KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The recent updates from Nepal highlight significant developments across various sectors.
The Nepal Oil Corporation (NOC) has reduced fuel prices, with petrol dropping by Rs 5 per liter, offering some relief amidst economic challenges.
Meanwhile, the IMF has disbursed $41.8 million to Nepal, recognizing its reform progress but stressing the need for improved fiscal discipline and financial reforms, given the country’s economic vulnerabilities.
On the infrastructure front, despite claims of no load shedding since 2018, industrial power cuts persist, exacerbated by Nepal’s dependency on India for electricity.
The government’s sluggish capital spending is raising concerns about the implementation of development projects. In labor trends, Nepal is set to send a record 800,000 workers abroad this year due to limited local employment opportunities.
The real estate market saw stable transactions with increased revenue collection, while the establishment of Nepal’s first Consumer Court marks a milestone in strengthening consumer rights.
Additionally, the Birgunj Customs Office continues to show steady revenue growth, though it is still short of targets.
Nepal-India collaboration in the flour milling sector is aimed at improving food security and technology exchange.
In the tech sector, the NTA advocates for mergers among Internet Service Providers to streamline the market. Meanwhile, electric microbus fares have been reduced to promote eco-friendly travel, and the local duna-tapari industry in Khotang is expanding as part of a sustainable initiative to reduce plastic use. Additionally, protests against a cable car project have led to a decline in donations and visitors at the Pathibhara Temple. These developments reflect a mix of positive strides and challenges in Nepal’s economic, infrastructure, and social sectors.
Petrol price reduced by Rs 5
The Nepal Oil Corporation (NOC) has announced a reduction in the price of petroleum products, effective from Saturday midnight. Under the revised rates, petrol will be cheaper by Rs 5 per liter, while diesel will see a decrease of Rs 4 per liter.
As a result, petrol will now be available at Rs 163 per liter, while diesel and kerosene will be priced at Rs 151 per liter in the Kathmandu Valley.
IMF approves $41.8 million for Nepal
The International Monetary Fund (IMF) has authorized a disbursement of $41.8 million to Nepal under the Extended Credit Facility (ECF), bringing the total amount released to $289.1 million.
The IMF acknowledged the progress Nepal has made in reforms but cautioned about weak domestic demand, financial risks, and political instability.
The IMF projects an economic growth rate of 4.2% for FY2024/25, with capital spending and hydropower development driving the expansion.
Inflation, which spiked due to flood disruptions, is expected to stabilize at 5%. The IMF called for greater fiscal discipline, reforms in the financial sector, and stronger anti-money laundering measures, particularly after Nepal’s inclusion on the FATF grey list.
Real estate transactions stable, revenue rises in Falgun
Real estate transactions in Falgun remained stable, with 46,061 transactions recorded, nearly identical to Magh’s 46,069.
However, revenue collection saw a 6.39% increase, rising from Rs 3.87 billion in Magh to Rs 4.12 billion in Falgun. This year’s Falgun transactions represent a 9.68% decline compared to last year’s 50,998.
The government generates revenue from real estate transactions through service taxes, registration fees, and capital gains tax.
Industrial load shedding continues despite claims of no load shedding
Although Nepal has claimed to have ended load shedding for households since 2018, industries still face 8–12 hours of power cuts daily.
While NEA chief Kulman Ghising is credited with ending household load shedding, industrial demand remains unmet. With India limiting electricity exports to 12 hours daily from March to May, the shortages are intensifying.
Despite 99% electrification for households, industries—which account for 40% of total demand—are struggling. Ghising’s tenure is coming to an end, but Nepal’s ongoing power crisis highlights the lack of effective long-term energy planning.
Slow capital spending despite budget allocation
Government capital expenditure has been sluggish, with only 23.37% of the allocated Rs 352.35 billion spent by Falgun, as per the Office of the Auditor General.
Overall government spending has reached 45.12% of the annual budget, totaling Rs 839.35 billion. Recurrent expenditure stands at 51.21%, while financial management spending is at 47.07%.
Revenue collection has been slow, with only 50.2% of the targeted Rs 1.47 trillion collected so far. Tax revenue amounts to Rs 638.79 billion, or 49.74% of the goal. The slow pace of capital spending raises concerns about the implementation of development projects.
Nepal faces risk of power shortages due to uncertain electricity supply from India
Nepal is at risk of a power crisis as its electricity import agreement with India expires on March 16. The current agreement provides power for 20 hours a day, but starting Sunday, the supply will be reduced to 12 hours (6 AM to 6 PM).
The Nepal Electricity Authority (NEA) has urged the government to negotiate for continued supply through diplomatic channels.
Delays in finalizing a new agreement, coupled with political interference, have exacerbated the situation, raising concerns about potential power cuts, particularly during the evening.
Nepal set to send 800,000 workers abroad this year
Nepal is on track to send a record 800,000 workers abroad for employment this fiscal year. According to the Department of Foreign Employment, 529,000 people secured labor permits in the first eight months.
On average, 66,125 individuals leave for foreign jobs each month. If this trend continues, the total number of migrant workers could exceed 800,000 by the end of the year.
Last year, 741,000 Nepalis went abroad for work. The highest number of permits were issued in December, with 81,010 granted. The increase is attributed to limited job opportunities within Nepal, driving more people to seek work overseas.
Nepal opens its first Consumer Court to strengthen consumer rights
Nepal’s first Consumer Court was inaugurated on March 15, 2025, by Chief Justice Prakashman Singh Raut in observance of World Consumer Rights Day.
The court, established under the Consumer Protection Act of 2018, is designed to address unfair trade practices and substandard products or services.
Located in Tripureshwor, Kathmandu, it will initially handle cases from the Valley.
Judge Ram Prasad Sharma will preside over the court, with two under-secretaries serving as members. Chief Justice Raut stressed the importance of judicial activism to ensure its credibility.
Birgunj customs collects rs. 109.22 billion in eight months
Birgunj Customs Office has collected Rs. 109.22 billion in revenue during the first eight months of the current fiscal year, falling short of the target of Rs. 139.73 billion.
Customs Chief Deepak Lamichhane reported steady revenue growth, with expectations for further increases in the remaining four months. Petroleum products and vehicles continue to be the primary sources of revenue.
The highest collection was in Poush, totaling Rs. 15.47 billion, followed by Magh (Rs. 14.44 billion) and Falgun (Rs. 14.63 billion).
Nepal-India flour millers agree to collaborate on technology and food security
Nepali and Indian flour millers have agreed to collaborate on technology exchange, technical training, and food security initiatives.
The agreement was reached at the Milling Vision 2030 seminar in Goa, organized by the Roller Mill Association of India.
A 16-member Nepali delegation, led by Nepal Flour Mills Association President Kumud Dugad, participated in the event. Discussions focused on wheat production, storage, processing, and advanced milling technologies.
India also announced plans to establish a technical training center in Lucknow and export 200,000 tons of wheat to Nepal via its National Cooperative Export Limited.
NTA advocates for ISP mergers as market consolidates
Nepal has 107 registered Internet Service Providers (ISPs), but only 20 of them are competitive. The internet market has grown from NPR 4 billion to NPR 26 billion, dominated by a few key players.
WorldLink leads with 31.78% market share and 973,000 customers, followed by Nepal Telecom (11.43%) and Dish Media Network. Despite the growing number of ISPs, many licensed companies are struggling to maintain operations.
The Nepal Telecommunications Authority (NTA) suggests mergers to improve service quality and ensure competitiveness in the expanding market.
Electric microbus fare reduced on Pokhara-Baglung and Pokhara-Myagdi routes
Dhawalagiri-Gandaki Transport Service Pvt. Ltd. has lowered fares for electric microbuses operating between Pokhara, Baglung, and Myagdi.
To mark one year of service, the fare for the Pokhara-Baglung route has been reduced from Rs 450 to Rs 400, while the fare for Pokhara-Myagdi has dropped from Rs 550 to Rs 500.
Currently, 20 microbuses operate on the Pokhara-Baglung route, with additional services to Narayangadh and Myagdi.
Increased demand for electric vehicles has led to these fare adjustments, and transport operators have called for government support to expand charging stations and infrastructure for eco-friendly travel.
Pathibhara Temple donations drop amid cable car protests
Donations at the Pathibhara Temple in Taplejung have significantly decreased, with cash offerings totaling only Rs 1.3 million last month, compared to Rs 5.57 million in the same period last year.
Visitor numbers also dropped, from 17,900 last year to 7,400 this year. The Pathibhara Area Development Committee attributes the decline to ongoing protests against a cable car project by businessman Chandra Dhakal’s IME Group subsidiary.
Expansion of Duna-Tapari industry in Khotang
A new duna-tapari (leaf bowl and plate) production business has been launched in Bamrang, Khotang, utilizing sal leaves as an alternative to plastic.
Entrepreneur Gyan Bahadur Rai aims to reduce plastic waste while creating local employment opportunities. Another duna-tapari industry has been established in Halesi, catering to religious visitors.
The local municipality plans to require the use of locally produced duna-tapari at religious sites. This initiative is expected to promote sustainability, support local businesses, and preserve traditional practices.
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