KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest economic snapshot reflects a mixed but structurally revealing trajectory for Nepal’s economy, where short-term market optimism contrasts with deeper macroeconomic imbalances. A marginal uptick in NEPSE, driven by a late-session rebound despite declining turnover and broader market weakness, signals cautious investor sentiment rather than sustained confidence.
Meanwhile, the continued widening of the trade deficit—despite notable export growth—highlights Nepal’s persistent dependence on imports, particularly petroleum and food, underscoring weak domestic production and limited value addition. Rising LPG imports despite distribution controls further expose policy inefficiencies, while growing reliance on rice imports reinforces concerns over food security.
On the policy front, the proposed phased capital account liberalization indicates a cautious shift toward financial openness, contingent on institutional readiness. At the same time, regulatory actions in the insurance sector and tax clarifications for ISPs point to tightening governance frameworks.
However, recurring revenue shortfalls at local levels, weather-induced losses in agriculture and industry, and underutilization of arable land in regions like Karnali reveal structural vulnerabilities. Infrastructure expansion, tourism promotion, and digital agriculture initiatives offer some growth momentum, but overall, the economy reflects a pattern of gradual progress constrained by systemic inefficiencies, external dependence, and climate-related risks.
NEPSE inches up as late rebound lifts market
On Monday, the NEPSE index gained 5.01 points (0.17%) to close at 2,936.56, recovering after trading in negative territory for most of the day. The Sensitive Index declined slightly by 0.05% to 505.02, while both the Float and Sensitive Float indices recorded marginal increases. A total of 38.07 million shares of 342 companies were traded through 156,381 transactions, with turnover falling to Rs 15.78 billion from Rs 23.59 billion on Sunday. Share prices of 102 companies rose, 154 declined, and eight remained unchanged. The manufacturing, hydropower, and investment sectors led gains, while banking, tourism, and trading sectors posted losses.
Gold price drops by Rs 6,500 per tola
Gold prices in Nepal declined by Rs 6,500 per tola on Monday, with the new rate set at Rs 275,500 per tola. The price had already fallen by Rs 12,500 the previous day, when it stood at Rs 282,000. Last Monday, gold was traded at Rs 309,500 per tola, while the all-time high remains Rs 339,300 recorded on January 29.
Trade deficit widens in first eight months despite export growth
Nepal’s trade deficit continues to widen, even as both imports and exports increased during the first eight months of the current fiscal year 2025/26. Imports rose by 12.54% to Rs 1.289 trillion, while exports grew by 20.83% to Rs 191.11 billion. India remains the country’s largest trading partner, accounting for Rs 156.66 billion in exports. Processed soybean oil dominated exports, contributing 40% or Rs 75.77 billion, though experts highlight limited value addition. Petroleum products remained the largest import category, accounting for 17% of total imports at Rs 209.99 billion. Nepal currently runs a trade deficit with 120 countries.
NRB study proposes phased capital account liberalization
A study conducted by the Foreign Exchange Management Department of Nepal Rastra Bank (NRB) has suggested a five-phase roadmap for capital account liberalization. The report stresses the need to establish a strong financial safety net before any liberalization. It recommends initially allowing low-risk, long-term strategic equity investments, followed by permitting non-resident Nepalis to invest in listed securities. The third phase envisions portfolio investment in local currency government bonds, while the fourth phase would open short-term external borrowing and cross-border financial investments. Full liberalization is proposed in the final stage, supported by a managed floating exchange rate system based on a basket of the Indian rupee, Chinese yuan, and US dollar.
Mines Department issues extraction permits to 166 firms
The Department of Mines and Geology has granted extraction permits to 166 domestic and international companies for 16 different minerals, including limestone, red clay, and iron. Nearly 100 permits are for limestone mining. The department aims to boost industrial production through the extraction of minerals such as tourmaline, talc, and magnesite. However, challenges such as difficult terrain, lack of advanced technology, and high investment costs persist. Permits are issued only after ensuring environmental standards and local benefit-sharing mechanisms.
LPG imports increase despite half-cylinder policy
Liquefied petroleum gas (LPG) imports rose to a three-month high in Falgun, despite the Nepal Oil Corporation’s decision to implement a half-cylinder distribution policy. Customs data shows that 51,192 tons of LPG were imported between February and mid-March, up from 47,460 tons recorded by mid-January. Total LPG imports in the current fiscal year have reached 372,282 tons, marking an increase of 10,187 tons compared to the same period last year. Although the NOC cited supply disruptions and Middle East tensions for limiting distribution since March 12, overall import volumes have increased year-on-year.
Rice and paddy imports near Rs 28 billion in eight months
Nepal’s reliance on food imports is growing, with rice and paddy imports nearing Rs 28 billion in the first eight months of the fiscal year. According to the Department of Customs, imports totaled Rs 27.904 billion, including 384.8 million kg of paddy worth Rs 14.14 billion, 123.9 million kg of rice worth Rs 7.915 billion, and 51.9 million kg of basmati rice valued at Rs 5.843 billion. Imports between February 13 and March 14 alone exceeded Rs 2.5 billion.
ISPAN welcomes tax waiver on internet maintenance charges
The Internet Service Providers Association of Nepal (ISPAN) has welcomed a decision by the Office of the Attorney General clarifying that up to 50% of fixed broadband fees can be classified as maintenance charges, exempt from telecommunications service charges. ISPAN said the decision prevents additional financial burden on consumers and supports the sustainability of the internet service sector. The association emphasized that previous tax demands on maintenance charges were unjustified.
Insurance authority penalizes firms over hilton hotel case
The Nepal Insurance Authority has taken action against two insurance companies and a broker for violating reinsurance regulations related to the Hilton Hotel arson claim. Himalayan Re-Insurance and The Oriental Insurance were each fined Rs 200,000, while Alliant Reinsurance Broker’s license was suspended for three months. Nepal Re-Insurance CEO Surendra Thapa was also cautioned. Authorities said the firms attempted to transfer a Rs 6 billion liability to the state-owned Nepal Re unlawfully. The case has been forwarded to the Commission for the Investigation of Abuse of Authority.
Korala customs collects Rs 5.71 billion in revenue
The Mustang Customs Office at the Korala border has generated Rs 5.711 billion in revenue between September 16, 2025, and March 21. According to Office Chief Ramesh Khadka, imports during the period reached Rs 12.17 billion, while exports to China stood at Rs 203 million. The checkpoint processed 2,347 electric vehicles and 1,804 cargo containers. Initially used as an alternative route after the closure of Rasuwagadhi and Tatopani due to landslides, the Korala pass has now been fully operationalized and is contributing significantly to national revenue, a sharp rise from its earlier annual collection of just Rs 1.5 million.
Unseasonal rain inflicts rs 60 million loss on Mahottari brick kilns
Brick industries in Mahottari have suffered losses exceeding Rs 60 million due to unseasonal rainfall over the weekend. According to industry representatives, ready-to-bake bricks at around three dozen kilns were destroyed. Individual losses ranged from Rs 800,000 to Rs 2.2 million. The association is compiling data to seek government compensation and subsidies, noting that the peak production season has instead resulted in major financial setbacks.
Windstorms cause Rs 2.8 million loss to Okhaldhunga farmers
Farmers in Okhaldhunga have incurred losses worth Rs 2.8 million following recent windstorms and heavy rainfall. The damage includes destruction of 39 plastic tunnels and vegetable farms, particularly affecting tomatoes, cauliflower, and chilies. A total of 29 commercial farmers in Siddhicharan Municipality and Manebhanjyang Rural Municipality were impacted. Most farmers lack crop insurance, complicating compensation efforts. Authorities are collecting detailed data to coordinate relief measures.
Tulsipur falls short of revenue target
Tulsipur Sub-Metropolitan City in Dang has collected only Rs 166.1 million in revenue in the first eight months of the fiscal year, far below its target of Rs 732 million. Officials attributed the shortfall to delays in renewing contracts related to herbs, scrap, and infrastructure, as well as disruptions caused by the Gen Z protests. The destruction of contract documents and delays in environmental approvals have further hindered revenue collection. Out of 157 registered construction firms, only 59 have renewed their licenses, limiting competition and local income generation.
Banke police recover rs 33.5 million in fines from fugitives
The District Police Office in Banke has arrested 270 fugitives and recovered Rs 33.5 million in fines over the past six months. The convicts were handed a combined prison sentence of 125 years. Police also collected Rs 19.5 million from customs evasion cases and Rs 12.7 million from traffic violations. During the same period, 212 individuals were arrested for drug-related offenses, with seizures including brown sugar and nitrazepam. Among those arrested was Niraj Shahi, wanted in connection with an attempted murder in Nepalgunj in October 2025.
Dharahara generates rs 110 million revenue in 15 months
Dharahara has earned Rs 110.7 million in revenue since reopening to the public 15 months ago. Unit Chief Mahesh Rai said that Rs 5.95 billion was collected in the first eight months of the current fiscal year alone. Since November 24, 2024, the landmark has attracted 605,391 visitors, with daily numbers reaching up to 2,000 on holidays. Although the tower is open from 8:00 am to 8:00 pm, construction remains about 85 percent complete, with work ongoing on the museum and courtyard. Entry fees are set at Rs 200 for Nepali visitors, Rs 500 for SAARC nationals, and Rs 1,000 for others.
Parbat launches digital smart agriculture project
Modi Rural Municipality in Parbat has introduced a Digital Smart Agriculture System to modernize farming practices. Under the Chief Minister Innovation Partnership Program, subsidies of up to 75 percent are being provided for crops such as orange, coffee, and cardamom, along with support for processing centers. Irrigation technologies, including drip systems, are eligible for up to 90 percent grants. Similarly, farmers growing ginger and turmeric will receive 90 percent subsidies on seeds and fertilizers. Local authorities have encouraged farmers to apply with necessary documentation to benefit from the initiative aimed at boosting productivity and reducing labor costs.
Nisikhola implements 113 infrastructure projects
Nisikhola Rural Municipality in Baglung has begun implementing 113 out of its planned 171 infrastructure projects. Chief Administrative Officer Jeevan Pun said development activities gained momentum after budget releases that had been delayed due to election-related restrictions. So far, 15 projects in Ward 7 have been completed. The municipality has also reduced arrears by Rs 70 million last year and an additional Rs 11 million this year through improved monitoring and transparency. Major investments include Rs 5 million each for administrative building expansion and tourism development around Riga Lake.
Work begins on 17-km Ghorahi–Lamhi road widening
The Division Road Office in Dang has started widening the 17-kilometre Ghorahi–Lamhi road section to improve safety. The project, costing Rs 200 million, focuses on high-risk stretches between Kuirepani and Arjun Khola. Contracts have been awarded to two joint ventures for different segments. The work includes hill cutting and construction of retaining walls to widen the road and improve visibility at sharp bends. Authorities expect the project to significantly reduce accidents caused by increasing traffic and narrow road conditions.
Tourism campaign launched to promote Pokhara
The Hotel Association Nepal (HAN) Pokhara, in collaboration with the Nepal Tourism Board, has launched the ‘Let’s Go to Pokhara’ campaign targeting eastern cities. A 19-member team will visit Birgunj, Hetauda, Biratnagar, and Ilam from March 23 to 27. The campaign aims to attract visitors to the 21st Phewa New Year Festival scheduled for April 12–14 and to revive direct flights between Pokhara and eastern hubs such as Bhadrapur. The initiative also seeks to support the Rs 6 billion investment in Pokhara’s hotel sector, which employs around 15,000 people.
Flora expo records Rs 12.2 million turnover
The 27th Flora Expo concluded at Bhrikutimandap with total transactions amounting to Rs 12.2 million. Organized by the Floriculture Association Nepal, the four-day event drew 60,007 visitors. On the final day alone, 12,200 people attended, generating Rs 3.1 million in sales. Nepal’s floriculture sector currently has investments exceeding Rs 8.83 billion across 52 districts. Imports of flowers have declined by over 54 percent to Rs 127 million, while exports have increased by more than 109 percent to Rs 21.3 million.
Suryabinayak–Dhulikhel road expansion reaches 67 percent progress
The expansion of the Suryabinayak–Dhulikhel road into a six-lane highway has achieved 67 percent physical progress. The 16-kilometre project, divided into two sections, includes service lanes and 2.5-metre sidewalks. The Sanga–Dhulikhel section has reached about 65 percent completion, while the Suryabinayak–Sanga segment stands at 55 percent. Construction work has accelerated after resolving local disputes over alignment. Although the initial deadline expired in December 2025, it has been extended by one year. Bridge construction over the Mahadev Khola is underway, with designs for two additional bridges now finalized.
Snow rivers launches IPO for locals and migrant workers
Snow Rivers Limited has opened its initial public offering (IPO) for project-affected locals and Nepali migrant workers. The company is issuing 937,500 shares at Rs 100 each to residents of Taplejung and Panchthar, along with 93,750 shares for workers abroad. Managed by Sanima Capital, the offer remains open until March 26 for foreign applicants and April 6 for locals. The company has received a Double B Plus rating from ICRA Nepal, indicating moderate risk.
Sopan pharmaceuticals opens ipo for foreign workers
Sopan Pharmaceuticals Limited has launched its IPO targeting Nepalis working abroad. The company plans to issue 4.29 million shares worth Rs 429 million, representing 25 percent of its capital. In this phase, 429,000 shares are allocated to migrant workers, with additional shares reserved for mutual funds and employees. Applications can be submitted through the Mero Share platform until March 26. NMB Capital is managing the issue.
Only 70 percent of arable land under cultivation in Karnali
Agriculture in Karnali Province remains underutilized, with only 69.71 percent of cultivable land currently in use. Of the province’s total 3 million hectares, just 287,761 hectares are arable, while 87,159 hectares remain uncultivated. According to agriculture officer Mukunda Sharma, only 38,233 hectares have year-round irrigation. Significant disparities exist across districts, with Dolpa cultivating just 5,970 hectares out of 788,900 hectares, while Surkhet uses 35,010 hectares. Authorities stress the need to expand irrigation to the 30,407 hectares currently receiving only seasonal water to boost food production.
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