KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
The government’s recent initiatives reflect a broad push to strengthen Nepal’s economic resilience through infrastructure expansion, energy development, trade facilitation and improved public services, although implementation gaps and institutional challenges remain. Progress in cross-border electricity trade, including plans to increase transmission capacity with India and develop new power lines, could expand export opportunities as domestic generation grows.
However, flood damage to the Kali Gandaki Corridor and declining micro-hydropower output in Lamjung underscore the vulnerability of energy infrastructure and the persistent electricity-access gap in remote communities. Similarly, expanded irrigation facilities, clean cooking technologies and renewable energy projects signal efforts to improve agricultural productivity, promote cleaner household energy and widen access to essential services.
The temporary reopening of the Tatopani border crossing ahead of Dashain highlights the importance of responsive trade diplomacy in preventing supply disruptions and limiting seasonal price pressures, while DDC’s additional dairy exports to Dubai offer a promising avenue for diversifying markets for Nepali products. At the same time, contractors’ complaints about bureaucratic hurdles point to administrative inefficiencies that could undermine infrastructure delivery.
Directives from the Health Insurance Board and stronger market surveillance also demonstrate the need for accountability in public services and consumer protection. Overall, these developments indicate policy momentum, but sustainable results will depend on timely project execution, transparent governance, resilient infrastructure and measurable improvements in livelihoods, market access and service delivery.
DDC sends additional ghee and yak cheese shipment to Dubai
The state-owned Dairy Development Corporation (DDC) has dispatched an additional shipment of 1,500 kilograms of ghee and 150 kilograms of yak cheese to Dubai to meet demand in the United Arab Emirates (UAE), particularly during the festive season. The latest consignment follows an initial trial shipment of 1,500 kilograms of ghee that reportedly received a positive response from consumers. According to the corporation’s export partner, Rato ra Chandra-Surya International, the products are being sold through Matribhoomi General Trading LLC at three locations near metro stations in Dubai. The DDC general manager said export volumes would be gradually increased based on feedback from international markets. The products feature packaging in Nepali, English and Arabic to cater to a wider consumer base. The additional shipment marks a further step in the corporation’s efforts to expand the overseas market for Nepali dairy products.
Tatopani border crossing to reopen for three days
The Tatopani border crossing, a key trade route between Nepal and China, will reopen temporarily for three days following discussions between Minister for Industry, Commerce and Supplies Deepak Kumar Sah and Chinese officials. The decision came after Chinese authorities responded positively to a formal request from Nepal to facilitate the import of essential goods ahead of the Dashain festival. The crossing will operate from today (October 18 to 20), allowing cargo trucks and freight vehicles stranded on the Chinese side to enter Nepal, provided they have completed customs clearance. The government had stepped up diplomatic and trade-level efforts amid concerns over possible shortages and price increases during the festive season. The delay in the movement of containers carrying Chinese goods had affected traders and supply chains. The temporary reopening is expected to help bring clothing, fruits and other essential commodities to the Nepali market in time for Dashain, easing pressure on businesses and consumers.
Govt advances plans for new cross-border power transmission lines
Nepal has moved forward with plans to develop additional cross-border electricity transmission lines aimed at increasing power exports and strengthening regional energy trade. The detailed project report (DPR) for the proposed Motihari–Nijgadh 400 kV transmission line has been approved, with the project expected to support expanded electricity exports by fiscal year 2034/35. Meanwhile, December 2028 has been set as the completion target for the Chameliya–Dhauliganga 220 kV transmission line. The government has also initiated the process of establishing a joint company between the Nepal Electricity Authority (NEA) and India’s Power Grid Corporation to develop the Inaruwa–New Purnea and Dododhara (New Lamki)–Bareilly 400 kV transmission lines. The proposed projects are expected to strengthen Nepal’s cross-border transmission infrastructure and create additional capacity for electricity exports as domestic generation expands.
Govt expands irrigation facilities to an additional 3,815 hectares
Five major irrigation projects have extended irrigation facilities to an additional 3,815 hectares of land during the first six months of the current government, according to the reported progress in the water resources and irrigation sectors. The Sikta Irrigation Project accounted for the largest expansion, covering 1,300 hectares. The Mahakali Project added irrigation facilities to 1,155 hectares, followed by Badkapath with 610 hectares, Babai with 600 hectares and Rani Jamara Kulariya with 150 hectares. The expansion is part of the government’s efforts to improve irrigation access and strengthen agricultural infrastructure. Reliable irrigation facilities can help farmers manage water supplies more effectively and reduce dependence on rainfall.
Nepal and India agree to expand cross-border electricity trade
Nepal and India have agreed to increase electricity transmission capacity through the Dhalkebar–Muzaffarpur and Dhalkebar–Sitamarhi 400 kV transmission lines, according to the Prime Minister’s Office (PMO). Under the agreement, Nepal’s electricity import capacity will rise from 1,000 megawatts (MW) to 1,400 MW, while export capacity will increase from 1,100 MW to 1,650 MW. The government has also approved a plan to replace conductors on the Muzaffarpur–Dhalkebar 400 kV transmission line to enhance its capacity. Meanwhile, the Nepali section of the New Butwal–Gorakhpur 400 kV transmission line is scheduled for completion by August 2026. The line will initially operate at 220 kV for electricity imports and exports until the necessary substations are ready. The expanded transmission capacity is expected to support greater cross-border electricity trade and strengthen Nepal’s ability to exchange power with India.
Health Insurance Board warns hospitals against unnecessary tests and service delays
The Health Insurance Board has directed hospitals and other empanelled health institutions to stop unnecessary medical tests, delays in treatment and demands for out-of-pocket payments for medicines and services covered by health insurance. In a notice, the board said reimbursement claims for vitamin D, vitamin B12 and thyroid function tests (TFT) would be rejected unless the tests were supported by patients’ symptoms and clinical necessity. The board also instructed health institutions to eliminate quota-based restrictions and discriminatory delays in providing services. Hospitals have been asked to supply routine medicines for up to three months in accordance with a board decision dated December 13, 2023. Internal Insurance Review Committees must verify and certify claim documents before submission. Institutions found violating the provisions may face action under Section 12 of the Health Insurance Act, 2017, and Rule 19 of the Health Insurance Regulations, 2018. The board’s directive aims to improve access to insured healthcare services, strengthen compliance and prevent unnecessary expenditure under the insurance scheme.
13 candidates shortlisted for Nepal Aushadhi Limited General Manager post
Thirteen candidates have been shortlisted for the vacant general manager position at state-owned Nepal Aushadhi Limited, with their professional action plan presentations and interviews scheduled for November 1–3. The Ministry of Industry, Commerce and Supplies published the schedule after approving the applications submitted through an open competition. According to a ministry notice, all 13 shortlisted candidates will present their professional action plans and attend interviews during the three-day selection process. The recruitment process is intended to fill the leadership vacancy at the state-owned pharmaceutical company through a competitive selection procedure.
Investment Board rejects allegations of improper gifts to officials
The Office of the Investment Board has rejected social media allegations that government officials received improper gifts from project contractors, saying items were delivered to its premises without prior notice or institutional approval. In a statement, the board said unidentified individuals entered its office premises on Thursday while Chief Executive Officer Yanki Ukyab and staff were attending an official meeting and left baskets containing sweets and biscuits. The board disputed social media claims that officials had received liquor, iPhones and other luxury items. Board Spokesperson and Joint Secretary Bhupendra Thapa reiterated the institution’s commitment to transparency and said legal action could be pursued against campaigns intended to damage the reputation of its staff. The board’s clarification came amid the circulation of videos and allegations on social media concerning the delivery of gifts to government officials.
FCAN chief says bureaucratic hurdles delay construction projects
Federation of Contractors’ Association of Nepal (FCAN) President Nicholas Pandey has said construction companies can deliver quality infrastructure on time if excessive bureaucratic procedures and administrative obstacles are removed. Speaking at the inauguration of a 267-metre suspension bridge connecting Dhungebazar and Trishuli Bazar in Nuwakot, which was completed in a month, Pandey said contractors often have to navigate as many as 50 separate administrative approvals, contributing to delays in project implementation. He argued that cumbersome procedures undermine timely construction despite contractors’ capacity to complete projects efficiently. Pandey also highlighted the role of private contractors in emergency rescue operations following recent monsoon floods, saying they had deployed their own heavy equipment when government machinery proved insufficient. He called on the authorities to streamline approval processes and recognise the contribution of private contractors, while urging a more balanced assessment of the causes of delays in public infrastructure projects.
Government reports gains in small hydropower and solar energy
Micro and small hydropower projects have added 693 kilowatts (kW) of electricity generation capacity, while solar mini-grid projects have contributed another 841 kW during the current government’s first six months, according to the Prime Minister’s Office (PMO). The government has also completed the reconstruction of 18 micro and small hydropower projects damaged by disasters, helping restore electricity generation infrastructure. In a further step towards developing clean energy, an agreement has been signed with the Asian Development Bank (ADB) to provide transaction advisory services for transmission lines and battery energy storage systems under the public-private partnership (PPP) model. The initiatives form part of the government’s reported progress in expanding energy infrastructure, restoring disaster-damaged facilities and supporting renewable energy development.
Government steps up electricity expansion in Madhesh and Karnali
The government has accelerated electricity infrastructure development in Madhesh Province and initiated plans to expand transmission and distribution networks across Karnali Province to improve access to reliable power, according to the Prime Minister’s Office (PMO). In Madhesh, construction of the Chandrapur–Sukhadevchowk and Lahan–Sukhipur transmission lines has been expedited to meet rising electricity demand. The government has also extended electricity services to additional locations through the installation of distribution lines, underground transmission infrastructure and transformers. Meanwhile, work has begun to expand transmission and distribution networks in Karnali, where geographical challenges have made extending electricity access more difficult. The initiative aims to bring electricity services to more communities across the province.
Government distributes 119,500 clean cooking technologies
The government has distributed or installed 119,500 clean cooking technologies during its first six months in office as part of efforts to promote cleaner household energy use. The technologies include household biogas plants, electric stoves and improved cookstoves, according to progress reported by the Prime Minister’s Office (PMO). The initiative complements other energy-sector programmes, including the expansion of electricity infrastructure, development of small hydropower projects and reconstruction of facilities damaged by natural disasters. The government has included the distribution and installation of clean cooking technologies among its achievements in the energy, water resources and irrigation sectors.
Tara Air and Summit Air suspend Pokhara–Jomsom flights amid falling demand
Tara Air and Summit Air have announced the suspension of scheduled flights on the Pokhara–Jomsom route, citing a sharp decline in passenger demand following recent flood-related disruptions in the region. Tara Air is scheduled to suspend services from October 19, while Summit Air has informed ticketing agents that its seasonal operations will remain suspended from October 21. The airlines cited widespread ticket cancellations and a decline in travel demand. The suspension will temporarily leave the mountain route without scheduled private fixed-wing air services, potentially affecting travel to and from Jomsom. The resumption of flights will depend on the recovery of passenger demand and the stabilisation of transport conditions in the affected region.
Surkhet food authority destroys prohibited products sold as ritual ghee
The Office of Food Technology and Quality Control in Surkhet has seized and destroyed containers of prohibited fat-based products allegedly marketed as ghee for religious rituals during inspections in Birendranagar. The inspections were carried out amid increased consumer activity ahead of the festive season. Officials recovered products labelled “Shri Krishna Pooja Ghee” from local businesses and identified them as prohibited substitutes containing unauthorised fats, according to the supplied report. Information Officer Santosh Dahal said the commercial sale of uncertified substitute fats for ritual lighting and religious homam ceremonies violated food safety directives issued by the Department of Food Technology and Quality Control. Authorities have issued formal warnings to the businesses concerned and stepped up market monitoring to prevent the sale of prohibited products during the festive period. The inspections are intended to protect consumers and ensure that products sold in the market comply with food safety requirements.
Repairs to flood-damaged Kali Gandaki Corridor transmission line near completion
Restoration work on the flood-damaged 220-kilovolt Kali Gandaki Corridor transmission line between Dana and Khurkot in Myagdi has entered its final stage following severe damage caused by flash floods and river erosion in early October. Technical teams comprising more than 20 engineers and 50 workers are constructing a temporary transmission tower at Doba in Annapurna Rural Municipality-1 to restore electricity transmission along the corridor. The project is using specialised engineering techniques, described in the supplied report as Canadian methodology. The damage had disrupted the evacuation of 176 megawatts of electricity generated by seven hydropower facilities in Myagdi and Mustang districts. The affected plants include the 5 MW Ghalemdi Khola, 42 MW Myagdi Khola, 38 MW Nilgiri-1, 71 MW Nilgiri-2, 6 MW Rele Khola and 14 MW Thapa Khola hydropower projects. Restoring the transmission line is expected to enable these power plants to resume delivering electricity to the national grid, helping recover generation capacity lost following the disaster.
Declining micro-hydropower output disrupts electricity supply in Lamjung
Residents of several settlements in Lamjung district continue to face power shortages as declining output from micro-hydropower projects leaves communities without a reliable electricity supply, while the national transmission grid has yet to reach some areas. The affected settlements include Pasgaun and Singdi in Kwholasothar Rural Municipality and a village in Rainas Municipality. Around 20 households are still awaiting connection to the national grid. According to Sobit Bahadur Chhetri, chief of the Nepal Electricity Authority’s Distribution Centre in Lamjung, electricity services have reached approximately 44,000 households in the district, but grid expansion remains incomplete in the affected settlements. In Singdi, which has around 220 to 225 households, declining production from the local micro-hydropower project has resulted in daily power cuts. The facility, which previously generated 40 kW, now produces a maximum of just 25 kW, forcing residents to endure outages lasting around four hours a day. The situation highlights the challenges faced by remote communities that continue to depend on small-scale hydropower while awaiting connection to the national grid.
Rupandehi police seize smuggled goods worth Rs 918,000
Police in Rupandehi have seized mobile phone display panels and body components worth Rs 918,000 suspected of being smuggled into Nepal through the border area of Lumbini Sanskritik Municipality-7, Banrahwa. Acting on intelligence, a team from the Lumbini Area Police Office recovered the electronic components, which were allegedly being transported without valid customs documentation. According to District Police Office Information Officer and Deputy Superintendent of Police Krishna Kumar Chand, the seized goods were handed over to the Bhairahawa Customs Office in Belahiya for further legal proceedings. The seizure comes as security agencies continue efforts to curb cross-border smuggling and prevent the illegal entry of commercial goods.
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