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 a mixed picture of resilience and structural challenges. While import growth, rising stock market turnover, and higher precious metal prices indicate strong domestic demand and liquidity, the widening trade deficit and Nepal’s continued presence on the FATF grey list highlight persistent external vulnerabilities and governance concerns.
Businesses are pushing for easier access to credit, exporters are seeking government intervention to address trade barriers, and the revival of industries such as Hetauda Textile reflects efforts to strengthen domestic production.
At the same time, developments in agriculture, food safety, infrastructure, and tourism reveal both opportunities and gaps, with declining wheat output, telecommunications shortcomings in key pilgrimage areas, and regulatory enforcement issues underscoring the need for more effective policy implementation.
Overall, the latest developments suggest that while economic activity remains active, sustaining growth will depend on improving productivity, strengthening institutions, boosting exports, and addressing long-standing structural weaknesses.
NEPSE slips marginally as turnover rises to Rs 4.44 billion
The Nepal Stock Exchange (NEPSE) index ended Monday’s trading session slightly lower after fluctuating throughout the day. The benchmark index declined by 1.46 points, or 0.05%, to close at 2,700.65 points. Despite the minor drop, daily turnover increased to Rs 4.44 billion. A total of 8.13 million shares changed hands through 90,862 transactions. Market sentiment remained weak, with declining stocks outnumbering gainers and 10 of the 13 sectoral indices ending lower. Gains were recorded in the finance, trading, and microfinance sectors, while hydropower, banking, and insurance shares came under pressure. Two hydropower companies hit the 15% upper circuit limit, while Sopan Pharmaceuticals recorded the highest turnover.
FATF keeps Nepal on grey list over limited reform progress
The Financial Action Task Force (FATF) has decided to retain Nepal on its grey list of jurisdictions under increased monitoring following its plenary meeting in Paris. The international anti-money laundering watchdog said Nepal has yet to make adequate progress despite previous commitments to reform. FATF urged the country to fully implement its action plan, including stronger oversight of banks, cooperatives, casinos, and the real estate sector, as well as stricter action against illegal hundi networks. The organization also called for better coordination among enforcement agencies to improve investigations, prosecutions, and asset recovery efforts.
Gold and silver prices post gains in domestic market
Gold and silver prices increased in Nepal on Monday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of fine gold rose by Rs 800 per tola to Rs 197,900, while hallmark gold was traded at Rs 197,000 per tola. Silver prices also moved higher, increasing by Rs 15 per tola to reach Rs 2,230. The upward movement follows recent fluctuations in precious metals markets and mirrors trends in international markets, where both gold and silver have shown renewed strength. Traders and consumers continue to closely monitor price movements amid evolving global economic conditions and market demand.
Imports approach Rs 1.9 trillion in first 11 months of fiscal year
Nepal’s import bill climbed to nearly Rs 1.9 trillion during the first 11 months of the current fiscal year, according to data from the Department of Customs. Total imports reached Rs 1.894 trillion, marking a 15.16% increase compared to the same period last year. Exports also recorded growth, rising 12.28% to Rs 277.96 billion from Rs 247.57 billion a year earlier. However, imports expanded at a faster pace than exports, resulting in a wider trade gap. Consequently, the country’s trade deficit grew by 15.67% over the review period.
Transport department partially lifts ban on public vehicle registration
The Department of Transport Management (DoTM) has eased its suspension on the registration of new public transport vehicles. Registration will now be permitted for vehicles whose import process began through Letters of Credit (LCs) opened by May 22, 2026, and which have already entered Nepal. Importers must provide verified documentation confirming both the opening of the LC and the vehicle’s arrival. The department had halted registrations nationwide in April, citing worsening traffic congestion, poor transport management, and increasing air pollution. The latest decision offers partial relief to importers affected by the earlier restriction.
Tea sector seeks government intervention over export disruptions
Tea producers and entrepreneurs have called on the government to take urgent action to address export obstacles at the Indian border caused by stricter testing and certification requirements. A delegation led by the Suryodaya Orthodox Tea Producers Association submitted a memorandum to relevant ministries, urging diplomatic engagement to resolve the issue. Industry representatives said mandatory laboratory testing, online registration requirements, and delays in obtaining certification reports have left around 300,000 kilograms of tea stranded at the border and another 1 million kilograms stored in domestic warehouses. They warned that prolonged delays could increase costs, affect product quality, and reduce competitiveness in export markets.
Gold theft victims protest at RBB headquarters demanding compensation
Borrowers whose pledged gold was stolen from the New Baneshwor branch of Rastriya Banijya Bank (RBB) staged a protest outside the bank’s central office at Singha Durbar Plaza, demanding full compensation. The dispute relates to the theft of approximately 18 kilograms of gold and Rs 52.5 million in cash during unrest at the branch last year. Protesters accused the bank of calculating compensation based on outdated gold prices rather than current market values or returning equivalent quantities of gold. Demonstrators said they had already repaid their loans but had yet to receive adequate compensation. Police were deployed after some protesters attempted to enter the premises.
Koshi business community urges higher working capital loan limits
Business and industrial associations in Koshi Province have urged Nepal Rastra Bank (NRB) to allow working capital loans of up to 60% of annual turnover on a permanent basis, with lending determined by cash flow and industry type. As part of consultations on the upcoming monetary policy, representatives submitted recommendations to NRB’s Biratnagar office. Their proposals include separate lending policies for manufacturing and trading businesses, lower risk premiums for manufacturers, revisions to lending ratios, debt restructuring measures, and tighter foreign exchange spreads. They argued that credit growth remains weak despite ample liquidity due to rising non-performing loans and cumbersome lending procedures.
Government intensifies efforts to revive Hetauda Textile Industry
The government has accelerated preparations to restart the long-defunct Hetauda Textile Industry following a new policy directive. Established in 1975 and closed in 2000 due to financial and management problems, the state-owned enterprise is currently undergoing technical inspections and structural assessments. Officials say most of the machinery remains functional and can be restored with minor repairs. The revival initiative is being coordinated by the Office of the Prime Minister in collaboration with the Ministry of Industry, Commerce and Supplies and local authorities. The plan also includes reviving related supply chains such as cotton production in Banke and yarn processing in Butwal, with operations expected to resume within the current fiscal year.
Food safety violations prompt action against businesses in eastern Nepal
Authorities in eastern Nepal have uncovered serious food safety breaches, including fruit beverages containing no fruit and restaurants using prohibited chemicals and expired ingredients. The Department of Food Technology and Quality Control (DFTQC) in Biratnagar has launched enforcement measures and destroyed large quantities of substandard products. In Jhapa, inspectors seized and destroyed 748 cartons of ORA-branded mango and orange drinks worth Rs 492,132 after tests showed they failed to meet the minimum fruit-content requirement. In Biratnagar, officials found a restaurant using toxic chemicals, artificial colouring agents, and expired food items in unhygienic conditions. Legal action and corrective measures have been initiated.
Poor telecommunications affect pilgrims on Damodar Kunda route
Pilgrims travelling to the sacred Damodar Kunda in Mustang are facing significant challenges due to inadequate telecommunications coverage along much of the route. While limited mobile service is available near Yara village, the section between Ghime Thatty and Damodar Kunda remains without communication access. During a tourism interaction programme in Jomsom, stakeholders emphasized that reliable connectivity is crucial for safety at the high-altitude pilgrimage site, where altitude-related health problems are common. Concerns were also raised about the lack of signboards and shelters along the trail. Authorities have proposed installing a telecommunications tower and improving infrastructure to enhance safety and accessibility.
Lumbini Provincial Assembly postpones budget session
The Lumbini Provincial Assembly meeting scheduled for Monday has been postponed by one day after lawmakers requested additional time to review budget documents. Assembly Secretary Durlabh Kumar Pun Magar said the provincial government sought the postponement to allow members to study the budget and expenditure “Red Book” for the upcoming fiscal year in greater detail. Following the Speaker’s directive, the meeting has been rescheduled for 3:00 pm on June 23.
Malika Rural Municipality launches branded turmeric initiative
Malika Rural Municipality in Gulmi has started branding and packaging locally grown turmeric in an effort to promote indigenous agricultural products and boost rural incomes. The initiative is being implemented by the Didibahini Agriculture and Livestock Development Women’s Cooperative, which is marketing organic turmeric produced in Darling, Ward No. 2, at Rs 400 per kilogram. Established under the Small Farmer and Youth Entrepreneurship Development Project run by Janabikas Kendra, the cooperative operates a processing facility equipped with machinery and technical assistance provided through the programme. Women farmers from wards 1, 2, and 3 supply turmeric for processing. The cooperative also plans to introduce other locally produced goods, including corn flour and organic grains, to expand income-generating opportunities in the community.
Raskot Municipality unveils Rs 566.75 million budget for FY 2026/27
Raskot Municipality in Kalikot has presented a budget of Rs 566.75 million for the upcoming fiscal year 2026/27 during its 18th Municipal Assembly held on Sunday. Deputy Mayor Maniraj Baral tabled the budget, which draws funding from federal, provincial, and internal sources, with local revenue accounting for only 3.09% of the total. Of the overall allocation, 61.42% has been designated for recurrent expenditure, while 38.58% will be directed toward capital spending. Social development has received the largest share, accounting for 64.88% of the budget, with significant allocations for the education and health sectors. Funding has also been earmarked for infrastructure development, governance, and environmental programmes. The municipality has adopted the vision of “Prosperous Raskot, Happy Residents” as its guiding objective.
Wheat output declines across Madhesh Province
Wheat production in Madhesh Province has fallen this year despite the region’s status as one of Nepal’s leading agricultural hubs. According to the Directorate of Agriculture Development, the province produced 543,160 metric tonnes of wheat from 300,732 hectares of cultivated land, with an average yield of 1.8 metric tonnes per hectare. Dhanusha recorded the highest production, followed by Saptari, Mahottari, Sarlahi, Bara, and Rautahat, although productivity levels varied by district. Agricultural officials attributed the decline to unfavourable weather conditions, pest infestations, and insufficient access to irrigation facilities and quality seeds, all of which negatively affected crop yields during the season.
Kathmandu traffic police collect Rs 1.05 million in fines within 24 hours
The Kathmandu Valley Traffic Police Office collected Rs 1.05 million in fines after taking action against 2,076 motorists for violating traffic regulations over a 24-hour period. According to police spokesperson SP Naresh Raj Subedi, 228 drivers were penalized for speeding, 117 for running red lights, 93 for operating unauthorized ride-sharing services, and 88 for driving under the influence of alcohol. Authorities also fined 129 motorists for lane discipline violations, 90 for parking on footpaths, 88 for driving in the wrong direction on one-way roads, and 57 for unnecessary use of vehicle horns in restricted zones. An additional 1,186 drivers were booked for various other traffic offences.
Bagmati records higher literacy and lower poverty than national average
Bagmati Province has achieved socio-economic indicators that exceed national averages, according to provincial officials. The province’s literacy rate has reached 82.1%, compared to the national average of 76.2%. Economic growth in Bagmati is projected at 5.40% for the current fiscal year, surpassing the national growth target of 3.85%. Officials estimate that the province will contribute approximately 36.7% of Nepal’s total gross domestic product, generating around Rs 2.423 trillion of the national GDP estimated at Rs 6.6 trillion. Per capita income in the province is expected to reach USD 2,644, the highest among all provinces. Poverty rates, including both absolute and multidimensional poverty, are also lower than the national average.
Dang’s Janti Dhunga emerges as a growing tourist attraction
Janti Dhunga in Ward No. 13 of Tulsipur Sub-Metropolitan City, Dang, is rapidly gaining popularity as a tourism destination. Situated within the Jhankri Dhunga Community Forest, the site is known for its unusual natural rock formations, many of which resemble human figures. The attraction has gained wider recognition through photos and videos shared on social media platforms. Local folklore links the area to a story of a wedding procession that mysteriously disappeared there, giving rise to the site’s name. Increased visitor numbers have stimulated local economic activity, leading to the establishment of temporary businesses and basic infrastructure. Residents believe the destination has the potential to become a major tourist hub if properly conserved and promoted.
RSP convention consumes up to 900 kg of mutton daily
Diyalo Foodland has been managing catering services for the first national convention of the Rastriya Swatantra Party (RSP) in Bharatpur, Chitwan. Staff from its branches in Bharatpur, Butwal, and Kathmandu, along with personnel from five outlets, have been deployed to serve participants attending the event from June 21 to 23. According to Operations Manager Prem Khatri, meals are being provided according to a fixed schedule that includes breakfast, lunch, snacks, and vegetarian dinner. The catering service is serving approximately 5,000 people, including delegates, observers, and security personnel. The convention has generated significant food demand, with daily mutton consumption reaching as much as 900 kilograms.
Feasibility assessment begins for monorail project at Guptabaraha Temple
A preliminary feasibility study has commenced for a proposed monorail system at the Guptabaraha Temple area in Barahachhetra Municipality-1, Sunsari, following budget allocation by the Koshi Province Government for the upcoming fiscal year. A team of South Korean experts has arrived to evaluate the geographical and technical feasibility of the project. The proposed monorail is intended to improve access to the temple, which is located approximately 400 metres below the main roadway and is difficult for pilgrims to reach. Authorities are also considering complementary tourism infrastructure such as a skywalk and a glass bridge. If implemented, the project could become Nepal’s first monorail system and significantly enhance religious tourism and local economic activity.
Higher customs duties dampen demand for gold
Demand for gold in Nepal has dropped significantly after the government increased customs duties on gold and silver imports from 10% to 20% under the new fiscal year budget. The revised tariff, which took effect on May 29, 2026, pushed domestic gold prices up by around Rs 20,500 per tola, briefly driving prices to Rs 311,100 per tola before easing to approximately Rs 287,300. Although international gold prices have softened in recent weeks, domestic rates remain elevated due to higher import costs. Market analysts say the tax increase has further weakened consumer demand, with daily gold consumption falling to around 6–7 kilograms despite the ongoing wedding season.
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