KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s latest economic and policy developments present a mixed picture of progress and persistent structural challenges. While foreign direct investment (FDI) commitments declined by nearly Rs 7 billion in FY 2025/26, the approval of more than 1,100 projects indicates continued investor interest, particularly in agriculture, tourism and information technology.
The launch of the direct rail cargo service between Kolkata and Biratnagar marks a significant step towards improving regional connectivity, reducing logistics costs and enhancing trade competitiveness. Efforts to expand domestic production of essential medicines and promote tariff-free exports to the United Kingdom reflect a growing emphasis on self-reliance and export diversification.
At the same time, revenue collections in Madhesh Province and Nepalgunj Customs reveal the continuing impact of economic slowdown, weaker imports and external trade disruptions on public finances. Policy proposals such as creating an Accident Relief Fund demonstrate attempts to strengthen social protection, though their implementation will require broad stakeholder support.
However, governance concerns remain evident, with the reported Rs 205 million procurement irregularity at Nepal Television highlighting weaknesses in public financial management and accountability. Meanwhile, protests by young doctors over labour conditions underscore unresolved issues in the health sector.
Together, these developments suggest that while Nepal is pursuing reforms to modernise its economy and public services, stronger governance, policy consistency and institutional accountability will be essential to sustain investment, improve public trust and achieve long-term economic resilience.
Foreign direct investment commitments decline to Rs 58.01 billion
Foreign direct investment (FDI) commitments in Nepal fell to Rs 58.01 billion in the fiscal year 2025/26, down by nearly Rs 7 billion from around Rs 65 billion in the previous fiscal year. The Department of Industry approved 1,116 projects, which are projected to generate 28,423 jobs. Agriculture and forestry received the largest investment commitments at Rs 23.188 billion, while the information and communication technology (ICT) sector recorded the highest number of projects with 727, worth Rs 2.833 billion. Other major sectors attracting investment included tourism (Rs 13.997 billion), energy (Rs 7.168 billion), services (Rs 4.914 billion), manufacturing (Rs 3.910 billion), infrastructure (Rs 1.804 billion) and mining (Rs 185 million).
Direct rail cargo service begins between Kolkata and Biratnagar
The first direct rail cargo service linking Kolkata Port with the Biratnagar Customs Yard began yesterday, opening a new trade transit corridor between Nepal and India. The inaugural train, flagged off by Consul General Jhakka Prasad Acharya, carried 40 containers of canola grain for Swastik Oil Industries on a Container Corporation of India Limited (CONCOR) service. The route was made possible by amendments to the Nepal-India Transit Treaty on November 4, 2025, and operational guidelines issued on February 26, 2026. Officials say the rail link will reduce transit time by about 24 hours compared to road transport, lowering logistics costs and improving supply chain efficiency. Future services are expected to transport up to 45 containers per trip.
Transport entrepreneurs propose Re 1 fuel levy for accident relief fund
The Federation of Nepalese National Transport Entrepreneurs (FNNTE) has proposed a Re 1 per litre levy on petrol and diesel, along with a Re 1 per unit charge on electric vehicle charging, to establish an Accident Relief Fund. The proposal was submitted by General Secretary Deknath Gautam to Ministers Sunil Lamsal and Sobita Gautam for inclusion in the proposed Vehicles Act, 2026. The federation also suggested allocating one percent of third-party motor insurance premiums and government grants to the fund. The initiative is intended to finance emergency rescue, medical treatment and compensation for road accident victims when insurance coverage or vehicle owners are unable to provide adequate support.
Madhesh Province collects Rs 32.88 billion in revenue
The Ministry of Economic Affairs of Madhesh Province reported revenue collection of Rs 32.88 billion during the last fiscal year. According to Statistical Officer Rajendra Acharya, internal revenue contributed Rs 5.76 billion, including Rs 1.77 billion from land and property registration and Rs 2.27 billion from vehicle taxes. The province also received Rs 8.86 billion in value added tax (VAT), Rs 3.20 billion in excise duty and Rs 10.79 billion in federal grants. Information Officer Ansh Kumar Jha attributed the shortfall in revenue targets to economic liquidity constraints and property damage caused during protests held on September 8 and 9, 2025.
Workshop highlights tariff-free export opportunities in the UK
An interactive programme on expanding Nepali exports to the United Kingdom under the UK Developing Countries Trading Scheme (DCTS) was held yesterday at Hotel Shanker in Kathmandu. Organised by the Department for Business and Trade (DBT), the British Embassy Kathmandu, Nepal in Business – Growth Advisors (NiB-GA), and the Nepal Britain Chamber of Commerce and Industry (NBCCI), the event focused on helping exporters utilise duty-free access for 99 percent of products. British Ambassador Rob Fenn said the DCTS offers flexible rules of origin that can support exports of carpets, tea, handicrafts and other products while boosting bilateral trade and employment.
Nepalgunj Customs collects Rs 20.11 billion in FY 2025/26
The Nepalgunj Customs Office collected Rs 20.115 billion in revenue during the fiscal year 2025/26, a decline of Rs 164.5 million from the previous fiscal year. Customs officials attributed the decrease mainly to lower imports of petroleum products and India’s ban on sugar exports, although they said the fall was smaller than initially anticipated. Revenue collection stood at Rs 20.285 billion in 2024/25, compared with Rs 18.157 billion in 2023/24. Major imports through the customs point include petroleum products, tractors, tillers, polyethylene granules, rice, food grains and iron, while medicinal herbs remain among the principal export commodities.
Health ministry to expand domestic production of essential medicines
The Ministry of Health and Food Safety has begun preparations to expand domestic production of 36 essential medicines through Nepal Aushadhi Limited over the next two years. The ministry plans to sign a memorandum of understanding with the state-owned pharmaceutical company, which currently manufactures 11 essential medicines. Future production will include medicines used to treat chronic illnesses such as hypertension and diabetes. The ministry said it will allocate the necessary budget, prioritise domestically produced medicines in public procurement, and strengthen research, quality testing, licensing and technical capacity. The initiative aims to reduce import dependence, support the domestic pharmaceutical industry and ensure a reliable supply of affordable essential medicines.
Probe finds Rs 205 million irregularity in Nepal Television procurement
An investigation committee has reported financial irregularities exceeding Rs 205 million in Nepal Television’s (NTV) procurement of satellite bandwidth services. The report, submitted to Communications Minister Bikram Timilsina, identified multiple violations of the Public Procurement Act and related regulations, including repeated non-competitive contract renewals and payments made before services commenced. The committee said procurement irregularities dated back to a 2012 agreement, including the selection of a disqualified bidder and the purchase of excess bandwidth at inflated prices. It recommended legal action against former NTV board members and management officials, stating that the procurement failures contributed to a 30-minute nationwide broadcast disruption in June 2022.
Young doctors protest alleged labour exploitation
Interns, resident doctors and other medical personnel staged a protest at Maitighar in Kathmandu today under the banner of the Struggle Committee Against Labour Exploitation of Young and Trainee Doctors. The protesters alleged repeated violations of the Labour Act, 2017, and demanded a maximum working schedule of 12 hours a day and 72 hours a week, a mandatory weekly day off and overtime pay for work exceeding 48 hours per week. They also called for government-mandated salary increases, pay parity with eighth-level government officers and the removal of the one-year work experience requirement for admission to postgraduate medical programmes.
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