KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s current economic landscape reflects a complex interplay of progress and persistent challenges. While investor enthusiasm remains evident in the stock market with standout performers like Trade Tower surging despite a broader NEPSE decline, overall market caution aligns with rising loan defaults—over 18,000 businesses blacklisted in FY 2081/82—signaling economic stress.
On the policy side, reduced bank base rates below 10% and expanded rail transit access with India offer relief and potential growth stimulus. Hydropower projects like Middle Bhotekoshi and Bajhang Upper Seti inch forward, promising long-term returns, yet infrastructure upgrades such as the East-West Highway face delays due to bureaucratic hurdles.
Meanwhile, tourism is rebounding, nearing pre-pandemic levels, aided by incentives like royalty waivers for western peaks. However, structural issues persist: from struggling farmers in Bhojpur and Myagdi, to smuggling of substandard fertilisers, to poor monsoon-hit tourism in Pokhara. Regulatory crackdowns in insurance and ambitious industrial revival plans in Saptari show intent for reform, but sustained impact will depend on coordination, investment, and governance across sectors.
NEPSE drops 60 points, but Trade Tower stock soars over 61%
Nepal’s stock market index, NEPSE, declined by 60.01 points this week, closing at 2922.63. Despite the drop, Trade Tower posted a 61.02% gain, with its share price jumping from Rs 648.20 to Rs 1043.70. Sanvi Energy followed with a 54.27% increase, while Samata Gharelu Laghubitta and Saptakoshi Development Bank gained 14.69% and 11.02% respectively. These firms were among the top performers despite the overall market downturn.
Bank base rates drop sharply, making loans more affordable in FY 2082/83
Nepal’s commercial banks have cut their base interest rates significantly over the past year. As of Saun in FY 2082/83, the average base rate among 20 commercial banks has dropped to 6.11%, down from 8.13% the previous year—a 2.02 percentage point decline. Rastriya Banijya Bank offers the lowest rate at 4.89%, while NIC Asia Bank has the highest at 7.17%. The decline is due to higher liquidity, falling deposit rates, and reduced loan demand. With all banks now offering loan rates under 10%, borrowing has become more accessible for businesses and individuals, providing relief in Nepal’s struggling economy.
Middle Bhotekoshi Hydropower ready for commercial production after long delays
The 102 MW Middle Bhotekoshi Hydropower Project in Sindhupalchok is set to start commercial electricity generation, connecting to the national grid through the New Khimti substation. Built by Chilime Hydropower under NEA, the project faced years of delays due to natural disasters, border issues, and COVID-19. Final checks are underway, and NEA’s MD Hitendra Dev Shakya emphasized the need for flood readiness. Developed at a revised cost of Rs 15.03 billion, it aims to generate 542.2 million kWh annually, earning around Rs 2.8 billion. Over a million public investors supported the project through share offerings.
Over 18,000 Nepali businesses blacklisted in FY 2081/82 amid rising defaults
In FY 2081/82, more than 18,000 Nepali businesses were blacklisted for defaulting on bank loans. According to the Credit Information Bureau, a total of 53,571 individuals and firms faced blacklisting—up by 1,200 from the previous year. Among these, 18,801 were due to loan defaults, while 34,770 were flagged for bounced cheques. Traders blame cash flow issues and delayed payments. Experts warn the trend reflects growing economic pressure. Interestingly, another 18,000 people were removed from the blacklist during the same period.
Tourist arrivals in Nepal up 8.7% in July, nearing full recovery
Nepal recorded 70,193 international tourist arrivals in July 2025, marking an 8.7% rise from the same period last year. The total for the first seven months of the year reached 647,882—99% of pre-pandemic levels, per the Nepal Tourism Board. India led as the top source market, followed by China, the U.S., Bangladesh, and the UK. South Asia contributed 48.1% of arrivals. The growth is credited to tourism promotions, private sector investments, and a diverse tourism offering under the Visit Nepal Decade.
Regulatory action taken against 32 insurers for non-compliance
The Nepal Insurance Authority has sanctioned 32 insurance companies for missing report deadlines, breaching regulations, and failing to meet previously set conditions. The list includes all seven micro-insurers, 12 non-life, 12 life, and one reinsurance company. Sanctioned firms include Nepal Insurance, IGI Prudential, Nepal Life, and Himalayan Reinsurance. Led by Chair Sharad Ojha, the Authority issued warnings and demanded improved compliance to promote transparency and accountability within the sector, signaling a stricter regulatory stance.
Climbing fees waived for 97 western peaks to attract mountaineers
To boost tourism in western Nepal, the government has waived climbing royalties for 97 peaks in Karnali and Sudurpaschim for fiscal years 2025/26 and 2026/27. Approved by the Cabinet on July 28, the waiver will be published in the Nepal Gazette. Although 471 peaks are open for climbing, this region remains under-visited. The move aims to draw attention to mountains like Api and Saipal. The new regulation allows exemptions for remote peaks, off-season climbs, and specific groups, encouraging tourism growth and regional development.
Bajhang Upper Seti hydropower project secures Rs 41.6 billion investment
The 216 MW Bajhang Upper Seti Hydropower Project has reached financial closure, with Kumari Bank leading a 15-bank consortium. Located in Saipal Rural Municipality, the Rs 41.6 billion semi-reservoir project is funded through 70% debt and 30% equity. A power purchase agreement with NEA was signed in 2023, and the project is scheduled to start commercial generation by mid-July 2031. Developed by Samriddhi Energy Ltd., it will produce 1,229.6 GWh annually, contributing to energy self-sufficiency and regional development in Sudurpashchim.
Rail cargo access expanded at Biratnagar and Nautanawa under Nepal-India transit deal
Nepal has amended its transit treaty with India to allow all cargo types—containerized and bulk—to be transported by rail through the Biratnagar and Nautanawa (Sunauli) customs points, in addition to Birgunj. The amendment, already signed by Nepal and pending India’s signature, replaces the previous rule allowing only four types of goods by rail. The change is expected to reduce congestion at Birgunj, lower transport costs, and benefit industries in eastern and western Nepal. Experts welcome the move but call for greater awareness and implementation support.
Rasuwa flood insurance claims near Rs 850 million; Himalayan Everest gets largest
Following the July 7 floods and landslides in Rasuwa, insurance claims have reached Rs 848.43 million, according to the Nepal Insurance Authority. Eleven non-life insurers have reported 73 claims so far. Himalayan Everest Insurance tops the list, receiving Rs 550 million from two large claims. Shikhar Insurance has received 15 claims worth Rs 169.6 million. Most claims fall under property insurance (Rs 580.1 million), followed by marine, engineering, and vehicle insurance.
New petroleum terminal and pipeline planned in Chitwan
Nepal Oil Corporation and Indian Oil Corporation are developing a new petroleum storage terminal and expanding the pipeline near Lothar Khola and Rapti River in Chitwan. The Rs 15 billion project includes a 62-kilometer pipeline and a storage capacity of 3,200 kiloliters. Land covering 23 bigha 12 kattha has been secured in Rapti Municipality-1. Completion is expected in three years. The project also includes riverbank protection to reduce flooding risks and promises to create jobs and support local agriculture and businesses.
Saptari’s Gajendra Narayan Singh industrial zone set for revival
Efforts are underway to rejuvenate the Gajendra Narayan Singh Industrial Area in Rupani, Saptari, which deteriorated after political unrest and the Madhesh Movement. Established in 1987 with Indian support, the zone attracted many investors in its prime. Currently inactive, the area is now being revived with support from local and provincial authorities. The managing company is offering affordable land leases and providing utilities and security. With 12 small businesses already present, plans are in motion to attract new investments and rebuild the region’s industrial potential.
Nepal observes first National Millet Day to promote nutrition and food security
Nepal celebrated its inaugural National Millet Day in 2025, aiming to highlight millet’s benefits for health and food security. Held under the theme “Diet of millet dishes: Base of food security and healthy life,” the main event in Bhaktapur brought together farmers and officials. Agriculture Minister Ramnath Adhikari encouraged millet consumption due to its resilience and nutrition value. Despite suitable growing conditions, Nepal imported Rs 766 million in millet products last year. Authorities called for better seed quality and increased production to meet growing demand and reduce dependency on imports.
Rain, poor roads slow down tourism in Pokhara during off-season
Tourism in Pokhara has declined sharply due to heavy monsoon rains, poor road conditions, and the off-season. Hotel occupancy is down to about 15%, with most visitors being domestic or Indian tourists, according to the Western Regional Hotel Association. Over 1,200 hotels are underutilized. Flight cancellations and roadblocks have made travel difficult. Although Pokhara has a new international airport, it lacks regular foreign flights. Adventure activities like paragliding are also suspended. Business owners remain hopeful for a rebound by mid-October, urging better planning to attract Indian tourists during the summer.
Border farmers struggle as smuggled, low-grade fertilisers flood Lumbini markets
Farmers in Lumbini’s border areas are facing a crisis due to a spike in smuggled and poor-quality fertilisers entering from India. With shortages of government-subsidised fertilisers, traders are taking advantage of open borders to bring in untested urea and DAP, often disguised under Nepali brand names. This illegal trade continues despite border inspections and official controls, raising concerns over soil health and declining crop productivity. Experts are urging farmers to stick to certified fertilisers, warning that unregulated imports—now estimated to meet up to 70% of national demand—could cause serious nutrient imbalances in soil.
Bhojpur farmers lose interest in millet due to low returns
Once a staple crop in Bhojpur, millet farming is declining as farmers shift to more profitable alternatives. Though the crop is still widely grown for household use, it lacks market demand and is mostly used to make traditional liquor. Commercial viability remains low except during festive seasons. The Agriculture Knowledge Center estimates 6,000 hectares are suitable for millet, but cultivation is steadily falling, putting the future of this traditional crop at risk.
Akabare chilli farmers in Myagdi struggle to find buyers
In Myagdi’s Dhaulagiri Rural Municipality-7, farmers growing Akabare chilli are facing difficulties selling their harvest. Despite using organic techniques and achieving good yields, they struggle to compete with cheaper imported chillies from the Terai and eastern hills. Although areas like Banau and Bhakimli have adopted commercial farming, low local consumption and limited market connections restrict profits. Prices range from Rs 250 to 300 per kg. Local authorities are working to link producers with bigger markets in Pokhara and Kathmandu.
Highway upgrade delayed as tree-cutting stalls Kamala–Pathlaiya project
Despite receiving clearance to cut over 31,000 trees for the Kamala–Pathlaiya section of the East-West Highway upgrade, the project remains largely stalled. Only 10% of construction is done, below the 15% target. Project chief Chhabilal Paudel says delays in tree and utility pole removal are holding back progress. Contractors have shifted focus to bridges for now, while forest officials cite pending tasks like tree marking and stamping. With a 2027 deadline, the project faces uncertainty due to bureaucratic bottlenecks.
Former aviation official launches large-scale dairy farm in Morang
Retired Nepal Airlines administrator Giriraj Basnet has successfully established a modern dairy farm in Katahari Rural Municipality, Morang. After extensive research and an investment of Rs 400 million, his Greenyard Agro Farm now houses 400 cows and produces 3,000 litres of milk daily. The milk is currently sold to local dairies, but Basnet plans to start his own processing plant for products like paneer and ghee. The farm provides employment to 24 people and supports nearby farmers by buying corn for silage. His two sons, with backgrounds in CA and MBA, are helping manage the business.
Gorkha earns Rs 2 million from medicinal herb exports in FY 2024/25
Gorkha District brought in Rs 2.01 million in revenue from the collection and sale of nearly 47,000 kg of medicinal herbs in the last fiscal year. The Manaslu Conservation Area alone accounted for Rs 1.27 million, with a large portion—Rs 1.08 million—generated from just 34.19 kg of Yarsagumba. Other key herbs include Bukiphool, Timur, Padamchal, Rato Chyau, and Chiraito. Outside Manaslu, the top contributor was Jatamasi. Authorities say the herb sector is becoming increasingly important for the district’s economy.
Rangrung Waterfall becomes rising tourist hotspot in Gorkha
Rangrung Waterfall, located in Sulikot Rural Municipality-3 near Barpak, Gorkha, is attracting growing numbers of visitors with its 500-metre cascade through a dense forest. Now popular on social media, the site has become a stopover for travelers heading to Barpak. Local officials, including Chair Bishnu Bhatta, have included the waterfall in their tourism plans and are seeking provincial and federal support for infrastructure development. Hundreds now visit each weekend, and a detailed project report is being prepared to guide future investments.
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