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The price of gold has dropped by Rs 2, 600 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 148, 700 per tola today. It was traded at Rs 151, 300 per tola on Monday.

Similarly, the price of silver has dropped by Rs 25 and is being traded at Rs 1,820 per tola today.

Consumers were taken by surprise when gold prices in the domestic market dropped significantly on Monday. Gold price had gone up by Rs 1,700 per tola (11.664 grams) to Rs 167,000 on Sunday. It, however, fell by Rs 15,900 per tola overnight to Rs 151,300 on Monday. 

This significant drop in gold price is linked to the government's decision to reduce customs duty on gold imports from 20 percent to 10 percent. A cabinet meeting held on Thursday had taken the decision, which took effect from Sunday, according to the Department of Customs.

The decision to reduce customs duty was primarily motivated by two factors. First, there was a dramatic decline in gold imports through the formal channel during the first four months of the current fiscal year (2024-25). Official data from the Department of Customs reveal that Nepal imported 132.56 kg of gold worth Rs 1.42bn during the review period. This is an 87 percent drop compared to the same period of 2023/24 when the country imported 1,000.5 kg (worth Rs 8.2bn).

Nepal allows only designated commercial banks to import gold. Associations of gold dealers then take the gold from banks and distribute it among its members.

Second, and perhaps more concerning, was the emergence of increased gold smuggling activities from India to Nepal. This illicit trade was fueled by India’s decision to lower its customs duty on gold to six percent from 15 percent, creating a significant price disparity between the two countries. With gold becoming significantly cheaper in India, smugglers exploited this price differential, which led to a significant surge in illegal import of gold from the southern neighbor.

Alarmed by the significant drop in revenue from gold imports, the government decided to lower customs duty to 10 percent. The policy reversal comes just months after the Pushpa Kamal Dahal administration increased the duty from 15 percent to 20 percent in mid-July 2024 through the budget for fiscal year 2024-25.

While consumers have already benefited from the decision to lower customs duty on gold, which immediately made the yellow metal cheaper, the success of this policy adjustment will depend on several factors: the recovery of legal gold import volumes, reduction in smuggling activities and stabilization of gold prices in the domestic market.

It’s still unclear if this policy intervention will be sufficient to combat gold smuggling as Nepal’s 10 percent customs duty is still higher than six percent in India.

The Nepal Stock Exchange (NEPSE) gained 15. 83 points to close at 2,683.24 points on Monday.

Similarly, the sensitive index surged by 1.86 points to close at 473. 06 points.

A total of 12,263,780-unit shares of 309 companies were traded for Rs 6. 34 billion.

Meanwhile, Best Finance Company Ltd. (BFC) was the top gainer today, with its price surging by 9. 91 percent.

Likewise, Ngadi Group Power Ltd. (NGPL) was the top loser as its price fell by 10.00 percent.

At the end of the day, total market capitalization stood at Rs 4. 27 trillion.

Nepal is one of the most climate-vulnerable countries in the world, despite contributing only 0.027 percent to global carbon emissions. Its geographic location in the Himalayan region makes it particularly susceptible to the impacts of global warming. Rising temperatures have accelerated the melting of glaciers that have existed for centuries, leading to floods, landslides, and erratic rainfall patterns. These environmental changes are taking a heavy toll on Nepal’s agriculture, water resources, forests, biodiversity, and, most importantly, the lives and livelihoods of its people. Infrastructure is also under significant strain, with roads, bridges, and hydropower plants suffering recurring damage from natural disasters. The costs of these damages are mounting year after year, leaving Nepal to grapple with the dual challenges of economic development and environmental sustainability.

The effects of climate change are no longer distant threats but pressing realities. In October, the country witnessed devastating floods and landslides, exacerbated by increasingly unpredictable monsoon rains. These events left communities in chaos, further highlighting Nepal’s vulnerability to climate-induced disasters. UN Secretary-General António Guterres’ visit to Nepal last year brought international attention to this crisis. During his trip to Syangboche in Solukhumbu, he observed the retreat of Himalayan glaciers firsthand and noted that Nepal has lost nearly one-third of its glaciers over the past 30 years. His observations underscored the urgent need to address the cascading effects of glacial retreat on local communities and downstream ecosystems, which rely heavily on Himalayan water sources.

Industrial pollution from neighboring countries, particularly India and China, is aggravating the crisis. Pollutants such as carbon dioxide and black carbon are being deposited on Nepal’s snowcaps, reducing their ability to reflect sunlight and accelerating their melt rate. These emissions, coupled with Nepal’s own environmental challenges, are creating a dire situation in which the country’s resources and resilience are being stretched to their limits. Tourism, especially mountaineering, has also played a role in worsening the environmental situation. While tourism is a cornerstone of Nepal’s economy, unregulated activities on mountains and trekking routes are contributing to pollution and degrading fragile ecosystems. If left unchecked, these practices will further exacerbate the environmental challenges posed by global warming.

There are, however, promising efforts to address these challenges. One notable example is the decision to keep Mount Machapuchare closed to climbers. This sacred peak has been preserved due to its cultural significance and the concerns raised by religious and environmental advocates. This decision has sparked broader discussions about whether other peaks should also be restricted to protect the integrity of the Himalayan ecosystem. Balancing conservation and development is a complex issue for Nepal, where tourism is a vital economic driver. However, the long-term health of the environment must take precedence to ensure that the natural beauty and resources that sustain the tourism industry are not irreparably damaged.

Nepal has immense potential to combat climate change through the use of its abundant natural resources. The glacial meltwater flowing down the Himalayas feeds over 6,000 rivers, streams, and lakes, which are critical for hydropower generation. Expanding hydropower production offers an opportunity to reduce reliance on fossil fuels and decrease greenhouse gas emissions. Additionally, Nepal has the potential to explore green hydrogen as a sustainable energy solution, using clean water and renewable electricity. Developing these resources can position Nepal as a leader in clean energy production while simultaneously addressing its domestic energy needs.

However, realizing this potential is not without challenges. Despite hosting the International Centre for Integrated Mountain Development (ICIMOD) for over five decades, Nepal has yet to see tangible benefits from its extensive research. Translating scientific insights into actionable strategies for climate adaptation and mitigation has been slow. Furthermore, cooperation with neighboring countries like India and China is crucial. For instance, large hydropower projects in the upper catchment areas of Nepal could have catastrophic consequences for millions of people in downstream regions if not carefully managed. Conducting impartial environmental impact assessments and fostering regional collaboration are essential steps in mitigating cross-border risks and ensuring sustainable development.

Nepal’s government and private sector are working together to chart a path toward a low-carbon future. The country has set an ambitious target of generating 15,000 MW of clean energy by 2030, encompassing micro-hydropower, solar, wind, and bioenergy. Achieving this goal will require significant investment, technological expertise, and policy support. The private sector will play a critical role in this transition, but international financial assistance and partnerships will be equally important. As a developing nation with limited resources, Nepal cannot achieve these targets alone. Global support is vital, not only to finance clean energy projects but also to strengthen Nepal’s capacity to withstand climate impacts.

Advocating for climate justice on the international stage is another key priority. Nepal must continue to emphasize the disproportionate burden that vulnerable countries bear due to the emissions of developed nations. Platforms like COP29 provide opportunities for Nepal to amplify its voice and push for greater financial and technological support. Developed nations must take responsibility for their historical emissions and assist countries like Nepal in building climate resilience. Additionally, scientific research and data must be leveraged effectively to highlight Nepal’s unique vulnerabilities and secure international aid for adaptation and mitigation efforts.

The road to a carbon-neutral future in Nepal is not easy, but it is achievable. By focusing on clean energy production, sustainable development, and environmental conservation, Nepal can set an example for other countries facing similar challenges. Achieving carbon neutrality by 2045 will require collective action from the government, private sector, civil society, and the international community. It will also demand a shift in mindset, recognizing that the preservation of natural resources is not just an environmental imperative but a foundation for long-term prosperity

Nepal’s journey toward sustainability offers a vision of hope and resilience in the face of adversity. Despite its small contribution to global emissions, the country is committed to playing a leading role in combating climate change. By prioritizing clean energy, advocating for climate justice, and fostering regional collaboration, Nepal can transform its vulnerabilities into opportunities. The stakes are high, not just for Nepal but for the global fight against climate change. Only by working together can we build a sustainable future for generations to come.