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 indicators present a mixed picture of improving domestic activity alongside persistent structural weaknesses. Investor sentiment recovered modestly as the NEPSE advanced despite lower trading volumes, while gold prices continued their upward trajectory, reflecting ongoing demand for safe-haven assets. Strong growth in foreign trade, electricity exports and public debt mobilisation points to expanding economic activity and continued infrastructure investment.
However, the record Rs 1.78 trillion trade deficit, heavy reliance on imports—including nearly Rs 40 billion worth of rice—and missed revenue targets at several customs offices underscore Nepal’s enduring external vulnerabilities and limited productive capacity. At the policy level, the government is prioritising long-term reforms through support for organic agriculture, hydropower development, environmental governance and international aviation connectivity, while provincial and local governments continue investing in roads, bridges and revenue mobilisation.
Nonetheless, underutilised capital budgets, uneven project implementation and dependence on imports remain significant constraints. Overall, the day’s developments suggest an economy making gradual progress in infrastructure, energy and institutional reforms, but one that still faces deep structural challenges in boosting exports, improving public spending efficiency and achieving more balanced, sustainable growth.
NEPSE rises 14.17 points as turnover falls to Rs 4.67 billion
The Nepal Stock Exchange (NEPSE) gained 14.17 points on Thursday to close at 2,726.72, although daily trading turnover declined to Rs 4.67 billion from Rs 5.18 billion recorded the previous session. Share prices of 149 listed companies increased, while 115 declined and 12 remained unchanged. Most sectoral indices finished in positive territory, with the trading sector posting the strongest gains. Only the investment and others sectors closed lower. Reliance Spinning Mills, Ankhukhola Jalvidhyut, Ridi Power, Solu Hydropower and NRN Infrastructure recorded the highest trading turnover. Everest Color emerged as the day’s biggest gainer with a 15 percent increase, while Kutheli Bukhari Small Hydropower posted the steepest decline, falling 15 percent.
Gold rises to Rs 291,300, silver reaches Rs 4,505
Gold and silver prices edged higher in Nepal’s domestic market today. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold increased by Rs 300 per tola (11.66 grams) to Rs 291,300, up from Rs 291,000 on Wednesday. Silver also gained Rs 25 per tola, with the price rising to Rs 4,505 from the previous day’s Rs 4,480 per tola.
Trade deficit widens to Rs 1.78 trillion
Nepal recorded a trade deficit of Rs 1.78 trillion with 134 countries during the fiscal year 2025/26, according to the Department of Customs. Total foreign trade exceeded Rs 2.4 trillion, with imports reaching Rs 2.096 trillion against exports of only Rs 315 billion. Nepal recorded a trade surplus with just 28 countries. India remained the country’s largest source of trade imbalance with a deficit of Rs 951 billion, followed by China at Rs 423 billion and Argentina at Rs 116 billion, largely due to edible oil imports. Trade surpluses were limited to a handful of countries, including Denmark, Norway and Fiji, mainly because Nepal imported little or nothing from those markets.
Prime Minister Shah pledges support for organic farming sector
Prime Minister Balendra (Balen) Shah has pledged to address key policy and structural barriers affecting Nepal’s organic agriculture sector. During a meeting at Singha Durbar with representatives of Organic Association Nepal, discussions focused on the absence of an internationally recognised national certification body, the imbalance created by subsidies for chemical fertilisers, and the high cost of organic certification. The Prime Minister directed his secretariat and the Ministry of Agriculture to prepare legislation establishing a national organic certification authority and formulate subsidy guidelines for organic fertilisers to strengthen domestic production and expand export opportunities.
Suraj Vaidya appointed Dean of Honorary Consular Corps Nepal
Suraj Vaidya, Honorary Consul General of the Philippines to Nepal, has been elected Dean of the Honorary Consular Corps Nepal (HCCN). Baidya, a former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), was unanimously elected at the HCCN General Assembly held in Kathmandu on Thursday. He succeeds Bhola Bikram Thapa, Honorary Consul General of Bulgaria to Nepal, who served as the outgoing Dean. The General Assembly also elected Pasang Dawa Sherpa as Vice Dean of the HCCN. Following his election, Vaidya said attracting foreign direct investment (FDI), promoting tourism and strengthening Nepal’s economic diplomacy would be the key priorities of his tenure. He said he would work to deepen Nepal’s engagement with the international community and expand economic cooperation through stronger diplomatic and business partnerships.
Govt mobilises Rs 133.85 billion in net public debt
The Public Debt Management Office reported that the government raised net public debt of Rs 133.85 billion during fiscal year 2025/26. Total borrowing amounted to Rs 447.16 billion, equivalent to 75.07 percent of the annual target, while debt repayments reached Rs 313.31 billion. Outstanding public debt increased to Rs 2.974 trillion, pushing the debt-to-GDP ratio to 45.07 percent. Domestic borrowing accounted for Rs 358.66 billion, while external loans totalled Rs 88.5 billion.
Foreign trade reaches record Rs 2.411 trillion in FY 2025/26
Nepal’s total foreign trade increased by 15.88 percent to a record Rs 2.411 trillion during the fiscal year 2025/26, according to annual data released by the Department of Customs. Imports rose 16.20 percent to Rs 2.096 trillion, while exports climbed 13.81 percent to Rs 315.29 billion. As a result, the country’s trade deficit expanded by 16.63 percent to Rs 1.781 trillion, with Nepal importing goods worth Rs 6.65 for every Rs 1 earned through exports.
Nepal imports rice and paddy worth nearly Rs 40 billion
Nepal imported 741,703 metric tonnes of rice and paddy worth Rs 39.895 billion during the fiscal year 2025/26, highlighting the country’s continued dependence on foreign grain despite a slight decline in imports from the previous year. Raw paddy imports fell to 477,909 metric tonnes valued at Rs 19.145 billion, while imports of processed rice increased to 263,794 metric tonnes worth Rs 20.74 billion. India supplied more than 99 percent of the total imports, with only small quantities imported from China, Vietnam, Thailand, Qatar and Italy.
Nepalgunj Customs misses annual revenue target
The Nepalgunj Customs Office collected Rs 20.115 billion in revenue during fiscal year 2025/26, achieving 81.95 percent of its revised target of Rs 24.545 billion and falling short by about Rs 4.43 billion. Although the annual target had already been reduced by more than Rs 2 billion, lower petroleum imports, restrictions on Indian sugar exports and sluggish regional trade affected collections. Diesel remained the largest source of customs revenue, while resin, medicinal herbs and catechu were among the district’s leading export commodities.
Electricity exports jump to Rs 29.32 billion
Nepal recorded a net electricity trade surplus of Rs 18.76 billion during fiscal year 2025/26 as export earnings surged 67.96 percent to Rs 29.32 billion. Electricity exports to India and Bangladesh increased by 62.89 percent to more than 3.87 billion units, with an average selling price of Rs 7.56 per unit. At the same time, electricity import costs declined by 31.57 percent to Rs 10.55 billion, supported by higher domestic hydropower generation and expanded transmission infrastructure.
Janakpur Inland Revenue Office collects Rs 6.07 billion
The Inland Revenue Office in Janakpur collected Rs 6.067 billion during fiscal year 2025/26, achieving 88.49 percent of its annual target despite challenging economic conditions. Revenue included Rs 2.55 billion in excise duty, Rs 2.068 billion in income tax and Rs 1.284 billion in value-added tax, along with smaller contributions from interest, rental and health risk taxes. The office also recovered more than Rs 100 million in outstanding arrears through intensive taxpayer outreach, reminder campaigns and enforcement efforts targeting its 173,968 registered taxpayers.
Dang returns over Rs 2 billion in unspent capital budget
Dang district returned Rs 2.082 billion in unspent development funds during the fiscal year 2025/26 after utilising only 74.46 percent of its allocated capital budget. Of the Rs 8.155 billion provided by the federal and provincial governments for infrastructure projects, only Rs 6.072 billion was spent. According to the District Treasury Controller Office, the district has consistently failed to utilise between Rs 2 billion and Rs 3 billion in capital expenditure annually over the past six fiscal years, reflecting persistent weaknesses in budget execution.
NEA begins RCOD extension process for hydropower projects
The Nepal Electricity Authority (NEA) has started processing extensions to the Required Commercial Operation Date (RCOD) for 218 hydropower projects following a new policy approved by its board on July 16. The authority is reviewing extension requests for 150 projects in Group A and 68 projects in Group B based on construction progress and contractual commitments, while projects that have failed to meet obligations face default notices or possible cancellation. Energy Minister Biraj Bhakta Shrestha said the government is committed to facilitating the timely completion of private sector hydropower projects.
Koilabas Customs exceeds revenue target
The Koilabas Customs Office collected Rs 20.4 million in revenue during fiscal year 2025/26, surpassing its annual target of Rs 17.4 million by 17.41 percent. While monthly collections remained below target for much of the year, a sharp rise in Indian tourist arrivals during December and January helped revenue reach nearly 247 percent of the monthly target. Increased vehicle movement also boosted collections during May, June and July. The office additionally collected Rs 2.6 million through case deposits and other administrative charges.
Nagdhunga Tunnel to be inaugurated on Monday
The Nagdhunga Tunnel is scheduled to be officially inaugurated on Monday, according to the Department of Roads. Deputy Director General and spokesperson Subhraj Nyaupane said the ceremony will be attended by ministers, ministry officials, the President of the Japan International Cooperation Agency (JICA) and the Japanese Ambassador to Nepal. However, the Prime Minister is not expected to attend. Officials clarified that the tunnel will not immediately open for full commercial operation, as additional preparations are required before regular traffic can begin using the facility.
Ministry approves 26 environmental impact assessment reports in FY 2025/26
The Ministry of Agriculture, Forestry and Environment approved 26 Environmental Impact Assessment (EIA) reports during the fiscal year 2025/26, with major hydropower schemes accounting for most approvals. These included the 341 MW Budhigandaki Hydropower Project, the 270 MW Bheri-1 Semi-Reservoir Project and the 90 MW Marsyangdi Semi-Reservoir Project. The ministry also endorsed 32 scoping documents, approved six supplementary EIAs, revised environmental management plans for several projects and 400 kV transmission lines under the Millennium Challenge Account Nepal (MCA-Nepal), and imposed penalties on six projects for violating environmental compliance requirements.
Gandaki allocates Rs 25 million to restore secretaries’ salaries
The Gandaki Provincial Government has allocated more than Rs 25 million in the current fiscal year’s budget to reinstate salaries and allowances for the personal secretaries of provincial assembly members, following the federal government’s decision to restore the facility. Once the provincial cabinet issues a formal circular, 59 of the province’s 60 lawmakers will become eligible. Under existing provisions, the Speaker, Deputy Speaker and committee chairpersons are entitled to officer-level personal secretaries, while other members receive non-gazetted first-class secretaries. Provincial officials said the facility will resume following its publication in the federal gazette, although withheld payments from the previous fiscal year will not be reimbursed.
Bagmati completes 44 road bridges during last fiscal year
Bagmati Province completed the construction of 44 road bridges and utilised 63.40 percent of its allocated budget during the fiscal year 2025/26, according to the Ministry of Physical Infrastructure Development. The province also upgraded 136.66 kilometres of gravel roads, blacktopped or paved 231.31 kilometres of roads, built six suspension bridges, 17 government buildings, 102 community buildings, 940 residential houses and 17 public parks. Of 41 previously stalled projects, seven were completed, 23 resumed construction, four faced financial penalties and efforts are underway to restart the remaining 11 projects.
Jitpur Simara expands internal revenue collection
Jitpur Simara Sub-Metropolitan City in Bara has significantly strengthened its internal revenue base, collecting Rs 275.6 million during the fiscal year 2025/26, compared with Rs 118.6 million in 2021/22. The municipality has set a target of collecting Rs 490 million this fiscal year and has introduced several tax incentives, including a 25 percent property tax discount for industries employing at least 60 percent local workers, a 25 percent reduction in land revenue tax and a 10 percent discount for taxpayers who clear their dues by October 17. Having exceeded the Rs 250 million minimum local revenue threshold required under the Local Government Operation Act, 2017, the municipality now plans to broaden its tax base instead of increasing tax rates.
Fee waivers expected to boost international flights from Pokhara
The government has approved a full waiver of landing, parking and navigation fees, along with a 50 percent discount on ground handling charges, for international airlines operating from Pokhara International Airport until mid-September 2028. The incentives are expected to encourage regular international services, with Flydubai set to begin direct flights between Pokhara and Dubai on September 23. Pokhara Metropolitan City Mayor Dhanraj Acharya and airport General Manager Jagannath Niraula said the move would improve connectivity to Europe, the Middle East and North America while stimulating tourism and local economic activity. The airport, built at a cost of nearly Rs 22 billion, has so far been limited mainly to domestic operations.
KSCL begins fertiliser distribution in Dhanusha
Krishi Samagri Company Limited (KSCL) has started distributing urea and DAP fertilisers in Dhanusha under a buffer stock arrangement supported by the Madhesh Provincial Government to address shortages during the paddy planting season. Distribution is being carried out based on recommendations from local governments. Officials said supplies of DAP are improving, with additional shipments expected soon. During the fiscal year 2025/26, the Janakpurdham office distributed 18,745.1 metric tonnes of agricultural inputs, including 11,241.35 metric tonnes of urea and 6,963.3 metric tonnes of DAP.
Department fines Raj Shree Food Store during market inspection
The Department of Commerce, Supplies and Consumer Protection fined Raj Shree Food Store in Nagarjun-2, Kharibot, Banasthali, Rs 5,000 for failing to maintain purchase invoices in violation of the Consumer Protection Act, 2018. During Thursday’s market monitoring campaign, officials inspected eight businesses and issued corrective directives to seven other firms to improve compliance with consumer protection regulations.
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