KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape shows mixed signals with sustained investor activity despite modest stock market fluctuations, as the NEPSE index dipped slightly while turnover surged to Rs 16.35 billion, reflecting heightened liquidity amid the election season. Commodity markets indicate rising inflationary pressures, with gold and silver hitting record highs and edible oil prices surging, though higher milk prices in India are benefiting local dairy farmers by stabilizing domestic demand.
The financial and industrial sectors show long-term growth, highlighted by a 145-fold increase in hydropower loans over sixteen years, substantial investment proposals, and the Arun-III project nearing 75 percent completion. Policy and regulatory developments—including online one-door systems for trade certificates, labor agreements with Saudi Arabia, and stricter consumer protection enforcement, demonstrate a focus on transparency and international compliance.
Simultaneously, export-oriented sectors such as Chhurpi and broom grass continue to generate significant foreign revenue, while IPOs like Bhujung Hydropower offer investment opportunities despite high risk. Agricultural output shows localized challenges, exemplified by a dip in Chitwan orange production, underscoring the need for technological interventions to sustain growth.
Overall, Nepal’s economy exhibits active market participation, rising commodity prices, targeted policy reforms, and sector-specific growth alongside structural vulnerabilities.
NEPSE index slips slightly amid high trading volume
The Nepal Stock Exchange (NEPSE) index fell by 3.07 points on Monday, closing at 2,769.09. Despite the small drop, investor interest remained strong, with turnover rising to Rs 16.35 billion, up Rs 2.50 billion from Sunday. A total of 36.26 million shares changed hands through 147,676 transactions involving 332 companies. While sectors like hotels and hydropower recorded gains, 165 companies closed in the red. Market activity has increased as the nationwide election season approaches, signaling ongoing liquidity and engagement in the secondary market.
Gold and silver prices set another record on Monday
Gold and silver prices reached new highs in Nepal on Monday. Gold rose by Rs 5,200 per tola to Rs 309,000, surpassing Sunday’s record of Rs 303,800. Silver increased by Rs 280 per tola, reaching Rs 6,765 from Rs 6,480. Internationally, gold traded at USD 5,065 per ounce and silver at USD 107.89 per ounce.
Edible oil prices surge by Rs 50 per liter within a week
Cooking oil prices have risen by Rs 40–50 per liter over the past week. Soybean and sunflower oils now cost between Rs 290 and Rs 300 per liter, while mustard oil has reached Rs 400. Consumers reported paying Rs 295 for oil that was Rs 245 just a week ago. Industry experts attribute the increase to rising global raw material costs and higher demand in India ahead of Holi. Consumer activists, however, claim that traders are creating artificial shortages and exporting 95 percent of stock to India to maximize profits.
High milk prices in India benefit Nepali dairy farmers
Rising milk prices in India have created a stable market for Nepali dairy farmers. Earlier, cheaper Indian milk was smuggled into Nepal, leading to surpluses and periodic “milk holidays.” The Central Dairy Cooperative Association reports that, including transport costs, Indian milk is now Rs 0.46 more expensive than Nepali milk. As a result, smuggling has reversed toward India. Nepal produces roughly 4.5 million liters of milk daily, slightly less than last year. Chitwan Milk, for instance, processes only 70,000 liters per day compared to 200,000 liters last year, indicating stronger domestic consumption.
Hydropower loans increase 145 times over sixteen years
A study by IPPAN shows that banking sector investment in hydropower reached Rs 402.41 billion by mid-July 2025, 145 times higher than the Rs 2.76 billion recorded in 2009/10. Hydropower now represents 8.10 percent of total banking credit, compared to 0.69 percent sixteen years ago. The growth is attributed to a 2020 NRB policy requiring banks to allocate 10 percent of loans to the energy sector. Currently, 347 private projects have a combined investment of Rs 1.31 trillion.
Nepal, India governors discuss cross-border QR payments
On January 19, NRB Governor Bishwo Nath Paudel met RBI Governor Sanjay Malhotra in Mumbai to discuss enabling seamless QR code payments for Nepali citizens traveling in India. They also covered monetary policy, liquidity management, and AI-driven bank supervision. Governor Paudel later visited Ahmedabad to learn about the Gujarat International Finance Tec-City model and potential collaboration opportunities. Senior officials from Nepal’s foreign exchange and payment systems departments accompanied him to explore technical cooperation and knowledge sharing with the RBI.
Investment proposals worth Rs 1.30 billion in second quarter
The Department of Industry reported that 781 industries submitted investment proposals totaling Rs 1.30 billion during the second quarter of the fiscal year. Between mid-July 2025 and mid-January, 712 small, 35 medium, and 34 large industries were registered. These projects are expected to create 32,627 jobs. Additionally, 161 foreign investment proposals and 314 automatic route projects were approved, totaling Rs 39.23 billion in foreign commitments. In the same period, the department handled 113 trademark cases and recommended 37 Certificates of Origin for concessional exports to India.
Arun-III hydropower project hits 74 percent completion milestone
Construction of the 900 MW Arun-III hydropower project has reached 74.61 percent physically and 74.6 percent financially. Developed by SJVN Arun-III Power Development Company (SAPDC) at a cost of Rs 144 billion, the project’s transmission line to Sitamarhi, India, is 58.3 percent complete. Due to delays, the developer requested an 18-month extension for the commercial operation date (COD) until September 2026. A Project Review Panel, including Dr. Pawan Kumar Shrestha, Dr. Pawan Kumar Bhattarai, and Dr. Ganesh Prasad Nyaupane, will evaluate the extension request.
Health Insurance Board orders review committee for payment claims
The Health Insurance Board has instructed health institutions to form internal committees to verify payment claims before submission. Information Officer Bikesh Malla noted that many claims contain errors, resulting in high rejection rates. Under the Real-Time Claims Procedure 2023, these committees must ensure all documents meet board standards. Currently, institutions submit claims worth Rs 100 million daily, while the board owes about Rs 12 billion in outstanding payments. Internal reviews are expected to streamline processing and ensure timely reimbursement of valid claims.
Mandatory online one-door system for certificates for businesses
Finance Minister Rameshwar Khanal announced that all agencies issuing Certificates of Origin must now operate exclusively through an online one-door system. Each certificate will include a QR code for authentication. Previously issued both physically and digitally, this mandatory digital system aims to reduce office visits, prevent forgery, and improve the credibility of Nepal’s international trade. The customs administration has also implemented a transaction-based valuation system to ensure transparent import and export pricing.
Chhurpi exports earn Nepal Rs 1.875 billion in six months
Nepali businesses earned Rs 1.875 billion from Chhurpi exports during the first half of the fiscal year. Customs data shows 1.3 million kg were exported to 30 countries, with the USA as the largest market, importing 911,163 kg worth Rs 1.613 billion for pet treats. Canada imported Rs 122.7 million, the UK Rs 32.3 million, and other markets include Japan, Korea, Germany, and France.
FCAN postpones general convention due to election code of conduct
The Federation of Contractors’ Associations of Nepal (FCAN) has postponed its 26th general convention and 13th conference, originally set for January 29–31. The delay follows an Election Commission directive enforcing the election code of conduct ahead of the March 5 polls. All related activities, including leadership elections for provincial, district, and commodity-based groups, are suspended until further notice. FCAN officials confirmed that the selection of new leadership and assembly of construction stakeholders will remain on hold.
Export of broom grass worth Rs 412.1 million in six months
Nepal exported Thysanolaena (broom grass) valued at Rs 412.1 million in the first six months of the fiscal year. Customs data shows 6.3 million kg were exported to India and Bangladesh. India imported 6.1 million kg worth Rs 407.8 million, while Bangladesh imported 144,000 kg valued at Rs 4.2 million. This reflects growing international demand for Nepali agricultural products, boosting income for farmers in the eastern and mid-hill regions where Thysanolaena is cultivated.
Kathmandu firm fined Rs 50,000 for violating consumer rights
The Department of Commerce, Supplies, and Consumer Protection fined Carters Enterprises Rs 50,000 during a market inspection in Kathmandu Metropolitan City-4 on Sunday. The firm violated Sections 20(2) and 38(T) of the Consumer Protection Act 2018. Sixteen other businesses inspected received warnings and guidance for compliance. The department is increasing monitoring to ensure consumer protection and fair trade practices, particularly during the election period.
Nepal signs labor agreement with Saudi Arabia to protect workers
Nepal and Saudi Arabia signed a bilateral labor agreement in Riyadh. Labor Minister Rajendra Singh Bhandari and Saudi Minister Ahmad bin Sulaiman Al-Rajhi finalized the deal to ensure transparent recruitment and stronger protection for Nepali workers. The pact guarantees a minimum monthly salary of 1,000 riyals plus 300 riyals for meals for unskilled workers. It aligns with ILO standards and seeks to eliminate dual contracts and excessive recruitment fees. A joint technical committee will oversee implementation for nearly 500,000 Nepali workers.
Bhujung Hydropower Limited opens ipo for general public
Bhujung Hydropower Limited has launched its IPO for the general public. After reserving shares for locals, migrant workers, employees, and mutual funds, the company is offering 830,000 shares worth Rs 83 million. Investors can apply for 10 to 50,000 shares until January 29. ICRA Nepal assigned a “B+” rating, indicating high risk, with Kumari Capital managing the sale.
Orange sales reach Rs 91 million in Chitwan
Chitwan farmers sold oranges worth Rs 91 million this season. The Agriculture Development Office reported 1,002.8 metric tons produced in Ichchhakamana Rural Municipality and Bharatpur Metropolitan City-29, down from last year’s 1,120 metric tons. The decline is attributed to aging trees, citrus greening disease, and insufficient management. Despite lower production, oranges remain a vital income source, supplying markets in Kathmandu, Pokhara, and Narayanghat. Experts recommend adopting scientific farming techniques to boost yields.
Comment