KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The latest economic and infrastructure developments in Nepal indicate a mixed yet dynamic outlook, with strong market performance, rising commodity prices, and active investment flows contrasting with slower provincial spending and persistent infrastructure delays.
The NEPSE index surged by 57.55 points, reflecting investor optimism, while gold and silver hit record highs due to global volatility and local demand. Policy measures, such as removing caps on automatic foreign investment approvals and tightening cash transaction limits, aim to attract capital and curb illicit financial activity.
Strategic projects, including petroleum pipelines with India, the 328 MW Barbung hydropower, and ongoing road and underpass construction, highlight continued efforts to strengthen energy security and connectivity, though long-standing projects like the Kanti Highway underscore persistent implementation challenges.
Meanwhile, sectoral dynamics, from mobile phone imports and orange production to rising egg prices, reflect growing domestic demand and market pressures, while localized disruptions, such as the Gen Z protests in Jumla, continue to slow capital spending at the provincial level. Collectively, these trends reveal a Nepalese economy balancing robust investment and market activity with structural and administrative bottlenecks.
NEPSE jumps 57.55 points as turnover reaches Rs 13.78 billion
The share market began the week on a strong note, with the Nepal Stock Exchange (NEPSE) index rising by 57.55 points, or 2.12 percent, to close at 2,772.17 on Sunday. The Sensitive Index also gained 1.73 percent to stand at 473.48. Trading activity remained robust, with over 30.9 million shares of 331 companies exchanged through 133,529 transactions, generating a total turnover of Rs 13.785 billion. All 13 sectoral indices advanced, led by the hotel and tourism sector, which climbed 3.35 percent. Eight companies touched the 10 percent upper circuit, including Ankhu Khola Hydropower, which also recorded the highest turnover of Rs 435.9 million.
Gold and silver prices hit record highs in Nepal
Gold and silver prices reached all-time highs in the domestic market on Sunday. Fine gold jumped by Rs 2,400 to Rs 303,800 per tola, marking the first time prices crossed the Rs 300,000 threshold. Silver also rose sharply, gaining Rs 290 to trade at Rs 6,480 per tola. The surge has been driven by global market volatility and heightened local demand during the wedding season.
Nepal and India fast-track Rs 15 billion petroleum pipeline projects
Nepal Oil Corporation (NOC) is accelerating petroleum and LPG pipeline projects in collaboration with India. NOC Executive Director Chandika Prasad Bhatta said the 62-km Amlekhgunj–Chitwan pipeline and the 50-km Siliguri–Jhapa pipeline, with a combined cost of Rs 15 billion, will be financed through grants from Indian Oil Corporation. NOC will also invest Rs 8 billion to construct a fuel storage facility in Chitwan. In addition, a proposed Rs 12 billion LPG pipeline from Motihari to Sarlahi is expected to cut annual transportation costs by around Rs 6 billion, improving fuel security, particularly in Koshi Province.
Govt removes cap on automatic foreign investment approvals
The Cabinet has endorsed the first amendment to the Foreign Investment and Technology Transfer Regulations, 2020, eliminating the Rs 500 million ceiling on investments approved through the automatic route. Previously, projects exceeding this threshold required manual clearance from the Department of Industry. With the revision, investors in sectors such as energy, agriculture, tourism, and information technology can now obtain approvals online regardless of investment size. During the first half of FY 2025/26, Nepal received foreign investment commitments worth Rs 39.23 billion across 475 projects, of which Rs 7.47 billion was actually realized.
Mobile phone imports cross Rs 23 billion in six months
Nepal imported more than 1.25 million mobile phones worth Rs 23.29 billion from 50 countries in the first half of the current fiscal year, according to the Department of Customs. The imports generated government revenue of Rs 4.34 billion. China dominated the supply, exporting over 1.06 million units valued at Rs 18.52 billion, followed by India with 186,703 units worth Rs 4.45 billion. Smaller volumes were imported from countries including the United States, UAE, Australia, and Japan. Rising demand has been driven by increased foreign employment and wider internet access.
Federal spending improves, but provincial capital expenditure lags
By mid-January of FY 2025/26, federal government spending reached 33.90 percent, a sharp improvement from 14.32 percent during the same period last year. However, provincial capital expenditure remains sluggish at just 14.10 percent. In Dang, the federal government spent Rs 1.81 billion out of its Rs 5.35 billion allocation, while provincial offices utilized only Rs 367.9 million of a Rs 2.60 billion development budget. Officials cited protests, staff transfers, and delayed tendering as major obstacles.
Finance Minister tightens cash transaction limits to curb black money
Finance Minister Rameshore Khanal has announced a reduction in allowable cash transaction limits as part of efforts to combat illicit financial activities. Speaking at the 61st anniversary of Rastriya Banijya Bank, he said certain sectors are still being misused to launder black money. Khanal stressed the need to move from physical to digital transactions and expand virtual banking services. He also revealed that discussions are underway with Nepal Rastra Bank to shift lending practices from collateral-based models to enterprise- and capacity-based financing.
Studies begin on 328 MW Barbung hydropower project in Dolpa
The Department of Electricity Development has launched environmental and technical studies for the 328 MW Barbung Hydropower Project in Dolpa. The reservoir-based project, spread across Chharka Tangsong and Kaike rural municipalities, is estimated to cost Rs 103.31 billion. It includes a 169-meter-high dam and a 16-kilometer headrace tunnel, with projected annual generation of 933.19 GWh. Separately, the 32 MW Karuwa Seti project in Kaski is undergoing a revised environmental assessment due to design changes within the Annapurna Conservation Area.
Koshi Province signs contribution-based pension agreement with EPF
The Koshi Province government has signed an agreement with the Employees Provident Fund (EPF) to manage contribution-based pensions for provincial and local government employees. The pact was signed by Secretary Koshhari Niraula and EPF Administrator Jitendra Dhital. Applicable to employees appointed after July 17, 2019, the scheme mandates a 6 percent salary contribution from employees, matched by the employer. The initiative aims to reduce long-term pension liabilities while mobilizing funds for infrastructure development projects.
Kanti Highway remains incomplete even after seven decades
The 79-kilometer Kanti National Highway, intended to connect Kathmandu and Hetauda, remains unfinished nearly 70 years after construction began in FY 1955/56. About 75 percent of the project has been completed, but blacktopping of the remaining 4 kilometers is still pending. Project officials cite budget constraints and difficult terrain as reasons for the delay, with completion now targeted for early FY 2026/27. Once finished, the highway will significantly reduce travel distance and fuel consumption compared to the longer Narayanghat route.
Sanga underpass reaches 45 percent physical progress
Construction of the 1,110-meter Sanga underpass, located on the Bhaktapur–Kavre border, has achieved 45 percent physical progress. The project is part of the Suryabinayak–Dhulikhel road expansion and includes approach roads in both Bhaktapur and Banepa. Although initially scheduled for completion in January 2024, the deadline has been extended to mid-March 2027. The Sanga section alone carries a price tag of Rs 3.88 billion.
Korala border customs collects Rs 5.54 billion in revenue
The Mustang Customs Office at Nechung has collected Rs 5.54 billion in revenue as of January 23, despite harsh weather conditions at the 4,650-meter Korala border pass. Since the border reopened for commercial trade in September 2025, at least 2,329 electric vehicles have been imported from Tibet. Total trade volume reached Rs 11 billion in imports and Rs 200 million in exports, including handicrafts and garments.
Egg prices climb amid election demand and rising costs
Egg prices increased nationwide from Sunday as demand surged ahead of the March 5 elections. A crate of large eggs now costs Rs 495, while medium eggs are priced at Rs 475. Despite the hike, prices remain below the production cost of Rs 574 per crate. Poultry farmers hope further increases will help offset losses, noting that prices had peaked at Rs 565 per crate last November.
Gen Z protests slow Jumla’s capital spending to 9.4 percent
Jumla district has spent only 9.4 percent of its Rs 1.118 billion capital budget in the first five months of FY 2025/26. Recurrent expenditure stood higher at 15.19 percent, according to official records. Authorities attribute the slow pace to disruptions caused by Gen Z protests in September 2025, which damaged government offices and halted administrative work. Among provincial offices, the Infrastructure Development Office showed the highest progress at 19.33 percent.
Koilabas customs falls short of six-month revenue target
Koilabas Customs Office collected Rs 7.6 million in the first half of the fiscal year, missing its Rs 8.4 million target by Rs 873,000. While revenue surged in late December and early January due to Indian tourists, overall performance stood at 89.72 percent. Officials said strict border controls by India discouraged travel, limiting collections largely to temporary vehicle entry fees.
Orange production in Gorkha rises by 15 percent
Orange production in Gorkha district increased by 15 to 20 percent this year, reaching 3,187 metric tons. According to the National Agriculture Modernization Project, farmers earned around Rs 220 million from oranges and Rs 15 million from lemons. The growth is attributed to favorable weather and newly matured orchards. Orange farming now spans 1,097 hectares and involves more than 300 farmers, supported through designated Orange Zones.
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