Submit your Article

Nepal’s external trade is expanding at a healthy pace. The country’s total foreign trade expanded by 13.55 percent to reach Rs 1,480.36bn over the first eight months of the current fiscal year. Figures released by the Department of Customs (DoC) show imports are rising strongly and exports are growing faster in percentage terms. However, the overall gap between the two remains stubbornly wide.

In the eight months of fiscal year 2025/26, trade deficit widened by 11.22 percent to Rs 1,098bn, up from Rs 987.39bn in the same period last year. Total imports surged by 12.54 percent to Rs 1,289.25bn, while exports by a notable 20.83 percent to Rs 191.11bn. On the surface, this suggests a positive shift—exports are growing faster than imports. But the reality is more complex.

Nepal’s external trade is overwhelmingly tilted toward imports. Even after healthy exports growth in the review period, imports account for 87.09 percent of total trade, while exports make up just 12.91 percent. Over the past decade, imports have nearly doubled, rising from Rs 984bn in fiscal year 2016/17 to Rs 1,804.12bn in the previous fiscal year. The trade deficit during the period remained at Rs 1527.09bn. Nepal imports fuel, vehicles, machinery, and a wide range of consumer goods, including food products, while exporting relatively little in comparison. This trend paints a picture of an economy driven largely by consumption rather than production. 

A persistent trade deficit puts continuous pressure on foreign currency reserves. The country relies heavily on remittances sent by workers abroad to finance its import bill. When remittance inflows weaken or external conditions shift, such as rising global fuel prices or slowing demand, this model becomes vulnerable.

In 2022, Nepal faced a sharp decline in foreign exchange reserves, which fell by more than 16 percent within seven months. To arrest the slide, the government imposed restrictions on the import of non-essential goods such as cars, cosmetics, and gold to prevent a balance of payments crisis. While those measures provided temporary relief, they did not address the structural roots of the problem.

Nepal is highly dependent on imports, and the gap between what it buys and sells abroad is still vast. The modest rise in share of exports in total foreign trade indicates that exports are either growing faster than imports or that import growth is beginning to slow slightly. However, the improvement is too small to significantly alter the macroeconomic picture. Also, a bulk of export receipts come from the export of processed edible oils like soybean and sunflower to neighboring India. Nepali importers import crude edible oil from countries as far as Argentina and export it to India after some value addition. If India increases crude import quota for its refineries, Nepal will lose a significant volume of its exports.   

One of the major factors behind rising imports and widening trade deficit is Nepal’s weak domestic production base. Limited industrial capacity, high production costs, and low competitiveness have for long affected Nepal’s ability to produce goods for both domestic consumption and export. As a result, the country remains reliant on foreign products even for basic needs. Despite being an agricultural nation, Nepal imports a significant volume of farm products, especially from India. The country imported paddy and rice worth Rs 27.95bn in the first eight months of fiscal year 2025/26. Potato imports also rose to reach Rs 5.73bn during the period.

Experts say traditional export sectors such as carpets, garments, and certain agro-products can perform better. However, this will be only possible if there is policy support aimed at boosting production, diversifying exports, and improving competitiveness. The political leadership should realize that encouraging industrial growth, investing in export-oriented sectors, and reducing reliance on imports are no longer optional—they are essential for long-term stability.

The decision by the Balendra Shah-led government to form a task force to prepare a discussion paper on constitutional amendment signals renewed political intent. Yet, despite years of rhetoric and electoral promises, translating that intent into action remains deeply challenging.

At the heart of the difficulty lies the arithmetic of power. Although the ruling bloc—particularly Rastriya Swantra Party—appears to command close to a two-thirds majority in the House of Representatives, this strength does not extend to the National Assembly. Since constitutional amendments in Nepal require approval from both houses, the absence of sufficient numbers in the upper chamber poses a structural hurdle. Even with potential support from smaller parties, securing the required majority in both houses remains uncertain.

Beyond numbers, the lack of political consensus presents an even more formidable barrier. While almost all major parties—including Nepali Congress (NC), CPN-UML, Nepali Communist Party, and RSP—have expressed commitment to amending the constitution, they diverge sharply on what those amendments should entail. 

The most contentious issue is the form of governance. The debate over executive power has resurfaced strongly. RSP and Maoist forces are advocating for a directly elected president, arguing that it could ensure stronger and more stable leadership. However, the Nepali Congress has consistently opposed this model, favoring the existing parliamentary system. This disagreement is not new—it dates back to the original constitution-drafting process of 2008 to 2015, when parties ultimately rejected a directly elected presidential system, citing risks for a politically fragile country like Nepal.

Such foundational disagreements make consensus-building extremely difficult. Constitutional amendments are not merely technical adjustments; they involve redefining the structure of the state. Without alignment on core principles like governance models, progress is likely to stall.

Adding to the complexity is the absence of a clear roadmap. The government has formed a task force to draft a discussion paper, but has not yet established a formal constitutional review mechanism. This raises questions about whether the process has sufficient institutional grounding to move forward effectively.

Political ambiguity further complicates the process. Many parties, including NC and UML, have acknowledged the need for amendments but have refrained from specifying concrete proposals. Even parties with clearer positions, such as RSP—which has advocated for a directly elected executive and a fully proportional electoral system—may face pressure to moderate their stance in the post-election political environment.

Electoral reform is another sensitive issue. While concerns have been raised about the current system’s inability to produce stable single-party governments, recent electoral outcomes have somewhat weakened that argument. This reduces urgency and consensus around reforming the electoral framework.

Finally, broader ideological issues—such as secularism—could emerge as flashpoints during the amendment process, further complicating negotiations.

In sum, constitutional amendment in Nepal is not just a legislative exercise but a deeply political process requiring broad consensus, institutional clarity, and numerical strength across both houses of Parliament. The current scenario reveals gaps on all three fronts. As a result, despite renewed momentum, the path toward amendment remains uncertain and fraught with challenges.

Prime Minister Balendra Shah’s early days in office have signaled a striking departure from traditional governance. From his restrained public presence to his assertive administrative reforms, Shah’s approach suggests an attempt to redefine how executive power is exercised. 

One of the most visible shifts has been his communication style—or the lack thereof. Unlike previous prime ministers, who typically engaged with the media immediately after assuming office, Shah has remained notably silent. He has neither addressed the press nor issued public statements, signaling a preference for action over rhetoric.

Even celebratory political norms were curtailed; his party instructed lawmakers not to organize victory rallies, and Shah himself kept his sole appearance brief and speechless.

Diplomatic conventions have also been disrupted. Traditionally, ambassadors from major nations meet a newly appointed prime minister within a day of the oath-taking ceremony. Shah, however, has limited such engagements, meeting diplomats only during the official ceremony. By avoiding customary congratulatory exchanges, he has maintained an unusually quiet Prime Minister’s Office.

At the same time, Shah has embraced symbolic gestures rooted in tradition. He followed Hindu rituals during his oath-taking and conducted a special pujabefore entering the official residence in Baluwatar. 

Structurally, Shah moved quickly to streamline the government. He reduced the number of ministries from 24 to 15, emphasizing efficiency. He also directed government secretaries to either accelerate their work or step down, demonstrating a results-oriented approach. 

Policy-wise, Shah’s administration has taken bold steps. The government issued a public apology to Dalits and historically marginalized communities—an acknowledgment of centuries of systemic oppression. This commitment is part of a broader 100-point governance reform agenda approved by the cabinet.

On the day of his swearing-in, the arrest of former Prime Minister KP Sharma Oli by the Ministry of Home Affairs sent shockwaves through the political landscape, underscoring Shah’s willingness to maintain accountability. 

 Further reinforcing this stance, the cabinet decided to form a high-level commission to investigate the assets of public officials dating back to 1990.

Perhaps the most significant break from the past lies in cabinet formation. Shah has prioritized merit and professional expertise over political compromise, resisting pressure from party insiders. Senior leaders expected to secure ministerial positions were sidelined as Shah asserted his authority to choose his team independently. This has allowed him to maintain tighter control over his cabinet and demand greater accountability.

In a positive sign for legislative stability, he has begun reaching out to other parties in Parliament. He has consulted with lawmakers across the political spectrum to gather their views on the budget and the government’s priorities.

Furthermore, as the Rastriya Swatantra Party pledged to amend the constitution in its election manifesto, the government has formed a committee led by Ashim Shah, the PM’s chief political advisor, to prepare a foundational document for constitutional amendment.

 Balen Shah’s premiership is marked by a blend of administrative assertiveness, cultural symbolism, and political independence. While his opaque style and limited communication may invite criticism, his decisive actions and reform-oriented agenda set him apart from his predecessors. Whether this unconventional approach will yield long-term stability remains to be seen, but it has already redefined leadership expectations in Nepal.

In any democracy, the ultimate measure of progress is not the charisma of a leader but the strength of the institutions that guarantee freedom, accountability, and justice. History has repeatedly shown us that when democracies begin to worship individuals rather than nurture institutions, the system tilts dangerously toward authoritarianism. Conversely, where institutions are built to outlast personalities, democracy endures even amidst crises.

A strong framework of institutions—such as the Election Commission, the Supreme Court, and Commission for Investigation of Abuse of Authority—should be nurtured to sustain and strengthen democracy. These bodies become the backbone of democratic functioning, which in turn nurtures smooth transitions of power and safeguards constitutional values. Whereas in countries where democracy slid into personality cults, rulers risk turning to ruler-for-life. By centralizing power around oneself and eroding institutions like the judiciary and civil services, the ruler hollows out the very foundations of governance. What follows is economic collapse, rampant corruption, and political instability. The lesson is clear: when institutions are weakened in favor of individuals, democracy becomes hostage to whims rather than laws.

Nepal’s recent political landscape offers a vivid illustration of this dynamic. Balendra Shah—popularly known as Balen—first captured the nation’s imagination when he stood as an independent candidate for Kathmandu Mayor in the 2022 local elections, becoming the first independent candidate ever elected to the position. His victory set off a wave of enthusiasm, particularly on social media, where his profile grew rapidly into something resembling a movement.

As a mayor, Balen gained immense popularity. He rarely spoke to the public and avoided the media, choosing instead to communicate through social media, generating significant online engagement. The former rapper became an enigmatic figure. People wanted to know more about him, but he rarely revealed much about himself. He attempted to clear squatter settlements in Thapathali, used force against street vendors, and openly expressed frustration with the government’s failure to coordinate on waste management—going so far as to order rubbish dumped outside government offices. These actions drew criticism and backlash, but they also cemented his image as someone willing to act where others merely talked. His aura was, by most accounts, unmatched in recent Nepali political history.

That boldness extended beyond municipal governance. He frequently lambasted the major political parties, including the Congress, CPN (UML), the Maoists, and even the Rastriya Swatantra Party (RSP), and his voice came to embody the frustration of thousands of Nepalis who felt disillusioned with these parties. During the GenZ protests on Sept 8–9 against corruption, nepotism, the social media ban, and other governance failures in Nepal, he expressed support for the demonstrators. He also called former Prime Minister KP Sharma Oli a “terrorist” and demanded that he take responsibility for the deaths during the protests. 

On 28 Dec 2025, Shah formally unified with the RSP, resigning as Kathmandu mayor on 18 Jan 2026 to contest the 2026 general election as the party’s prime ministerial candidate. While RSP chair Rabi Lamichhane retained his formal title, Shah became the party’s dominant public face and the principal engine of its electoral momentum.

The results were staggering. Shah ran against four-time former Prime Minister Oli in the latter’s own stronghold—and won convincingly.  Shah secured 68,348 votes, the highest vote total ever recorded in Nepal’s parliamentary election history. This surpassed the previous record of 57,139 votes set by Oli himself in the same constituency in 2017. Oli received just 18,734 votes, leaving Shah with a winning margin of 49,614 votes. The symbolism was impossible to miss: the new Nepal, it seemed, had emphatically displaced the old.

RSP’s broader performance matched the scale of Shah’s individual triumph. With 12 candidates winning over 50,000 votes each, the party swept the election with a landslide victory, claiming close to a two-thirds majority—falling just two seats short. Balen and his party became a defining force within the very mainstream system he once so loudly criticized.

This victory arrives at a particularly delicate moment for Nepal. In the aftermath of the GenZ protests, the country stepped outside its constitutional framework, appointing a former chief justice as prime minister. It is now on the path back to constitutional order through fresh parliamentary elections. In that context, RSP and Balen represent both enormous opportunity and considerable challenge.

The opportunity is obvious: a party with a sweeping mandate and a charismatic leader who commands genuine popular trust. The challenge is subtler—and more dangerous. Posts are already circulating on social media that deify Shah in terms that should give any democrat pause. Owing to the coincidence of his birth date with Oli’s electoral rise in the early 90s, some have compared him to Lord Krishna, born to end the reign of the tyrant Kansa. It is a flattering myth, but myths of this kind carry real costs in a democracy. When leaders are elevated to quasi-divine status, the institutions meant to check them begin to seem like obstacles rather than safeguards.

Building robust institutions ensures continuity and accountability. Leaders may inspire, but institutions protect. Personality cults may offer temporary stability, but they weaken checks and balances. True democracy is not about deifying a figure—it is about ensuring that no one is above the constitution, and no one is indispensable to governance.

Balen faces a challenge: to meet the sky-high expectations of a people hungry for honest, effective governance. But the responsibility does not rest with him alone. The people who voted for him—and those watching from afar—must also resist the temptation of placing him on a pedestal he was never meant to occupy. He is a representative of the general public in a democratic country. Nothing more, and nothing less. He cannot be above his party. He cannot be above the constitution.

If Nepal—and democracies everywhere—wish to thrive, they must resist the temptation of idolizing individuals and instead invest in the institutions that will safeguard freedoms for generations. After all, it is institutions, not idols, that make democracies durable.