to take around three weeks because the tower foundations must be rebuilt entirely. In the meantime, electricity is being supplied through an older 33 kV transmission line, although its capacity is inadequate to meet regional demand. A probe committee headed by Raman Raj Sharma has been formed to investigate the incident involving the RS Infra construction company.
Tatopani logs Rs 18.939 billion in electric vehicle imports over two years
The Tatopani Customs Office reported that 7,492 electric vehicles (EVs) valued at Rs 18.939 billion were imported from China through the Khasa route during the past two fiscal years. The imports generated Rs 10.456 billion in government revenue. During the current fiscal year 2082/83 up to mid-March, imports included 934 cars and jeeps in the 51–100 kW category, 479 microbuses, along with several delivery vans and three-wheelers. The previous fiscal year 2024/25 also recorded high import volumes, including 888 SUVs in the 50 kW segment and 809 microbuses, highlighting growing demand for Chinese EVs in Nepal.
Indian customs delays cargo clearance at Birgunj ICP
Despite the establishment of Integrated Check Posts (ICP) to improve trade facilitation, Indian customs officials have reportedly been delaying the clearance of Nepal-bound cargo trucks in the morning hours. According to management at the Birgunj Integrated Check Post, the Nepali side is prepared to receive cargo vehicles from 7:00 AM onward. However, Indian authorities rarely release trucks before 11:00 AM, citing staff shortages and the delayed arrival of personnel from Raxaul. Officials at Birgunj Customs Office stated that the matter has repeatedly been raised during bilateral meetings, although implementation remains difficult. The local administration in Parsa District has pledged to coordinate through the Border Security Coordination Committee to address the ongoing delays.
Kathmandu Valley reports 1,687 traffic violations in 24 hours
Authorities in the Kathmandu Valley recorded 1,687 traffic rule violations over the past 24 hours, collecting Rs 2.31 million in fines. According to the Kathmandu Valley Traffic Police Office, 85 motorists were penalized for drunk driving, while 163 drivers were booked for operating ride-sharing services against existing regulations. In addition, 142 drivers were fined for violating traffic lights and 117 for speeding. Police also recorded 66 cases involving lane discipline violations and 86 incidents of unnecessary honking in restricted zones. Another 98 vehicles were found illegally parked on roadsides and pavements, while 121 drivers were penalized for traveling on one-way routes. Authorities also documented 804 additional traffic-related offenses during the same period.
Tokha Municipality penalizes 46 businesses during market inspection campaign
Tokha Municipality has taken action against 46 businesses during a market monitoring campaign launched on May 8 across its 11 wards to strengthen consumer protection and improve market regulation. According to municipal officials, inspections uncovered several violations, including failure to renew business registrations, the sale of expired goods, absence of price lists, poor sanitation in meat shops, and non-compliance with operating standards. Chief Administrative Officer Kamal Bhattarai stated that 39 businesses — including meat and fish shops, dairy stores, veterinary medicine outlets, handicraft stores, and grocery shops — received formal warnings. Under the Tokha Municipality Market Monitoring Directives, six businesses were fined amounts ranging from Rs 1,000 to Rs 50,000, while one shop was shut down entirely.
Local government suspends services for contractors with unpaid lease dues
Following an executive meeting held on April 28, Bhajani Municipality has halted all non-essential administrative services for contractors and companies that have failed to clear lease payments for local ponds. The municipality depends heavily on pond leases as a major source of internal revenue, but outstanding dues from 27 companies and individuals have reached Rs 56.9 million. The largest defaulter is Kailali Matsya and Agriculture Company, which owes more than Rs 19.2 million. The restrictions also apply to a sitting ward member whose outstanding lease amount, registered under his wife’s name, totals approximately Rs 2.2 million. Municipal authorities stated that services will resume only after all debts are fully settled.
Yambaling Hydropower allots IPO shares through lottery system
The Initial Public Offering (IPO) of Yambaling Hydropower Limited was allotted on Wednesday at the office of its issue manager, Muktinath Capital. The company had issued 1,743,000 ordinary shares worth Rs 174.3 million between April 29 and May 5. The offering attracted applications from 2,982,498 investors seeking more than 32.4 million shares, making the IPO heavily oversubscribed. After 44,416 applications were rejected as invalid, 174,300 successful applicants received 10 shares each through a lottery-based allotment process.
Farmers reject government-fixed minimum support price for wheat
The Food Management and Trading Company in Mahendranagar has failed to purchase wheat from local farmers for the past five years because producers consider the government-set Minimum Support Price (MSP) too low. For the current year, the government fixed the MSP for wheat at Rs 3,945 per quintal. Farmers argue that the price does not adequately cover production expenses or rising fuel costs. As a result, although the company allocated a procurement quota of 3,000 quintals last year, it was unable to purchase any wheat and has therefore set no quota for the current year. Farmers in Kanchanpur District reported that private mill operators are currently buying wheat at Rs 4,100 per quintal, compared to Rs 4,600 last year, leaving growers with lower returns and mounting financial pressure.
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