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The government’s Energy Consumption Growth and Export Strategy 2026 has set ambitious targets to transform Nepal into a major electricity producer and exporter over the next decade. But questions are emerging over how realistic those goals are, given long-standing structural and policy challenges in the energy sector.

The strategy aims to raise per capita electricity consumption from around 450 kilowatt-hours to 1,500 kilowatt-hours within a decade, while exporting up to 15,000 megawatts of power. It has also set a target of increasing total installed capacity to 28,500 MW by 2035.

The targets look achievable on paper. But the government needs to do a lot on the policy front, as persistent bottlenecks such as a lack of inter-government coordination and delays in issuing forest clearances have affected the timelines of several hydropower projects in the past.

A major concern is whether domestic demand can grow at the pace envisioned. The strategy relies heavily on shifting households and industries from fossil fuels to electricity. This includes phasing out subsidies on liquefied petroleum gas (LPG), replacing diesel-powered irrigation pumps, promoting electric cooking, and replacing coal-fired boilers in the industrial sector.

Past efforts to encourage electric cooking have not delivered tangible results. Unreliable supply, high upfront appliance costs and ingrained cooking habits have deterred consumers from shifting to electric cooking. Strong incentives for consumers and a consistent power supply could expedite the transition. The plan to divert subsidies currently given on LPG to incentivize consumers could help, as it would make LPG more expensive.

Electric mobility is another major pillar of the government’s plan to increase domestic consumption. The government plans to expand charging infrastructure and prioritize electric vehicles in public transport. While Nepal has seen a rise in private electric vehicle imports, scaling this up to buses and mass transit systems will require significant investment and policy coordination. Although small vans operate on some medium-distance routes, they cannot immediately substitute larger buses or cargo trucks.

Industrial electrification also faces challenges. The strategy proposes replacing coal-fired boilers with electric systems and offering preferential tariffs to energy-intensive industries. But businesses have historically been cautious about switching due to concerns over reliability and tariff stability. The government, however, has already moved ahead with the plan. Last week, it approved assistance worth $57m ($52m in concessional loans and $5m in grants) from the World Bank to provide concessional financing to industries replacing coal-fired boilers with electric ones.

Nepal installed capacity currently stands at around 4,000 MW. This means the country needs to generate an additional 24,500 MW over the next decade. While the generation target of 24,500 MW looks aggressive, it is not unattainable. Much of the planned capacity is expected to come from the private sector, which has shown strong interest in hydropower projects. While the private sector has successfully built small projects, it has not yet completed large-scale projects. The largest project handled by the private sector so far is the 341 MW Budhigandaki peaking run-of-the-river project, which has not yet entered the construction stage. Mega projects such as Budhi Gandaki and Upper Arun have faced years of delay due to political, environmental and financing issues.

Expanding transmission infrastructure in line with power generation will be another challenge for the government. Transmission line construction has always been difficult in Nepal due to factors such as land acquisition disputes, environmental clearances and funding gaps. If these issues persist, new power plants could be ready for generation but lack the transmission infrastructure needed to evacuate power.

Cross-border transmission infrastructure will be equally critical, as Nepal is targeting exports of 15,000 MW within a decade compared to around 1,200 MW now. A lion’s share of these exports is currently carried by the 400 kV Dhalkebar-Muzaffarpur cross-border transmission line. Construction of another 400 kV transmission line, the Butwal-Gorakhpur line, is ongoing with MCC funding. More such transmission lines linking Purnea, Bareilly, Motihari and Lucknow in India are in the planning phase. For the longer term, the Chilime-Kerung transmission line is under discussion for power trade with China. Observers, however, say a transmission line to China will be difficult to materialize due to technical and geopolitical challenges.

The government has proposed opening electricity trading to private players and moving towards a multi-buyer, multi-seller system. Such a system could create a more flexible market where private traders, industries and regional buyers directly negotiate electricity deals. This may help secure better prices and diversify buyers instead of relying mainly on the NEA. Private hydropower developers would also gain more options to sell electricity, ending their dependence on a single state buyer. However, this will again hinge on transmission infrastructure. Without major investment in transmission lines and substations, there is a risk of market liberalization remaining limited to paper.

Raising funds to implement all these plans—ranging from generation to transmission infrastructure—and finding markets for the electricity generated will be a Herculean task. The government has estimated the total investment requirement at $46.5bn. It has envisaged mobilizing funds from domestic resources, concessional loans and grants, investments from non-resident Nepalis, and energy bonds, among others. Investors will look for policy stability, bankable power purchase agreements and predictable returns. It remains to be seen how the government assures investors on these fronts.

Foreign trade data of the first nine months of the current fiscal year, released by the Department of Customs earlier this week, show exports are rising at a healthy pace. This should have been welcome news for an import-dependent economy like ours. 

However, the underlying structure is fragile and heavily dependent on a narrow set of products and markets. This imbalance continues to expose the economy to external shocks and policy risks, particularly from its largest trading partner, India.

Nepal exported products worth Rs 222.93bn between mid-July last year to mid-March of the current fiscal year. This marked an 18.46 percent increase compared to the same period last year. On a daily basis, exports averaged around Rs 825m. At first glance, the growth looks healthy. However, the composition of the country’s exports trade reveals a different picture. A significant portion, over Rs 90bn, of the country’s total export earnings came from processed soybean oil alone.

The country’s export growth is being driven less by domestic industrial depth and more by opportunistic trade. Nepal imports crude palm and soybean oil from countries as far as Argentina, processes it to meet rules of origin requirements, and re-exports the finished product to India to cash in on preferential treatments. Nepali refineries imported crude soybean oil worth Rs 96.72bn during the review period. 

This model is working simply due to tariff differentials and preferential trade arrangements rather than genuine value addition or competitive manufacturing. Such a structure, however, is unstable. A policy change in India, such as revising import duties, tightening rules of origin, or discouraging re-export-based trade, could sharply reduce or even eliminate Nepal’s largest export stream overnight. India has done it in the past. The southern neighbor has been adjusting its tariff regime periodically to protect domestic industries. Any move in that direction could significantly impact edible oil exports from Nepal.

Except for processed edible oils, Nepal’s export basket is relatively thin. Traditional exports like cardamom, carpets, pashmina, tea, and garments are contributing and posting healthy growths. However, none of these products approach the scale of edible oil exports. Nepal may have a competitive edge in these products. However, they face several constraints, ranging from quality consistency and certification issues to supply chain inefficiencies and limited branding.

Meanwhile, imports surged 13.82 percent to Rs 1.49trn. Imports over a single month, i.e. Chaitra (mid-March to mid-Apply), crossed the Rs 200bn mark for the first time. The import bill remains heavily dominated by petroleum products, with diesel imports alone exceeding Rs 100bn, followed by petrol, LPG, and aviation fuel. Since Nepal is heavily dependent on imports, India to be more precise, petroleum imports continues to widen the trade deficit.

The trade deficit itself grew by 13.04 percent to Rs 1.27trn in nine months. The export-to-import ratio slipped slightly to 6.69 percent. Part of the rise in import value can be attributed to global price pressures, due to the crisis in West Asia and subsequent supply disruptions. However, the broader issue lies in our consumption-driven economy. Remittance inflows are sustaining demand for imported goods without a corresponding expansion in productive export sectors.

The customs data suggest that the export sector is growing, but on shaky foundations. The dominance of processed edible oil exports is creating an illusion of strength while masking deeper structural weaknesses. If this single pillar weakens, the overall export performance could deteriorate rapidly.

Nepal needs to diversify its trade if it intends to build a more resilient trade profile. Strengthening high-value, labor-intensive sectors such as garments, carpets, and agro-products, while also investing in new areas like hydropower exports, IT services, and niche manufacturing can be a step in that direction. Equally important is improving trade logistics, certification standards, and market access beyond India.

India has said it is aware of reports regarding enforcement by Nepali authorities of a pre-existing provision requiring customs duty on goods purchased in India valued above Rs 100 carried by cross-border travelers.

“We understand this measure is intended to curb informal trade and smuggling,” said Randhir Jaiswal, spokesperson of India’s Ministry of External Affairs.

He also noted statements from senior Nepali officials indicating that individuals carrying household goods for personal use will not be obstructed. India has further added that India is in talks with

Janata Samajbadi Party Nepal leader and National Assembly member Mahant Thakur has said that ordinary people are facing hardship at border crossings and that due to state indifference, they are “close to rebellion.”

Thakur complained in a meeting of the National Assembly’s Development, Economic Affairs and Good Governance Committee on Wednesday that people are being forced to pay tax even on goods worth more than Rs 100 and are being made to wait for hours, while treatment is based on appearance and includes humiliation.

“People are being made to wait for hours under the pretext of taxation even for goods worth more than Rs 100. They are being treated based on appearance and are being insulted,” he said.

“People are forced to cross the border for food items like rice, flour, salt, and cooking oil due to necessity in the Indian market. Even when bringing one or two kilos of such goods, there is fear of being looted or having items confiscated at the border.”

Thakur warned that if the situation continues, it could lead to rebellion. “We are not rebels, but if such state behavior continues, we are very close to rebellion,” Thakur said.

He also objected to what he called harsh treatment by the state in the Nepal–India “roti-beti”  relationship, saying wedding vehicles are being stopped and wedding processions are being forced to walk, which is damaging the cultural environment between the two countries.

Calling the current government a “helicopter government,” he said ministers based in the capital do not understand the suffering of people in the Madhes region.

The Inspector General of Police (IGP) of Nepal, Dan Bahadur Karki, has said that cybercrime incidents in the country are increasing at a rapid pace, with cyberbullying emerging as a growing concern alongside rising internet and mobile usage.

Karki said that enforcement has become challenging because major social media platforms are not registered in Nepal, making it difficult to obtain user data or remove harmful content. He noted that only a few platforms, including TikTok, Viber, Nimbuzz, WeChat, and Poco Live, are officially registered in Nepal. However, widely used services such as Facebook, Instagram, and WhatsApp—operated by Meta—remain unregistered, creating significant gaps in regulatory and investigative processes.

According to him, women and young people are the most affected groups in rising cybercrime cases. He informed that the police have received over 4,000 complaints involving fake accounts and hate speech, more than 3,000 cases of cyberbullying and harassment, and over 10,000 complaints related to financial crimes.

He also highlighted an increase in account hacking, online fraud, threats, sexual exploitation, and blackmail cases. “Cyberbullying incidents are increasing in our country. We have received more than 10,000 financial crime complaints, over 4,000 fake account-related cases, and more than 3,000 bullying and harassment cases,” Karki said during the committee briefing.

He further stated that cooperation from foreign-operated platforms remains limited, as Nepal lacks direct regulatory offices and strong legal mechanisms for swift data access.

“Obtaining user data from platforms like Facebook and Instagram can take 20 to 25 days. In simpler harassment cases, it may take about a week. However, in serious incidents such as missing minors or suicides, information is provided within 24 hours,” he added.

Karki also noted that platforms including WhatsApp, Discord, X (formerly Twitter), Snapchat, IMO, WeChat, Reddit, YouTube, and Gmail often do not respond to data requests or content takedown appeals.

Meanwhile, the Ministry of Information and Communication Technology has recently warned that individuals spreading misinformation and disinformation will face action under the Electronic Transactions Act, 2008.

Earlier, tensions had escalated after calls for registration compliance led to restrictions on multiple social media platforms, sparking widespread public backlash. The issue has since intensified debate around digital rights and online freedom, particularly among young people, with “digital freedom” emerging as a key demand from GenZ activists.

Nepal’s private sector, long constrained by decades of political instability, is once again voicing concern over an uncertain business environment despite initial optimism following the formation of a new government earlier this year.

For more than four decades, entrepreneurs and investors in Nepal have operated amid frequent government changes and shifting policy priorities. While successive administrations have consistently described the private sector as an “engine of growth,” business leaders say that, in practice, regulatory hurdles and inconsistent policies have often undermined that commitment.

That pattern appeared set to change after the emergence of the Rastriya Swatantra Party (RSP) as the largest political force in the March 5 election. The appointment of its senior leader, Balendra Shah, as prime minister on March 27, alongside noted economist Swarnim Wagle as finance minister, raised hopes of a more stable and business-friendly policy environment.

In the immediate aftermath of the election, private sector representatives expressed optimism that the new leadership would prioritize reforms to improve the ease of doing business, attract foreign investment, and strengthen domestic industries.

Business leaders have called on the government to introduce policies focused on investment security, tax reform, and infrastructure development. They have also emphasized the need to promote import substitution and boost export-oriented industries to reduce Nepal’s trade deficit.

However, that early optimism has begun to wane.

“Expectations were high that the new government would take decisive steps to support the private sector,” said a senior representative of a leading business association. “But so far, we have not seen meaningful progress.”

Concerns about the safety of businesses resurfaced following violent protests on Sept 8–9, during which several business establishments were selectively targeted. The incidents reignited fears among entrepreneurs about the security of their investments.

Business leaders say the previous administration, led by Sushila Karki, had been expected to address these issues but failed to deliver concrete solutions.

The current government, they argue, has yet to restore confidence.

Private sector representatives have also raised concerns over recent actions perceived as heavy-handed. These include the arrest of several business figures without what they describe as adequate preliminary investigation, as well as what they call “media trials” targeting specific entrepreneurs. Meanwhile, the Central Investigation Bureau (CIB) of Nepal Police has arrested businessperson Sekhar Golchha on Thursday.

“These developments have created an atmosphere of fear,” said another representative. “Due process and transparency are essential to maintain trust.”

Further unease has been triggered by reports that the government is considering amending existing laws to allow the Commission for the Investigation of Abuse of Authority (CIAA) to directly investigate corruption cases involving private sector actors.

Business groups argue that such a move would expand the mandate of the anti-corruption body beyond its traditional focus on public officials, potentially leading to regulatory overreach.

“There are already sufficient oversight mechanisms governing private sector conduct,” says a business leader.

As Nepal seeks to revive economic growth and attract international investors, analysts say that restoring confidence among domestic businesses will be critical.

Economists note that beyond rhetoric, the government will need to demonstrate consistency in policy implementation, ensure legal predictability, and maintain a clear distinction between regulatory oversight and undue interference.

For now, the private sector remains cautiously watchful—hopeful that the new leadership will translate its promises into concrete reforms, but increasingly concerned about signals that suggest otherwise.

The new Rastriya Swatantra Party (RSP) government, led by Balendra Shah, has initiated a series of legal reforms aimed at improving the country’s business environment. Although it is too early to assess their full impact, initial signs suggest the government is moving in the positive direction as early signs of renewed confidence among domestic and foreign investors are being observed.

Government officials say the reforms are aimed at making Nepal a more predictable and business-friendly destination. Measures taken include scrapping outdated laws, easing foreign investment procedures, and expanding the automatic approval route for selected sectors. Likewise, the government has also taken a tough stance against intermediaries accused of exploiting regulatory loopholes. Business leaders say this has helped restore trust in the system and encouraged genuine investors to step forward.

Investment pledges worth over Rs 30bn have been announced in just the past month. Many see this as an early vote of confidence in the new government. Among the most prominent announcements is a major hospitality project by the Chaudhary Group. The group, one of the largest business conglomerates in the country, has begun work on a luxury hotel in Thamel with an estimated investment of around Rs 15bn. The project will be managed by the globally renowned Ritz-Carlton under the umbrella of Marriott International. Led by billionaire industrialist Binod Chaudhary, the initiative is seen as a strategic move to position Kathmandu on the global luxury tourism map.

It, however, will be misleading to suggest that the project was conceived overnight following the formation of the new government. The promoters had been planning it for a long time but were reluctant to commit funds due to policy uncertainty and a lack of stability. The formation of a government with a strong majority instilled confidence in them by providing policy clarity and stability.

“The launch of The Ritz-Carlton in Kathmandu underscores Chaudhary Group’s commitment to elevating Nepal’s tourism sector to a world-class standard. It reflects our confidence in the new government under Prime Minister Balen Shah and our ambition to contribute to job creation, high-quality tourism, and broader economic growth,” Rahul Chaudhary of Chaudhary Group said at the ground-breaking ceremony. 

The project is being developed by CG Hospitality Global, the hospitality wing of Chaudhary Group, alongside a consortium of local investors: Rabindra Bhakta Shrestha of IJ Group, Saurav Sharma of Sharma & Company, and entrepreneurs Amrit Shakya and Sanchit Shrestha.

Industry people say the project goes beyond hospitality. They say it signals a shift toward high-value tourism as the property targets premium international visitors and increasing per capita spending.

Chaudhary Group has also begun work on the Summit Heritage Hotel project in Gorkha. With an investment of over Rs 5bn, the hotel is designed to cater to high-end travelers, with room rates expected to reach up to $500 per night.

Earlier this week, Danish brewing giant Carlsberg Group expressed its intent to invest around Rs 10bn in Nepal. Officials of the group met Minister for Finance Dr Swarnim Wagle last week and said they remain committed to Nepal.

Carlsberg Group holds a majority stake in Gorkha Brewery, the bottlers of Carlsberg products in Nepal. The group has reportedly acquired Raj Brewery from Jawalakhel Group and sold 15 percent of its stakes in Gorkha Brewery to Jawalakhel Group.

The government outlined its vision for economic development in the draft of the National Commitment document unveiled this week. It sets an ambitious target of transforming Nepal into a $100bn economy within the next five years. Central to this goal is improving the business environment. The government has pledged to eliminate rent-seeking, policy manipulation, cartel practices, and artificial shortages in the market. It also aims to promote innovation, entrepreneurship, and fair competition. 

Officials say these steps will help create a more dynamic private sector and attract long-term investment. The policy framework emphasizes a liberal economic approach while ensuring equitable distribution of national income. Investments in public services such as education, health, transport, housing, and social security are also part of the strategy, as per the National Commitment document.

The government has identified the private sector as the main driver of economic growth. Likewise, it plans to strengthen investor protection and ensure a predictable and risk-free investment climate, while also encouraging public-private partnerships, particularly in innovation and infrastructure development. It also aims to expand the productive sectors to support inclusive economic growth and generate employment.

As part of its effort to reduce bureaucratic hurdles, the government has unveiled plans to digitize all business-related processes—from company registration to renewal. A paperless system is expected to improve efficiency and reduce delays. Similarly, efforts are underway to gradually formalize the informal economy by improving access to information, services, and financial systems.

The government has said that foreign direct investment (FDI) will be linked more closely with production, technology transfer, and job creation, and that new investment-friendly laws are being prepared to build investor confidence.

Whether these measures translate into sustained investment and long-term growth remains to be seen. Similar reform drives were seen in the past as well. That said, early signals suggest a shift in mood this time. The government needs to build on this to convert initial optimism into lasting economic momentum.

The Rastriya Swatantra Party (RSP) has finalized its candidates for various parliamentary committee chairmanships following a parliamentary party meeting held at Singha Durbar on Thursday. In a significant move to organize its legislative presence, the party appointed Kabindra Burlakoti as the Chief Whip, with Prakash Chandra Pariyar and Kranti Shikha Dhital designated as Whips.

Additionally, Ganesh Parajuli has been appointed as the Deputy Leader of the parliamentary party. The meeting, endorsed by Party Chair Rabi Lamichhane and Parliamentary Party Leader Balen Shah, also established monthly levies for its officials: Rs 16,500 for lawmakers, Rs 18,000 for ministers, and Rs 2,000 for ministers’ personal secretaries.

Under this new lineup, Samiksha Baskota has been nominated for the Law, Justice, and Human Rights Committee, while Ashok Chaudhary will oversee Agriculture, Cooperatives, and Natural Resources. The party has selected Aashish Gajurel for Infrastructure Development, Aakriti Awasthi for Women and Social Affairs, and Hari Dhakal for State Affairs and Good Governance. Dr Ojaswi Sherchan is nominated for the Education, Health, and Information Technology Committee, while Krishnahari Budhathoki has been assigned to the Finance Committee. 

The party has named Sumnima Udas for International Affairs and Tourism and Rahabar Ansari for the Industry, Commerce, Labour, and Consumer Interest Committee. For the joint committees, Bodhnarayan Shrestha has been nominated for Parliamentary Hearing, and Ganesh Karki will lead the committee for Monitoring and Evaluation of the Implementation of State Directive Principles, Policies, and Obligations. Notably, the party maintains its stance of supporting the main opposition party for the chairmanship of the Public Accounts Committee.

Regarding the Public Accounts Committee, the RSP has decided to support the main opposition party, aligning with a broader political consensus. Bharat Bahadur Khadka of the Nepali Congress has officially filed his candidacy for the PAC chairmanship, proposed by Mohan Acharya and seconded by Janak Raj Giri.  With the RSP, CPN-UML, and Nepali Communist Party all signaling their support for the opposition in this specific role, Khadka’s election as chairperson is virtually certain. 

Popular moto-vlogger Suraksha KC and rider Ashutosh Dhanju have secured championship titles at the Extreme Moto Enduro Cross held in Bamdi, Pokhara. Organized by Adventure Sports Hub Nepal in coordination with Panchase Adarsha and Neel Gagan Youth Clubs, the two-day event concluded this Saturday on a grueling 4.8-kilometer technical track. 

Suraksha KC claimed the women’s title by completing five laps in 42 minutes and 55.1 seconds, earning a cash prize of Rs 100,000. She was followed by Sushmita Adhikari in second place and Umadevi Tamang in third, who received Rs 50,000 and Rs 25,000, respectively.

In the men’s division, Ashutosh Dhanju emerged victorious after completing seven laps with a time of 47 minutes and 3.1 seconds, taking home the top prize of Rs 150,000. The competition for the remaining podium spots was narrow, with Bibid Jung Thapa (MRB) finishing second in 49 minutes and 14.5 seconds to win Rs 100,000, and Rajesh Magar taking third place just seconds later at 49 minutes and 19.3 seconds to earn Rs 50,000. 

The event featured a total of 60 participants, including 53 men and seven women, highlighting the growing interest in endurance motorsports in the region.