KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to source on key financial updates in Nepal. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top economic news highlights.

371 Drinking Water Projects Stalled in Madhes, Affecting 1.6 Million Residents:
The Bishrampur drinking water project in Dhanusha, launched in 2015 to serve 618 households, remains incomplete after a decade, with deep boring and pipelines unfinished. Similar delays plague projects in Kemalipur, Sabaila, Pashupatinagar, Dhangadha, and Bateshwor. Across Madhes Province, 371 drinking water projects started between FY 1999/2000 and 2017/18 remain stalled, only 94 of which are operational. The provincial government cites funding shortages, as these federally transferred projects rely on conditional grants. This year, Rs. 160 million has been allocated, far short of the Rs. 8 billion needed. Completion could provide clean drinking water to 1.6 million people in the province.

Life Insurance Business Grows by 16% in Fiscal Year 2081–82:
Life insurance companies in Nepal saw a 16.05% growth in business during fiscal year 2081–82, collecting nearly NPR 1.81 trillion in premiums, up from NPR 1.56 trillion the previous year, according to Nepal Insurance Authority. Nepal Life Insurance led the sector, contributing 26.47% of total premiums with NPR 48.03 billion. Other top performers included National Life (NPR 22.42 billion), LIC Nepal (NPR 19.92 billion), and Himalayan Life (NPR 17.66 billion). Sun Nepal Life Insurance recorded the highest growth rate at 28.8%. Overall, all companies reported notable premium increases, reflecting expanding demand for life insurance products in Nepal.

Banking Sector’s Operating and Management Costs Rise Sharply, Nearly Rs. 1 Trillion Spent on Salaries and Office Expenses:
Nepal’s banking sector has seen a significant rise in operational and management expenses. According to Nepal Rastra Bank, as of Jestha 2081/82, 54 banks and financial institutions spent nearly Rs. 1 trillion on employee salaries, allowances, and office management. Commercial banks alone spent Rs. 53.13 billion on salaries and Rs. 33.27 billion on office management, totaling Rs. 86.4 billion, up Rs. 3.5 billion from the previous year. Development banks and finance companies also increased or maintained substantial expenditures. The overall rise reflects the sector’s expansion but raises concerns over cost efficiency amid growing financial institutions nationwide.

Over 1,100 Containers of Dashain Goods Stuck at Nepal–China Border Amid Landslides and Pilgrim Rush:
Around 1,100 containers of goods for Nepal’s Dashain festival are stranded at the Nepal–China border, with 600 between Nyalam and Kodari and hundreds more stuck at Kerung. Following July floods that destroyed the Miteri Bridge and halted the Rasuwagadhi route, shipments were diverted to the Tatopani crossing, now congested by over 1,000 Kailash Manasarovar pilgrims. Landslides have further damaged roads on both sides, slowing Chinese cargo clearance. Traders warn of shortages, rising prices, and heavy losses, as billions of rupees worth of clothing, electronics, and other festive items remain in limbo. Officials say road conditions make timely delivery uncertain.

Nepal Unveils Draft Climate Finance Mobilisation Procedure to Boost Global Fund Access:
The Ministry of Finance has released the draft Climate Finance Mobilisation Procedure 2025, introducing Nepal’s first comprehensive framework to access and manage international climate funds. The policy prioritises loss and damage compensation, adaptation, emission reduction, and carbon trading, aligning with national goals and the Paris Agreement. A Climate Finance Unit under the MoF will coordinate proposals, donor engagement, and digital monitoring. The procedure enables federal, provincial, local, private, and NGO-led projects, with strict accreditation, transparency, and reporting requirements. It proposes a Common Climate Fund to pool resources and avoid duplication. Officials say the move will strengthen capacity, accountability, and equitable fund use.

Rasuwa Flood and Landslide Insurance Claims Total Nearly Rs 99 Crore:
The Nepal Insurance Authority has updated insurance claims related to the devastating flood and landslide in Rasuwa on Ashad 23. As of Shrawan 22, 78 claims worth Rs. 98.59 crore have been filed with 11 non-life insurers. Himalayan Everest Insurance holds the largest claims at NPR 55 crore from two claims. Shikhar Insurance follows with NPR 16.96 crore from 15 claims. Other companies like Nepal Insurance, Sanima GIC, and Neco Insurance also have significant claim amounts. Property insurance accounts for the majority with NPR 61.47 crore, followed by marine (NPR 22.04 crore), engineering (NPR 5.95 crore), and motor insurance claims.

Government Provides Rs. 88.66 Crore Startup Loans to 600 Entrepreneurs with Latest Knowledge and Skills:
The government has disbursed Rs. 88.66 crore in startup loans to 600 entrepreneurs through the Industrial Enterprise Development Institute. Out of 661 recommended projects for fiscal year 2081/82, 61 were rejected after field inspections due to discrepancies or blacklist status. Loans range from Rs. 5 lakh to 25 lakh at a 3% interest rate, secured by project collateral. The second phase received over 5,000 proposals, with 1,314 shortlisted and 661 approved. In the previous year, Rs. 21 crore was disbursed to 165 entrepreneurs. For fiscal year 2082/83, Rs. 73 crore has been allocated, with plans to introduce a long-term operational guideline for future loan disbursements.

Nepal Exports Record Rs. 17.46 Billion Worth of Power:
In FY 2024/25, Nepal exported 2.35 billion units of electricity worth Rs. 17.46 billion to India and Bangladesh, marking a 21% rise in quantity and 3.31% in value from the previous year. India bought power worth Rs. 17.19 billion, while Bangladesh purchased Rs. 266.7 million under a tripartite deal, paying in US dollars. Imports from India totaled Rs. 12.92 billion, making Nepal a net exporter by Rs. 4.5 billion. Energy Minister Dipak Khadka hailed the achievement as a milestone in energy diplomacy. With 700 MW added annually to the grid, NEA expects rising exports to help reduce Nepal’s trade deficit significantly.

Nepal Telecom Loses 7.7 Million Mobile Broadband Customers in One Year, Ncell Gains Market Share:
Nepal Telecom lost approximately 7.7 million mobile broadband customers in the last year, shrinking its market share from 71.85% to 55.68%, according to Nepal Telecommunication Authority data. In contrast, private operator Ncell’s market share rose by 16.17%, reaching 44.32%. While Nepal Telecom still distributes more SIM cards, it is losing users to Ncell, whose aggressive marketing and customer-friendly data packages have attracted more consumers. Nepal Telecom cites government procedures and procurement delays as challenges to competing effectively. The Telecom Authority releases only raw data and does not analyze reasons behind these market shifts, which industry experts attribute largely to promotional activities and package offerings.

Nepal Telecom Prepares to Award Controversial Billing System Tender to Huawei Amid Allegations of Favoritism:
Nepal Telecom is close to awarding its new billing system contract to Huawei, following a tender process allegedly tailored to favor the Chinese company. Despite a Supreme Court directive to maintain system balance and prevent vendor monopolies, Telecom’s tender specifications reportedly ensured only Huawei qualified. The tender allows outdated, lower-spec hardware compatible with Huawei’s older equipment—restricted by international sanctions—undermining technology upgrades and creating vendor lock-in. Past irregularities in awarding 4G contracts to Huawei, now under investigation, suggest repeated manipulation. Management officials involved in suspending prior contracts have allegedly facilitated Huawei’s continued dominance in telecom infrastructure projects.

Huawei’s Malpractices Undermine Nepal Telecom’s 4G Service Quality:
Nepal Telecom’s 4G service is underperforming due to Huawei’s malpractices, according to regulatory investigations and user experiences. Huawei, via Hong Kong-based CCSi, supplied and installed most 4G equipment but repeatedly violated contract terms by using substandard Chinese antennas instead of the agreed American and European models. This breach is currently under probe by Nepal’s Commission for the Investigation of Abuse of Authority. Additionally, Huawei failed to install critical ‘small cell’ devices essential for network coverage enhancement, neglecting a Rs. 70 million part of their contract. This negligence has severely impacted the quality and reach of Nepal Telecom’s 4G services.

Nepal Faces Declining Foreign Aid Amid LDC Graduation and Execution Challenges:
Foreign aid to Nepal dropped to $1.37 billion in 2022/23, marking a three-year decline from a pandemic peak. The reduction stems from global shifts, donor strategy changes, and domestic inefficiencies like poor project execution and delayed reimbursements. As Nepal nears graduation from Least Developed Country status, concessional aid and grants are expected to shrink, with loans becoming more prominent. Aid disbursement through government channels is falling, while off-budget support rises, raising concerns about transparency and ownership. Effective reforms in public financial management and project delivery are crucial for Nepal to sustain development progress amid evolving aid dynamics.

Nepal Heavily Dependent on Imports for Kwati Beans Despite Janai Purnima Tradition:
On Janai Purnima, many Nepalis eat Kwati—a stew of nine sprouted beans, including black gram, soybeans, mung beans, peas, lentils, chickpeas, and various beans. Despite Nepal’s farming potential, over 99% of Kwati beans are imported, mainly from Canada, Australia, and Myanmar, with smaller quantities from India, Russia, the U.S., and others. In FY 2081/82, Nepal imported 199,070 metric tons worth Rs18.25 billion; similar amounts were imported the year before. Domestic production is small and consumed locally before reaching markets. While traditionally eaten only during Janai Purnima, Kwati is now consumed year-round, boosting trade but deepening reliance on foreign supplies.

Investigation Launched into Illegal Cargo Smuggling at Tribhuvan Airport Customs:
Tribhuvan Airport Customs has initiated a thorough investigation after seizing 35 cartons of illegal cigarettes and approximately 150 kilograms of dried meat hidden among 300 cartons of cargo. The confiscated goods, linked to companies Dipinex Logistic and Ekima Express Pvt. Ltd., were destined for destinations including London, Melbourne, and New York. Preliminary findings suggest the involvement of insiders facilitating smuggling by bypassing customs checks. Multiple courier and cargo firms are suspected of repeatedly sending undeclared or illegal items abroad, damaging Nepal’s international reputation and causing significant revenue loss. A five-member inquiry committee has been formed to probe the issue further.

Relief for Madhesh Farmers as Timely Rains Boost Paddy Transplantation to 76%:
Until late July, farmers in Madhesh Province faced uncertainty over paddy transplantation due to a prolonged dry spell, relying on costly deep tube wells and struggling with unreliable electricity. Continuous rainfall over the past week has transformed the situation, accelerating transplantation across the province. As of August 8, 76.54% (285,234 hectares) of the total 372,645 hectares allocated for paddy had been transplanted—up 19.27% from a week earlier. Bara leads with 95% completion, followed by Parsa (92%) and Rautahat (85%). Agricultural officials say the rains have irrigated cracked fields, restored soil conditions, and brought relief and renewed hope to farmers.

Nepal’s Remittance Economy Transforms with Growing Female Contribution and Formal Channels:
Since the mid-1990s, Nepal’s remittance economy has expanded significantly, now benefiting over one-third of households. Women constitute nearly 20% of remitters, reflecting shifting migration patterns. The use of informal channels has dropped sharply to 7%, while formal transfers dominate. Despite rising inflows, most remittances are spent on household consumption, with limited investment or savings. Transfer costs vary by country but have generally improved, though some corridors like India and Saudi Arabia have seen increases. New migration destinations and increased transfer frequency mark recent trends, with older migrants sending larger amounts and men transferring more frequently than women.

Jumla Supplies Rs. 690 Million Worth of Farm Produce Despite Falling Output:
Jumla district supplied over 23,000 tonnes of agricultural produce worth Rs. 690 million to other districts in FY 2024/25, boosting farmer incomes and the local economy. Apples dominated exports, with 21,270 tonnes produced—the highest in four years—earning Rs. 610 million. Other key products included marsi rice, walnuts, beans, millet, and flour. Millet productivity in Jumla is the highest in Nepal at 1.41 tonnes per hectare. However, overall food crop output fell to 24,231 tonnes, down 8,000 tonnes from the previous year, due to factors like the 2022 floods that damaged paddy fields. Officials cite storage, processing, and price stability as ongoing challenges.

Travel and tour companies can now directly access foreign exchange from commercial banks to pay for hotel bookings abroad for Nepali travelers:
Nepal Rastra Bank’s Foreign Exchange Management Department has revised regulations allowing travel and tour companies to directly obtain foreign exchange settlement facilities from commercial banks to pay foreign service providers for hotel bookings abroad (except India). Previously, Nepalis traveling abroad managed their hotel and travel expenses using a foreign currency allowance printed on their passport. Now, travel companies can contract with foreign service providers and receive foreign exchange from banks to make payments on behalf of travelers. To access this facility, companies must submit nine specified documents, including registration papers, tax clearance, and notarized agreements. Commercial banks can provide foreign exchange without further approval from the central bank.

House Panel Pushes PPP Model for Udayapur Cement Industry:
The House of Representatives’ Committee on Industry, Commerce, Labour and Consumer Welfare has directed the government to operate the Udayapur Cement Industry under a Public-Private Partnership (PPP) model to boost competitiveness. Following a field study, the committee urged the Ministry of Industry, Commerce, and Supplies to draft and implement a strategic plan to resolve the industry’s chronic problems and resume operations. It also instructed the Ministry of Finance to release pending Provident Fund contributions for workers if requested. Additionally, the panel called for expanding exports of areca nut, tea, ginger, and herbs, and addressing branding and distribution issues of local alcohol.

Gold Price Hits Record Rs. 199,400 Per Tola, Nearing Rs. 200,000 Mark:
Gold prices in Nepal reached a new record on Friday, trading at Rs. 199,400 per tola—up Rs. 1,000 from Thursday’s rate of Rs. 198,400. The previous high was Rs. 198,500 on Tuesday. Silver also rose by Rs. 10 to Rs. 2,325 per tola. According to trader Tej Ratna Shakya, rising international gold prices, fueled by President Donald Trump’s new tariffs on imports from countries including South Korea, India, and Brazil, have driven the surge. International gold rose by USD 18 per ounce to USD 3,397. Shakya warned prices could soon surpass Rs. 200,000, potentially hurting sales during Teej, Dashain, and Tihar.