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Despite a notable increase in rice production this fiscal year, Nepal continues to face a significant rice deficit, with over 1m metric tons still required to meet the country’s total demand. The government’s pledge of achieving self-reliance in rice is increasingly being challenged by the reality of soaring imports and regional disparities in cultivation.

According to the Ministry of Agriculture and Livestock Development, a total of 5.955m metric tons of rice were produced in the current fiscal year 2024/25, cultivated across 1.420m hectares of land. While the area under cultivation was 1.28 percent less than the previous year, overall production rose by 4.04 percent, marking the highest average productivity to date.

Nepal’s annual rice requirement stands at approximately 7m metric tons, leaving a gap of around 1m metric tons. This shortfall has led to a steep rise in rice imports. From July to May, the country imported paddy and rice worth over Rs 38.94bn, according to the Department of Customs.

These figures surface just as the government celebrates the 22nd National Rice Day on 29 June under the slogan “Intensification in Rice Crops: Food Security and Self-Reliance.” Critics argue the slogan contrasts sharply with the ground realities, as imports continue to undermine the self-sufficiency narrative.

Nepal imports rice from multiple countries, including the United States, Japan, Thailand, the Philippines, Indonesia, Italy, Britain, and Namibia.

To address this persistent gap, the government has introduced a targeted initiative for the next fiscal year 2025/26, aiming to scale up Chaite rice cultivation in 22 Tarai districts with a budget of Rs. 330m. The objective is to boost production by an additional 1.2m metric tons, increasing the Chaite rice cultivated area from 110,000 to 200,000 hectares.

Regional planting patterns show varying progress. In Koshi Province, paddy planting had reached 14.25 percent by the second week of Asad, slightly up from 13.71 percent in the same period last year. According to Sharan Kumar Pandey, secretary at the provincial agriculture ministry, 826,646 hectares are cultivable, with 39,387 hectares already planted.

In Karnali Province, paddy cultivation remains limited due to geographical and irrigation constraints. Only 9.52 percent of land is cultivable, and just 39,636 hectares are used for rice farming. Still, officials expect an improvement in yields due to timely rainfall this year.

The Sudurpaschim Province shows relatively strong progress, with 45 percent of rice planting completed by mid-Asad across 176,151 hectares. In contrast, Madhes Province, which contributes around 25 percent to national rice production, is lagging behind due to delayed monsoon rains, with only 10 percent of planting completed.

Gandaki Province also reported a dip in rice production. This year, 379,032 metric tons were harvested across 97,959 hectares, compared to 391,624 metric tons the previous year. Urbanization, especially in Kaski, has reduced both the area and productivity, causing an annual rice deficit of over 120,000 metric tons in the district.

As the government pushes for greater agricultural output and rice self-sufficiency, experts emphasize the need for better irrigation, subsidies, mechanization, and post-harvest infrastructure. Without substantial changes, Nepal’s dependency on rice imports is unlikely to end soon—raising questions about the effectiveness of current agricultural policies.

The Nepal Stock Exchange (NEPSE) gained 30. 09 points to close at 2,625. 84 points on Sunday.

Similarly, the sensitive index surged by 5. 34 points to close at 449. 24 points.

A total of 16,643,114-unit shares of 328 companies were traded for Rs 7. 12 billion.

Meanwhile,  Saptakoshi Development Bank Ltd (SAPDBL) was the top gainer today, with its price surging by 9. 99 percent. Likewise, Joshi Hydropower Development Company Ltd (JOSHI) was the top loser as its price fell by 5. 57 percent.

At the end of the day, total market capitalization stood at Rs 1. 47 trillion.

Global goods trade posted a strong uptick in early 2025 driven by importers frontloading purchases ahead of anticipated higher tariffs; however, weakening export orders suggest that this momentum may not be sustained. The latest WTO Goods Trade Barometer rose to 103.5 — up from 102.8 in March, while the forward-looking new export orders index fell to 97.9, pointing to weaker trade growth later in the year.

The Goods Trade Barometer is a composite leading indicator for world trade, providing real-time information on the trajectory of merchandise trade relative to recent trends. Barometer values greater than 100 are associated with above-trend trade volumes, while barometer values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.

While the current barometer reading of 103.5 (represented by the blue line in the chart) exceeds both the baseline value of 100 and the quarterly trade volume index (represented by the black line), the decline in export orders and the temporary nature of frontloading suggest that trade growth may slow in the months ahead as enterprises import less and start to draw down accumulated inventories.

The most predictive barometer component, the new export orders index (97.9), has dipped below its baseline value of 100 into contraction territory, signalling weaker trade growth later in the year. On the other hand, most other barometer components have risen above trend. Transport-related indices, including air freight (104.3) and container shipping (107.1), reflect increased movement of goods. The automotive products index (105.3) also is above trend due to resilient vehicle production and sales. The electronic components index (102.0) has climbed above trend after underperforming in 2023 and 2024. Finally, the raw materials index (100.8) shows only modest growth, just above baseline.

World merchandise trade volume growth moderated in the fourth quarter of 2024 but it is likely to rebound in the first quarter of 2025 based on the goods barometer and preliminary trade data. The WTO Secretariat's Global Trade Outlook and Statistics report of 16 April 2025 projected stable trade growth of 2.7% for 2025 under a low-tariff scenario reflecting policy conditions at  the start of the  year, and a ­‑0.2% contraction under actual policies in place as of mid-April. Subsequent developments, including US-China and US-UK trade agreements as well as higher tariffs on steel and aluminium, have nudged the forecast up and down slightly leaving the overall outlook basically flat at 0.1%.  However, trade contraction is possible, for example if US reciprocal tariffs are reinstated, or if trade policy uncertainty spreads globally. Source WTO

The government has floated a preliminary draft of the new Aviation Policy, 2025, for public consultation, outlining ambitious measures to boost international connectivity, promote investment and modernize the aviation sector. The draft prepared by the Ministry of Culture, Tourism and Civil Aviation, will replace the Aviation Policy, 2006, once it is finalized. 

The government plans to establish a permanent and independent accident investigation mechanism, ending the long long-standing practice of forming commissions after every aviation accident. This move is expected to strengthen Nepal’s commitment to international aviation safety standards.

The draft includes a proposal to grant fifth freedom traffic rights to international carriers operating from Gautam Buddha International Airport of Rupandehi and Pokhara International Airport of Kaski.

These two international airports, which are built using foreign loans, have been struggling to get international flights. 

Fifth freedom rights authorize an airline to fly passengers and cargo between two foreign countries as part of a route that originates or ends in its own country. Bhutanese airlines are currently flying passengers between Kathmandu and New Delhi on flights that originate in Paro using the fifth freedom flights granted by Nepal.

The draft proposes stricter rules on aircraft imports. As per the draft, pressurized aircraft that have completed more than 50 percent of their economic design life or over 35,000 pressurization cycles cannot be imported into the country. This is a stricter standard than the current thresholds of 75 percent life and 45,000 cycles. For non-pressurized aircraft, the maximum age limit allowed for imports is 20 years. The draft also allows Nepali citizens and institutions to own private aircraft. Such aircraft, however, cannot be used for commercial purposes.

The policy also signals a shift toward more liberal and reciprocal air service agreements, with the aim of gradually adopting an open skies policy. Third-party code-sharing and transparent allocation of routes and flight frequencies based on the capacity of Nepali carriers are among the features aimed at enhancing competitiveness.

Similarly, the draft proposes to raise the ceiling for foreign investment in international airlines based in Nepal from 80 percent to 90 percent. However, the cap for domestic airlines will remain unchanged at 49 percent. In addition, the government plans to provide land at non-operational airports to institutions engaged in aircraft maintenance, pilot training, or aircraft design and manufacturing.

To support aviation training, the draft offers tax exemptions for flying schools during their first three years of operation. It also proposes a co-investment model involving federal, provincial, and local governments for new airport construction. However, new airports will be approved only if their long-term operational viability can be ensured.