Submit your Article

On India’s Independence Day, Prime Minister Narendra Modi announced what he called a “gift” for consumers this Diwali in the form of long-awaited Goods and Services Tax (GST) 2.0 reforms. The announcement was expected to come from the Finance Minister, the chair of the all-powerful GST Council, but many got a surprise when the PM, on August 15, announced the upcoming GST reforms in keeping with his promise to reduce the rates before Diwali 2025, even before a formal approval from the council. 

The government wants to move to a simplified tax structure of five and 18 percent, replacing the current tax rates of 12 percent and 28 percent. This move from the Modi government is meant to increase revenues amid rising concerns in Nepal regarding a surge in imports from India.     During its 56th GST Council meeting, India proposed reducing the four main revenue slabs of the Goods and Services Tax (GST) to two main ones, after the US decided to impose a 50 percent tariff on most Indian products, apparently to increase revenues by increasing domestic consumption.     Accordingly, the previous four slabs of 5, 12, 18 and 28 rates have come down to only two main slabs of 5 and 12 percent. As for some tobacco, pan masala products and expensive vehicles, GST has surged to 40 percent.

The council has reduced the rates for daily necessities, which were charging 18 percent GST, to five percent, covering more than 175 items, including toothpaste, talcum powder and shampoo.

Meanwhile, five percent remains the rate for items of daily consumption, other food items, FMCG and other items. What’s more, the Modi government has proposed reducing the GST from 12 to five percent on hotel bookings and cinema tickets. The council has proposed reducing the GST on medicines and medical supplies under health services, which are currently charging 12 percent to five percent.

If things go as planned, medicines used in the treatment of cancer will enjoy GST exemption along with personal health insurance and life insurance. According to Indian media, there is a possibility of reducing the GST from 12 to 5 percent by exempting products like paneer, pizza, bread, khakra, fruit juices, coconut water, butter, cheese, pasta and ice cream.

What’s more, the council has proposed a five percent GST on chemical fertilizers used in agriculture, clothes, solar panels, stationery, beauty products, umbrellas and shoes. Under the new scheme of things, the Modi government has proposed reducing GST to 18 percent from 28 percent on electronics like TV sets and AC equipment as well as on petrol hybrid cars.

If not implemented properly, the proposed two-rate structure of five percent and 18 percent could be a perfect opportunity for disaster with the 13 percentage point difference between the two rates turning out to be a golden opportunity for tax evaders. This huge difference in rates can also lead to an inverted tariff structure for almost all supplies, which is why it is assumed that input tax credit has been allowed for this slab.

The council’s decision will take effect once the Government of India publishes it in its gazette.

Meanwhile, Nepali experts and traders fear that the extensive changes in indirect tax rates in the form of GST on the part of India will adversely affect Nepal's industry and business.

At a time when the gray market is moving parallely in Nepal, the unauthorized import of cheap goods will increase even further, causing a negative impact on Nepal's industry and business sector, and subsequently on the overall revenue and the economy as a whole. Entrepreneurs warn that the Indian government’s move will pose a huge challenge to Nepal's industries that are producing essential goods.

The government should take adequate steps to protect relevant domestic industries from harmful effects of the Indian move. 

The Government of Nepal’s arbitrary decision of Sept 4 to impose a blanket ban on 26 social media platforms including Facebook, YouTube, X, Instagram and LinkedIn, will have far-reaching consequences for Nepal’s digital ecosystem, democracy, freedom of expression and independent journalism. 

Social media in Nepal has become a vital space for civic engagement, where citizens, activists, and journalists share critical information, challenge state narratives, and demand accountability from those in power. Silencing these platforms not only undermines constitutional guarantees but also pushes dissent underground, fostering fear, censorship, and self-censorship.

Silencing dissent and independent journalism 

Media Action Nepal’s record shows that nearly 2,500 professional journalists—at least 1,000 of them formerly associated with corporate and big media houses in roles ranging from reporters to editors—are now running independent small newsrooms, providing the public with information of public interest. Alongside them, thousands of digital content creators engage with audiences, expose frauds, scrutinize governance failures, and contribute to Nepal’s economy through taxes they pay. These two sections of the media ecosystem have become inseparable from the lives of people in Nepal and the diaspora, serving as watchdogs over the state. Their independence from political parties has irritated the ruling coalition, which has repeatedly harassed journalists under the Electronic Transaction Act merely for reporting. This blanket ban is the government’s latest attempt to silence critical and independent voices.

Political motive

A second driver of this regressive move is political cunning. The Nepali Congress–CPN-UML coalition has grown increasingly wary of emerging political forces, independent candidates, and analysts who might challenge its dominance in the upcoming by-elections in Rupandehi district. Reports of former President Bidya Devi Bhandari attempting to position herself to lead CPN-UML have further fueled Prime Minister KP Sharma Oli’s insecurities, leading to this decision rooted as much in personal ego as in political control. None of these justifications, however, can legitimize a measure that gravely undermines press freedom, shrinks civic space, and erodes the democratic aspirations of the Nepali people.

Arbitrary and authoritarian 

This blanket ban on social media is neither legal nor constitutional. The Supreme Court of Nepal, in its recent order, did not authorize an administrative prohibition of social media platforms. Rather, it instructed the government to draft appropriate legislation to regulate digital platforms in line with the Constitution’s guarantees of fundamental rights. By issuing a sweeping administrative order, the GoN has misinterpreted the Court’s directive and acted far beyond its authority.

The Constitution of Nepal enshrines clear protections that this ban directly violates. Article 17 guarantees the right to freedom of opinion and expression; Article 19 guarantees the right to communication; and Article 27 guarantees the right to information. These provisions make it clear that in a democratic system and an open market economy, global digital connectivity cannot be arbitrarily censored. Democracy and authoritarianism cannot co-exist, and any restrictions on fundamental freedoms must be lawful, proportionate, and strictly necessary.

Internationally, Nepal has binding obligations as a State Party to the International Covenant on Civil and Political Rights (ICCPR), ratified in 1991. Article 19 of the ICCPR guarantees the right to seek, receive, and impart information and ideas of all kinds, across frontiers. Restrictions are permissible only under very narrow conditions—to protect the rights and reputation of others, national security, public order, or public health and morals—and even then, they must meet the three-part test of legality, necessity, and proportionality. The government’s blanket ban fails on all three counts. It is not based on law passed by Parliament, it is disproportionate in its scope, and it undermines the very essence of freedom of expression itself.

By imposing such an arbitrary ban through administrative order, Nepal not only violates its own Constitution but also disregards its international human rights commitments. The action sets a dangerous precedent of executive overreach, reverses the principle that rights are the rule and restrictions the exception, and risks isolating Nepal from the global democratic community. This ban is unconstitutional, arbitrary, and unlawful. It must be immediately repealed, and any future regulation of digital platforms must be pursued through transparent, participatory parliamentary processes in compliance with Nepal’s constitutional guarantees and international obligations.

Broken connectivity

The ban also strikes at the heart of social and economic life. For millions of Nepali people with family members working abroad, social media platforms are essential tools for affordable and instant communication. Cutting off these channels deepens the isolation of families and disrupts the social fabric of a nation heavily dependent on remittances. Economically, the decision will hurt small newsrooms, digital-first outlets, and independent content creators who rely on social media for visibility, outreach, and revenue generation. At a time when Nepal is striving to expand its digital economy and global connectivity, this ban risks isolating the country from international networks, stifling innovation, and discouraging investment in the digital sector.

Civic assault

There is no space for attacks on fundamental freedoms in a democracy. The arbitrary suspension of social media platforms is not only unconstitutional but also a direct assault on civic space and public trust. Unless revoked immediately, this ban will leave ruling parties morally and politically accountable to the people of Nepal and will bear long-term costs in terms of public legitimacy, international credibility, and democratic backsliding.

This ban represents a regressive step that jeopardizes democratic values, erodes citizens’ trust in institutions, and undermines Nepal’s international commitments to human rights. Such measures weaken—not strengthen—democracy, and risk pushing Nepal further away from its democratic aspirations and obligations.

Restore freedoms

First, the government must withdraw this administrative decision without delay. Any attempt to deactivate or restrict social media platforms in the absence of legislative or constitutional grounds amounts to authoritarian overreach. Second, regulation of digital platforms, if required, must strictly comply with constitutional guarantees of freedom of expression, right to communication, freedom of association, and right to information, as well as Nepal’s binding obligations under international human rights treaties.

Third, any future steps regarding social media governance must follow due process and democratic procedure. A comprehensive and transparent legislative process through Parliament is the only legitimate avenue for framing social media laws. This process must be inclusive, consultative, and rooted in the principles of legality, necessity, and proportionality as laid out in Article 19 of the ICCPR and Nepal’s own constitutional framework. Administrative shortcuts, like the present order, erode the very foundations of democracy and push the country toward authoritarianism.

If the ruling parties continue to enforce this ban, they risk being held accountable not only by the Nepali people but also before international human rights mechanisms. Democracy is built on freedoms, not restrictions—and it is only by respecting those freedoms that Nepal can maintain its democratic credibility at home and abroad.

The author, a global advocate for freedom of expression, is the founding chair of Media Action Nepal

The restoration of democracy in 1990 and the promulgation of one of South Asia’s most progressive constitutions ushered in a new era for Nepal’s media sector, which had long been under strict state control during the 30-year Panchayat regime. The constitution provided an enabling environment where both journalists and investors could operate free from fear of arbitrary arrest or harassment.

It explicitly prohibited the banning, seizure or cancellation of newspaper registrations, giving private investors a sense of security. 

Many top political leaders, who were primarily educated in India and exposed to global democratic ideals, understood that freedom of speech and expression was the cornerstone of democracy. At the same time, Nepal’s economic liberalization policies, which encouraged deregulation, privatization and an open-market economy, expanded the advertising market, the primary revenue source for the media industry.

In this environment, a significant number of private investors entered the media sector. On the one hand, this helped establish media as a legitimate industry, a major development compared to the Panchayat years when outlets served mainly as political tools for the ruling regime or opposition forces fighting for democracy. Media was then less a profession or industry and more of a mission, funded by both sides for political ends. On the other hand, journalism began to emerge as a glamorous and financially rewarding career, attracting growing numbers of professionals.

This surge also pushed universities to introduce journalism education and the media industry quickly absorbed the graduates. In the initial years, the Nepali media landscape was dominated by newspapers which broadly fell into three categories. The first were party-affiliated papers, serving as the mouthpiece of major political parties. The second were state-owned newspapers which enjoyed strong influence. The third were privately owned broadsheets which soon rose to prominence, led by Kantipur. The daily, which was launched in 1993, has grown into one of Nepal's most influential media houses today. Many newspapers, however, shut down over time due to unsustainable business models.

Since 1990, the media industry has expanded rapidly in both reach and diversity. As of 1 Sept 2025, data from the Department of Information and Broadcasting shows Nepal has 8,000 registered newspapers, 5,135 online media outlets, around 700 radio stations and 250 television stations. While this growth has enhanced access to information and amplified diverse voices, the sector continues to face challenges of quality, accountability and financial sustainability.

From the mid-1990s onward, newspapers gradually lost their monopoly as the primary source of information for the Nepali people. Although state-owned television and radio stations were already popular, the rise of private radio broadcasting reshaped the landscape.  Community radio stations, in particular, gained immense popularity for their ability to deliver news instantly. In rural areas, they became transformative platforms for disseminating news, information, education and public service messages, as well as amplifying the voices for marginalized groups, including women.

Television expanded shortly thereafter, rapidly increasing its reach nationwide. But the most disruptive change came with the rise of online news portals, which began to pull audiences away from print, radio and television. Mainstream media, once the dominant source of reliable information, has since seen declining readership and revenue as digital platforms mushroomed.

Nevertheless, Nepal’s mainstream media has made profound contributions to the nation’s socio-political development, particularly during the democratization process. Following the 1990s political changes, the country entered a turbulent period marked by two major challenges: The Maoist insurgency, which sought to impose a one-party communist regime through armed struggle and the monarchy’s attempts to reassert power, both of which undermined the constitutional order established in 1990.

During this period, the media came under attack from both sides. On one hand, it faced repression from the monarchy, particularly between 2001 and 2006, when censorship, harassment and confiscation of journalistic materials were common. On the other, the Maoists targeted journalists and media institutions, resulting in the deaths of over 36 media workers. These dual pressures placed media outlets in an extremely precarious position, as they struggled to uphold the principles of press freedom and democratic accountability amid criticisms that media should remain neutral and refrain from political engagement.

Despite censorship, threats and violence, the media remained steadfast in its commitment to democratic values, human rights and civil liberties. It continued to serve a watchdog role, exposing abuses of power and advocating for political reform. Today, however, the rapid expansion of digital media and video-sharing platforms presents new challenges to the sustainability and credibility of traditional media institutions. While the technology has improved access to information, it has not provided an adequate substitute for quality journalism. Independent, institutionalized and trustworthy media is essential in an environment increasingly polluted by misinformation, disinformation and propaganda. Yet, as outlets continue to investigate corruption and hold those in power accountable, they continue to face hostility from political actors and state institutions. This growing antagonism undermines press freedom and poses a serious threat to democracy.

The evolution of media in Nepal reflects the broader political and technological transformations the country has undergone. From the rise of radio in the 1990s to today’s digital disruption, media has consistently played a central role in supporting democracy, informing the public and amplifying marginalized voices. Protecting independent and institutional media is, therefore, vital to safeguarding democracy from collapse.

Unfortunately, mainstream media’s importance often goes unrecognized, except within the business community, which has begun to voice concerns.  In an interaction organized by the Confederation of Nepalese Industries (CNI) recently, top business leaders underscored the need for independent media that can question the government, ensure accountability and raise awareness on business and economic issues. Encouragingly, the private sector has recognized that while digital platforms may fulfill the need for instant information, they cannot replace the role of independent media.

This perspective highlights a crucial distinction between institutional media and the rapidly growing digital platforms. While digital platforms have significantly increased access to information and diversified voices in the media landscape, they often lack the editorial rigor, accountability structures, and ethical standards upheld by established media institutions. Digital platforms are frequently driven by clicks, algorithms, and viral content, which can prioritize sensationalism, misinformation, or unverified news over facts and context. In contrast, mainstream media—with its professional journalists, editorial oversight, and commitment to journalistic ethics—serves as a cornerstone of reliable information and democratic discourse.

The business community's support for independent media is particularly significant. It reflects an understanding that a functioning democracy, rooted in transparency and informed public debate, creates the foundation for sustainable economic growth. Independent media exposes corruption, monitors public spending and informs policy debates—all of which contribute to a healthier economic climate. Their support is thus not only altruistic but also a recognition of the symbiotic relationship between a free press and a thriving economy.

In conclusion, while digital platforms may serve as supplementary sources of information, they cannot replace the foundational role of independent, institutional media in a democratic society. It is essential that all sectors, not just the business community, actively support and defend mainstream media. Without strong, independent journalism, democratic accountability weakens, public discourse deteriorates and the very fabric of democracy comes under threat.

Nepal, a landlocked country situated between two major economies—India and China—faces numerous developmental challenges. Among them, the growing influence of informal trade stands out as a major obstacle to economic growth and institutional stability. While formal trade is regulated, taxed, and contributes to the state’s capacity, informal trade operates outside the law. It includes activities that are unregistered, untaxed, and often illegal. Over time, this shadow economy has become deeply embedded in Nepal’s economic structure. In many ways, Nepal suffers more from the harmful effects of informal trade than from any shortcomings in formal trade.

Informal trade in Nepal takes many forms. It includes the smuggling of goods such as gold, fuel, medicines, money laundering and electronics across open borders. It also includes unregistered businesses, undocumented labor, and transactions carried out entirely in cash to avoid tax and regulation. Nepal’s long and porous border with India, combined with difficult-to-monitor terrain in the north, makes informal trade easy to conduct and hard to control. On the domestic front, many small and medium-sized enterprises operate without any legal registration. As a result, they fall completely outside the formal economic system.

The scale of informal trade in Nepal is vast. Estimates suggest that the informal economy may account for 35 percent—40 percent of the country’s GDP and more than 80 percent of total employment. This means a large portion of Nepal’s economic activity is hidden from the state. It does not contribute to taxes, cannot be properly measured, and creates unfair competition for businesses that do comply with the law. While formal trade has its own inefficiencies—such as bureaucratic delays, red tape, and occasional corruption—these can be addressed through policy reforms. Informal trade, by contrast, creates deep and lasting damage that is harder to fix. It undermines public revenue, weakens institutions, and limits Nepal’s ability to plan and deliver services.

Addressing the informal economy is not simple, but it is necessary. A multi-pronged approach is needed—one that focuses on simplifying formal procedures, using technology, building trust, and offering real incentives for businesses and workers to shift into the formal system.

One of the first priorities should be to make it easier for small businesses to formalize. Many avoid registration simply because the process is slow, complex, and costly. Nepal should adopt a digital, one-window registration system that reduces paperwork and lowers barriers to entry. If formality becomes easier and less expensive, more businesses will join.

Another key step is improving border management. Nepal cannot control smuggling effectively using traditional methods alone. New technologies such as automated scanners, GPS tracking, and electronic cargo systems should be introduced. Just as important is cooperation with neighboring countries. Shared data and joint monitoring can help prevent illegal trade across borders.

The informal economy also depends heavily on cash, which makes transactions untraceable. Promoting digital payments is a powerful tool to reduce this dependence. However, digital infrastructure alone is not enough. The government must also invest in public awareness, digital literacy, and incentives to encourage both consumers and businesses to use digital platforms.

To support this shift, the state should reward those who comply. Businesses that register and follow regulations should receive benefits—such as tax breaks, better access to finance, and eligibility for government contracts. This changes the perception of regulation from being a burden to being a business opportunity.

Labor reform is another vital area. Most informal workers in Nepal lack legal contracts, benefits, or protections. To bring these workers into the formal economy, Nepal must design labor policies that fit the needs of small enterprises. Portable social security schemes, flexible contracts, and minimum wage protections should be introduced even for small and transitioning firms.

Overall, the informal economy reflects not just illegal behavior, but deeper problems in Nepal’s institutions and systems. It is not enough to use force or punishment. What Nepal needs is transformation—simple, transparent, and fair systems that encourage people to participate legally. Informality is often a result of necessity, not criminal intent. That’s why the government must respond with practical solutions that make formalization more attractive and accessible.

In conclusion, while informal trade may provide income and survival for many, it does long-term harm to Nepal’s economy. It limits tax collection, distorts markets, and weakens the foundations of good governance. Compared to formal trade, whose problems can be corrected through reform, informal trade creates much deeper challenges. If Nepal wants to build a resilient and inclusive economy, it must take bold steps to reduce the size and influence of its informal sector. By simplifying procedures, using technology, and offering clear incentives, the country can bring more of its economy into the formal fold—and unlock its full potential for growth and prosperity.