KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
The latest economic and governance indicators present a mixed picture of Nepal’s economy, where policy flexibility and rising investment commitments are being offset by structural weaknesses in implementation, accountability, and market stability.
Nepal Rastra Bank’s decision to maintain an accommodative monetary policy reflects continued concern over weak economic growth and excess liquidity in the banking system, while the large gap between pledged and actual FDI inflows highlights persistent challenges in translating investor interest into real economic activity.
At the same time, declining industrial raw material imports due to global geopolitical tensions expose Nepal’s vulnerability to external shocks and supply-chain disruptions. Governance concerns remain prominent, with the Auditor General identifying unpaid royalties, uncollected telecom fees, and irregular financial practices, signaling weak institutional oversight and revenue enforcement.
Meanwhile, the government’s push for cooperative refunds, labor sector reforms, infrastructure expansion, and aggressive market monitoring suggests an effort to restore public confidence and strengthen economic management, though rising traffic violations and repeated consumer protection breaches indicate broader enforcement and compliance challenges across sectors.
FDI commitments reach Rs 45.32 billion in 10 months
Nepal secured foreign direct investment (FDI) commitments worth Rs 45.321 billion across 728 approved projects during the first 10 months of the current fiscal year, according to the Department of Industry. The agriculture sector received the highest pledged investment, attracting Rs 22.088 billion through 16 projects. The tourism sector followed with Rs 12.54 billion committed to 189 projects. Despite the strong commitment figures, actual net FDI inflows remained significantly lower at Rs 14.55 billion during the first nine months of the fiscal year. However, this was around Rs 5 billion higher than during the same period last year.
Cooperative refund process to begin Monday
The Problematic Cooperative Management Committee has announced that the process of refunding cooperative savers will formally begin on Monday. In the first phase, priority will be given to small depositors with savings of up to Rs 10,000, particularly those affected by troubled cooperatives such as Shivashikhar and Kantipur. To manage large crowds, the committee has introduced a two-shift system. Refund payments will be distributed from 9:00 am to 3:00 pm, while grievances and statement-related services will be handled after 3:00 pm. The committee has also tightened debt recovery measures, warning defaulters and former board members of possible asset freezes and detailed financial investigations.
NRB keeps flexible monetary policy stance in third-quarter review
Nepal Rastra Bank (NRB) released the third-quarter review of the monetary policy for the fiscal year 2025/26, maintaining its flexible policy stance to support the economy amid sluggish growth. The central bank said it would review existing permanent deposit facilities for banks and financial institutions to improve the effectiveness of the interest rate corridor. As foreign exchange reserves and inflation remain within targeted limits, the NRB decided to continue the accommodative approach adopted since the start of the fiscal year. Key monetary tools, including the bank rate, cash reserve ratio, and statutory liquidity ratio, will remain unchanged to maintain financial stability and manage liquidity in the banking sector.
Labor Ministry prepares to automate re-labor approval process
The Ministry of Labor, Employment and Social Security is preparing to fully automate the re-labor approval process for foreign employment workers. The ministry said policy amendment proposals have already been finalized to establish the required legal and technical framework. It has also started labor audits in 100 companies to monitor workplace safety and occupational health standards. In addition, Nepal has initiated bilateral labor agreement processes with seven new countries, while five labor-related laws, including the Child Labor Prohibition Act, are under revision. The ministry also plans to upgrade 753 local employment service centers into skill and entrepreneurship centers, enroll 10,000 workers in the Social Security Fund, and address 5,000 complaints through the “Shramadhan Call Centre.”
Plastic raw material imports through Birgunj decline sharply
Imports of plastic raw materials through the Birgunj customs point have declined significantly due to rising tensions in West Asia and disruptions in global supply chains. Local plastic industries have been facing shortages of petroleum-based raw materials over the past three months amid fluctuating international oil prices. According to customs data, polyethylene imports dropped from 8,068 metric tons last year to 7,162 metric tons this year, resulting in a revenue decline of Rs 363 million. Imports of olefin copolymer also fell from 5,326 metric tons to 5,004 metric tons, reducing revenue by another Rs 90.6 million. Industrialists have also blamed artificial shortages and price hikes imposed by Indian suppliers for worsening the situation.
Auditor General directs NMA to clear unpaid royalties
The Office of the Auditor General has directed the Nepal Mountaineering Association (NMA) to deposit outstanding mountaineering royalties collected under government authorization. According to the Auditor General’s 63rd annual report, the NMA collected Rs 122 million in royalties but failed to deposit Rs 96.3 million into the Federal Divisible Fund as required by the Intergovernmental Finance Management Act, 2074. The report said the association also delayed reporting related financial records to the Ministry of Culture, Tourism and Civil Aviation. Separately, the report noted that Rs 162.1 million in rural telecommunication fees remain uncollected from 13 service providers.
Damauli monolithic bridge reaches 84 percent completion
Construction of the four-lane bridge over the Madi River in Damauli has reached 84 percent physical progress and 81.2 percent financial progress. The 315-meter bridge, being built along the Muglin–Pokhara section of the Prithvi Highway, includes six spans, four of which have already been completed using pre-stressed box girder technology. Work is currently ongoing on the two central concrete arch sections. The bridge, which is 23 meters wide, is Nepal’s first single monolithic bridge structure. The project is being constructed at a cost of Rs 1.21 billion, including VAT. Following the expiration of the original contract period, the deadline has been extended until July 3.
Three businesses fined during market monitoring in Birgunj
A joint district monitoring team in Birgunj fined three businesses during surprise inspections conducted under the ongoing Price Transparency Week campaign. According to officials, the action was taken against hotels and canteens found violating provisions of the Consumer Protection Act, 2018, and related regulations. Tarai Canteen was fined Rs 50,000 for serious violations under Section 15 of the Act. Jyoti Magar Hotel was fined Rs 20,000, while Choudhary Hotel received a fine of Rs 5,000 for failing to comply with consumer protection standards. The monitoring committee said inspections will continue to protect consumer rights and discourage unfair business practices.
Valley traffic police collect over Rs 2 million in fines
The Kathmandu Valley Traffic Police Office penalized 2,200 drivers for violating traffic rules within the past 24 hours, collecting more than Rs 2 million in revenue. According to traffic police data, action was taken against 168 drivers for drunk driving, 155 for unauthorized ride-sharing, 137 for traffic signal violations, and 152 for overspeeding. Similarly, 102 motorists were fined for violating lane discipline, 178 for honking in restricted areas, 123 for parking on sidewalks, and 113 for driving on one-way roads. Another 1,072 drivers faced action for various other traffic-related offences.
Price transparency campaign intensifies market inspections nationwide
The Department of Commerce, Supplies and Consumer Protection has intensified market monitoring across major trading centers under the government’s “Price Transparency Week” campaign. In the Kathmandu Valley, monitoring teams inspected 35 businesses and fined Trust Footwear Private Limited Rs 205,000 for violating consumer protection laws. Two other footwear shops were also fined Rs 15,000 and Rs 10,000 respectively. In Birgunj, three hotels and canteens were fined a combined Rs 75,000 for pricing and regulatory violations. Meanwhile, in Biratnagar, a joint monitoring team confiscated and destroyed expired food items from several businesses and ordered two food outlets to suspend operations immediately.
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