Nepal at risk of FATF gray listing
Nepal faces the risk of being added to the Financial Action Task Force (FATF) ‘gray list’—an informal designation for countries with strategic deficiencies in combating money laundering and terrorist financing. The warning comes as the FATF Plenary and Working Group meetings, scheduled for Feb 17-21 in Paris, France, are set to review Nepal’s progress in addressing these issues.
Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari acknowledged the risk, stating that Nepal is currently in the listing phase after completing its mutual evaluation period. “Even if we are listed, we have laid a strong foundation to exit the grey list,” Adhikari said, during Anti-money Laundering Day celebrations in Kathmandu.
Officials say the FATF, an intergovernmental body that sets global standards for anti-money laundering (AML) and counter-terrorist financing (CFT), has expressed concerns over Nepal’s slow progress in key areas. Although Nepal has made legislative reforms, international observers have criticized the delays in investigations, prosecutions and enforcement of AML/CFT measures.
Nepal’s mutual evaluation process, which began in June 2022, identified several gaps in the country’s AML/CFT framework. A team from the Asia/Pacific Group on Money Laundering (APG), comprising experts from Australia, Bangladesh, Fiji, Malaysia, New Zealand, the Philippines, and Sri Lanka, had made 11 immediate recommendations for improvement. However, government officials admit that progress in implementing these reforms has been unsatisfactory.
The government had prepared to amend over a dozen laws through an ordinance in Oct 2022. The proposed amendments targeted key legislation, including the Money Laundering Prevention Act, Cooperative Act, Tourism Act, Nepal Penal Code, and Foreign Investment and Technology Transfer Act. However, the President declined to issue the ordinance.
It was only in February 2023 that Parliament passed the anti-money laundering bill, amending several laws to align with international standards. Despite these efforts, experts say challenges remain in addressing issues such as proxy ownership of assets, underreporting of property values and large cash transactions.
Law Secretary at the Office of the Prime Minister and Council of Ministers, Phanindra Gautam, Prime Minister’s Office said that while Nepal has completed the third round of mutual evaluation, the results have not been entirely satisfactory. “The current context does not reflect effective implementation,” he said.
Chief Secretary Ek Narayan Aryal acknowledged that Nepal has adequate laws, structures, and human resources to combat money laundering but stressed the lack of reporting, enforcement, and active implementation. “This has led to repeated questioning by international institutions,” he said.
Deputy Prime Minister and Finance Minister Bishnu Paudel admitted that Nepal has not done enough to address money laundering risks. “Efforts have been made to avoid being pushed into a high-risk or monitored category, but we have not been as effective as required,” he said. Paudel emphasized the need for strict adherence to international commitments and the implementation of domestic programs.
If Nepal is gray-listed, it could face significant economic repercussions, including reduced foreign investment, higher transaction costs, and reputational damage.
India, Nepal review progress of post-quake reconstruction projects
After the April 2015 earthquake in Nepal, India committed $250m in grant assistance for post-earthquake reconstruction in Nepal, the Embassy of India in Kathmandu said on Monday. “The grant was allocated in four different sectors—Housing ($100m), Education ($50m), Health ($50m) and Cultural Heritage ($50m). A JPMC (Joint Project Monitoring Committee) mechanism was set up in Aug 2017 to monitor the progress of these projects,” the statement added.
India and Nepal held the fifth meeting of the JPMC on post-earthquake reconstruction projects on Monday in Kathmandu. The Indian delegation was led by Munu Mahawar, Additional Secretary (North), Ministry of External Affairs, Government of India and the Nepalese delegation was led by Padma Kumar Mainalee, Joint Secretary, Ministry of Urban Development, Government of Nepal.
The meeting was also attended by several other representatives of the Governments of India and Nepal, consultants and other stakeholders engaged in implementation of the projects.
The meeting carried out a comprehensive review of the progress of the Government of India assisted post-earthquake reconstruction projects in housing, education, health and cultural heritage sectors in Nepal. It acknowledged the successful completion of the projects agreed under the housing sector in 2021 and the education sector in 2024.
According to the Embassy of India, Kathmandu, in health and cultural heritage sectors, both sides expressed satisfaction on the progress achieved and agreed to expedite the early completion of projects under these sectors.
Since the last JPMC meeting in Oct 2023, Government of India has handed over 26 projects in the education sector including Tribhuvan University Central Library in Kathmandu, 32 projects in the health sector and three projects in the cultural heritage sector, amounting to Rs 3.35bn.
In addition, 43 projects in the health sector and nine projects in the cultural heritage sector amounting to Rs 1.73bn have been completed during this period, as per the Embassy of India Kathmandu.
Both sides appreciated the positive socio-economic impact of the reconstruction projects, particularly in employment generation and extension of health and education facilities in remote areas.
AS (North) also visited the Gusthal Mahavihar reconstruction project, a cultural heritage site located in Guita Tole, Lalitpur Metropolitan City-8. During the visit, he reviewed the project’s progress and engaged with members of the user community.
Both sides agreed to hold the next meeting of the JPMC on a mutually convenient date.
Real estate at a crossroads
The real estate sector in Nepal has undergone significant transformations over the past few decades, serving as a vital component of the nation’s economy. Despite its potential to drive growth, employment and investment, the sector has faced persistent challenges, including regulatory bottlenecks, valuation discrepancies and market saturation. Recent government initiatives, coupled with evolving demographic and economic trends, suggest a cautious revival, although policy and structural adjustments remain critical to unlocking its full potential.
Nepal’s real estate sector has been fraught with systemic challenges. Among the most prominent is the restrictive land ceiling provision, which has hampered the free transfer of land ownership. Developers managing large-scale projects—spanning 50 to 200 ropanis of land—often find themselves unable to sell properties due to these limitations. This has created a bottleneck, stalling the market and leading to financial distress for developers, who struggle to repay loans to financial institutions.
The problem is compounded by Nepal Rastra Bank’s (NRB) stringent policies, which have tightened real estate financing. Cooperative organizations, heavily invested in real estate using depositors’ funds, faced liquidity crises, leading to their collapse in some instances. These failures not only hurt the sector but also eroded public trust in financial institutions.
Demographic factors have also played a role. Many young Nepalis emigrate for education or employment, selling their properties before leaving. Simultaneously, those abroad often remit funds to their families, who purchase land or property, resulting in market saturation. This oversupply, coupled with weak demand, has further destabilized the sector.
One critical issue undermining Nepal’s real estate sector is the disparity between government valuation of land and its actual market price. Government valuations, often a fraction of market prices, enable opportunities for illicit fund laundering. For instance, land valued by the government at Rs 1m can fetch over Rs 10m in the market. Such discrepancies hinder transparent transactions and create inefficiencies in the market. Experts have suggested involving private sector professionals in valuation committees to ensure accuracy and curb malpractice.
In an attempt to address these longstanding challenges, the government recently introduced amendments to the Land Act, National Parks Act and Forest Act through an ordinance. These amendments include limited exemptions in real estate transactions, a move aimed at revitalizing the sector. However, critics argue that such provisions may be susceptible to policy misuse, raising concerns about potential corruption.
One contentious provision allows landless squatters to gain ownership of plots they have occupied for extended periods. While proponents argue this addresses social equity, detractors warn it could encourage encroachments. The ordinance has also been lauded for easing land ceiling restrictions, which the Nepal Real Estate and Housing Development Federation believes will stimulate sectoral growth.
After years of stagnation, Nepal’s real estate market is showing signs of recovery. In the first five months of the current fiscal year, banks and financial institutions disbursed NPR 20.34bn in real estate loans, representing an 8.62 percent year-on-year growth. This resurgence aligns with an increase in registered land deeds, which climbed from a pandemic-induced low of 12,000 to over 40,000 monthly transactions in 2023-24. The revival has been attributed to growing market confidence and increased business activity. Rise in transactions and loans indicates a positive trend. However, there is a need for more practical income assessment criteria and flexible loan limits to sustain momentum.
Real estate activity has seen uneven growth across Nepal. Districts such as Sunsari, Morang, Jhapa, Kailali and Dhanusha have emerged as transaction hubs, consistently recording over 1,000 monthly transactions. In contrast, regions like Sirdibas, Gorkha, have witnessed minimal activity. This regional disparity underscores the need for localized policy interventions to address unique challenges and opportunities.
Despite its struggles, Nepal’s real estate sector holds immense potential. Urbanization, population growth and the allure of modern lifestyles continue to drive demand for residential and commercial properties. Additionally, the tourism industry offers opportunities for real estate development in hotels, resorts and homestays.
The integration of digital platforms has further revolutionized the industry. Online marketplaces like Daleykaka.com have streamlined transactions, enhancing transparency and efficiency. Additionally, increasing interest from foreign investors and the Nepali diaspora presents an opportunity to attract new capital and expertise.
To fully harness the potential of Nepal’s real estate sector, a comprehensive and strategic approach is necessary. This includes implementing policy reforms that prioritize revising land ceiling regulations to foster large-scale development while maintaining equity in land distribution. The introduction of an Urban Development Act would serve as a significant milestone, facilitating systematic urban settlement and encouraging private-sector engagement in large-scale urban projects. Ensuring valuation accuracy is equally vital. By involving private professionals in land valuation committees, discrepancies between government and market valuations can be mitigated, fostering greater transparency and reducing the prevalence of illicit transactions.
Financial accessibility remains a cornerstone for driving market participation. Nepal Rastra Bank should consider revising its income assessment criteria and loan limits, thereby creating an environment where financing becomes more attainable for both buyers and developers, which in turn would stimulate market activity. Moreover, given Nepal’s susceptibility to natural disasters, it is imperative to adopt disaster-resilient construction practices. Sustainable and resilient building methods not only ensure long-term structural stability but also contribute to safeguarding investments in the sector.
Lastly, the simplification of legal and administrative processes is crucial. Streamlined land administration procedures, coupled with the removal of bottlenecks in land revenue regulations, would significantly enhance governance efficiency, making the real estate sector more dynamic and investor-friendly.
Nepal’s real estate sector stands at a crossroads. While recent policy interventions and market trends offer hope, sustained growth requires coordinated efforts across stakeholders. By addressing structural and regulatory challenges, enhancing transparency and leveraging technological advancements, Nepal can unlock the true potential of its real estate sector. This transformation would not only bolster economic growth but also fulfill the aspirations of millions seeking stability and prosperity through property ownership. With the right blend of policy, innovation and stakeholder collaboration, Nepal’s real estate sector can evolve into a cornerstone of its economic development, fostering sustainable growth for years to come.
Rise of neo-fascism in Nepal
Neo-fascism, a modern revival of authoritarian ideologies characterized by nationalism, anti-liberalism, and the erosion of democratic norms, is increasingly shaping global politics. Once associated with the authoritarian regimes of the early 20th century, such as Benito Mussolini’s Italy, neo-fascism is now emerging in various parts of the world, including Nepal. Despite its democratic framework, Nepal is witnessing the rise of neo-fascist elements within its political parties and leaders, threatening core democratic principles and minority rights.
While South Asia has had limited direct exposure to European fascism, authoritarianism, nationalism, and militarism have manifested regionally in troubling ways. Countries like India, Pakistan, Sri Lanka, and Nepal exhibit patterns resembling neo-fascism, challenging democratic norms and inclusivity. In Nepal, both old and emerging political parties and their leaders are adopting tactics and ideologies reminiscent of fascism, undermining the nation's democratic ethos.
Nepal, with its fragile democracy and history of political instability, provides fertile ground for the rise of neo-fascist tendencies. Political parties—both traditional and new—have displayed authoritarian traits, employed exclusive nationalist rhetoric, and sought to centralize power at the expense of democratic institutions and minority rights.
A remnant of the bygone royal regime, Rastriya Prajatantra Party (RPP) embodies a yearning for monarchical centralization. The RPP often calls for the restoration of a Hindu state, promoting exclusionary nationalism that marginalizes Nepal’s religious and cultural diversity. Its leaders glorify the monarchy as a symbol of unity and stability, reminiscent of fascist ideals of a strong, centralized authority. The party’s resistance to federalism and advocacy for a unitary state align with neo-fascist tendencies of eroding regional autonomy.
The Communist Party of Nepal (Maoist Centre), under the leadership of Pushpa Kamal Dahal (Prachanda), has also exhibited authoritarian characteristics. During the decade-long insurgency, the Maoists relied on militarization and the glorification of Prachanda’s leadership, fostering a cult of personality that echoes Mussolini’s tactics. Even in the post-insurgency period, the party’s hierarchical structure and intolerance for dissent within its ranks reveal authoritarian tendencies. The party's leaders have used populist rhetoric to consolidate power while sidelining opposition voices, undermining democratic discourse.
In recent years, concerns have grown over the influence of neo-fascism within Madhes-based political parties in Nepal. These parties, which represent the Madhesi community, have historically advocated for marginalized groups’ rights and greater autonomy. However, some factions are increasingly adopting ultra- regionalist, authoritarian ideologies, characterized by aggressive regionalism, ethnic superiority, and exclusionary politics. This shift threatens the inclusive federalism enshrined in Nepal's constitution, raising fears about undermining democratic values and political pluralism. As these parties navigate their identity and power, it is crucial for Nepal to ensure that democratic principles and federalism are upheld amidst rising nationalist pressures.
Emerging political figures like Rabi Lamichhane and his Rastriya Swatantra Party (RSP) have capitalized on populist and nationalist sentiments. Lamichhane’s rhetoric often targets foreign influence, invoking fears of national sovereignty being undermined. While this approach garners public support, it risks fostering xenophobia and scapegoating minorities, particularly the Madhesi and indigenous communities. This exclusive nationalism, combined with Lamichhane’s attempts to position himself as a strong leader, reflects neo-fascist tendencies.
Even mainstream parties like the Nepali Congress (NC) and the Communist Party of Nepal (Unified Marxist-Leninist) are not exempt from neo-fascist tendencies. Leaders like KP Sharma Oli of the UML have frequently used divisive nationalism to strengthen their hold on power. During his multiple terms as prime minister, Oli oversaw a growing centralization of authority, efforts to undermine parliamentary processes, and the sidelining of provincial governments. His frequent use of national security threats to justify his policies echoes neo-fascist tactics of consolidating power through fear and division.
Neo-fascism in Nepal often manifests in exclusive nationalist rhetoric that sidelines ethnic, linguistic, and religious minorities. Political parties frame federalism and decentralization as threats to national unity, undermining the representation and autonomy of Madhesi, Dalit, and indigenous communities. The opposition to inclusive policies fosters a narrow vision of national identity, eroding Nepal’s rich multicultural heritage.
The suppression of dissent is another hallmark of fascism evident in Nepal. Successive governments have restricted media freedom, targeted journalists and activists, and leveraged cyber laws to curb online expression. These actions echo tactics used by neo-fascist regimes globally to silence opposition and control public discourse. The increased surveillance of civil society groups and restrictions on peaceful protests further signal a drift toward authoritarianism.
Nepal’s political leaders frequently invoke national security concerns to justify expanding military and police powers. For example, the government’s decision to militarize border areas under the pretext of protecting sovereignty has been criticized as overreach. Similarly, the increased reliance on security forces to manage civil unrest fosters a climate of fear and normalizes authoritarian measures.
Social media has become a powerful tool for spreading nationalist rhetoric and neo-fascist ideologies in Nepal. The widespread use and abuse of platforms have fueled the rise of figures like Kathmandu Mayor Balendra Saha and RSP leader Lamichhane. Political leaders and parties leverage platforms such as Facebook and Twitter to amplify ultra-nationalist messages, frequently targeting minorities and critics. The swift spread of misinformation and polarizing content divides society, providing fertile ground for neo-fascist ideas to flourish.
The rise of neo-fascism in Nepal threatens its democratic framework, inclusivity, and civil liberties. Continued erosion of democratic institutions, suppression of dissent, and centralization of power could undermine Nepal’s progress toward becoming a stable, pluralistic society.
Moreover, Nepal’s geopolitical position between India and China makes rising nationalism particularly risky. Anti-foreign rhetoric could strain diplomatic relations, disrupt trade, and hinder regional cooperation.
As Bertrand Russell warned, fascism thrives in times of unrest, using propaganda and nationalism to scapegoat minorities and consolidate power. Nepal’s path forward requires vigilance, an informed citizenry, and a robust civil society. Political parties must commit to democratic norms, promote inclusivity, and resist the temptation to exploit nationalist sentiments for short-term gains.
Strengthening democratic institutions, ensuring media freedom, and fostering interethnic dialogue are critical to countering neo-fascist tendencies. Nepal must safeguard its democratic achievements and uphold the values of pluralism, equity, and justice for all its people.
IMF approves $40.6m for Nepal
Nepali authorities and the International Monetary Fund (IMF) team have reached a staff-level agreement for the fifth review of Nepal’s economic reform program supported by the IMF’s Extended Credit Facility (ECF) arrangement.
The agreement is subject to approval by the IMF Executive Board which will give Nepal access to about $40.6 million in financing. The agreement is subject to approval by the IMF’s Executive Board. Upon completion of the Executive Board Review, Nepal would have access to SDR 31.4m (about $40.6m), bringing the total IMF financial support disbursed under the ECF to SDR 219.7m (about $283.9m), from a total of SDR 282.42m, according to the statement.
The economic recovery that began in the fiscal year 2023-24 was disrupted by the severe floods in September 2024, which caused widespread damage across critical sectors and further dampened the still-weak domestic demand. Inflation accelerated to 6.1 percent in Dec 2024 due to a spike in food prices following the floods, the statement says.
Nepal’s external position continued to strengthen, bolstered by robust remittances and subdued imports. Accordingly, revenue growth remained modest. Amid the ongoing correction from the post-pandemic credit boom, vulnerabilities in the financial sector are increasing, with the banking sector's non-performing loans reaching 4.4 percent in October 2024, and the financial health of the savings and credit cooperatives (SACCOs) sector deteriorating.
“Growth is expected to gather pace, exceeding 4 percent in 2024-25, supported by stronger public capital expenditure, including on post-flood recovery and reconstruction efforts.
Relatedly, imports are expected to rebound in the second half of the year. Flood-driven food inflation is expected to ease as transport networks are repaired and agricultural output recovers improving the food supply. However, the outlook is subject to important downside risks, including under-execution of growth-enhancing capital projects, an increase in financial sector vulnerabilities, and potential disruption to policy continuity and reform implementation.
Against this background, policies and reforms envisaged under the ECF-supported program remain well-placed to help preserve macroeconomic stability and strengthen Nepal’s policy framework. Growth-friendly fiscal consolidation—by accelerating capital expenditure coupled with stronger revenue mobilization—is critical to boost sustainable and inclusive economic growth.
Timely execution of spending will further support this effort. Monetary policy should continue to follow a data-driven approach to maintain price and external stability while supporting growth. With amendments to the AML Law enacted, the next steps would be to focus on the effectiveness and application of the new legal framework. Amendments of the NRB Act are key to strengthening the central bank’s independence and governance.
Trump signals aggressive Indo-Pacific Strategy
As in his first tenure (2017–2021), US President Donald Trump has signaled his intention to adopt an aggressive Indo-Pacific Strategy (IPS) to counter China's growing influence in the region. While his administration’s exact approach remains to be seen, Trump’s actions thus far suggest a more unilateral and hardline strategy compared to his predecessor, Joe Biden, who focused on fostering partnerships and multilateral cooperation in the region.
A key question is whether Trump will continue Biden’s approach of strengthening ties with allies and regional partners or pivot to a more isolated stance, prioritizing direct US action. Another point of uncertainty is whether his administration will focus on a military-centric strategy or emphasize economic engagement with countries in the Indo-Pacific. But one thing appears certain: the Trump administration's IPS strategy is likely to adopt a more confrontational tone. This approach could aggravate not only Beijing but also some US partners in the region.
Shortly after taking office, US Secretary of State Marco Rubio held a high-profile meeting with foreign ministers from Australia, India and Japan—the member nations of the Quadrilateral Security Dialogue or "Quad." A statement from the US State Department emphasized the group's shared commitment to a “"Free and Open Indo-Pacific,” where democratic values, rule of law, sovereignty, and territorial integrity are upheld.
The statement underscored the Quad's collective stance against unilateral actions that attempt to alter the regional status quo through coercion or force. “Our four nations maintain our conviction that international law, economic opportunity, peace, stability, and security—especially in the maritime domain—are essential for the prosperity of the Indo-Pacific region," the statement declared. It also highlighted commitments to strengthening regional maritime, economic, and technological security in response to rising threats, while promoting reliable and resilient supply chains. India, as the next host of the Quad Leaders' Summit, is set to play a pivotal role in steering the group's agenda.
China has criticized the Quad, labeling it as an attempt to encircle Beijing and undermine its strategic interests. China's opposition to the Quad's initiatives could escalate tensions in the region, especially as the Trump administration doubles down on its Indo-Pacific focus.
The Indo-Pacific Strategy introduced by the Biden administration in 2022 emphasized collaboration with India and other regional groupings to promote stability in South Asia. During Biden's tenure, India-US relations saw a significant deepening of their strategic partnership. However, Trump's return to power could strain this partnership, particularly due to his hardline stance on tariffs and trade. Trump has already suggested the possibility of imposing a 100 percent tariff on imports from BRICS nations, including India—a move that could severely impact the trade relationship between Washington and New Delhi.
Trump's approach to China is also likely to exacerbate existing tensions. Having already initiated a trade war with Beijing during his first term, Trump has signaled his intent to escalate economic pressure on China. In a recent press conference, he hinted at imposing a 10 percent across-the-board tariff on all Chinese goods as early as Feb 1. Such a move would likely lead to further deterioration in US-China relations, with significant ramifications for the global economy.
Beyond trade, Trump’s previous decisions—such as withdrawing from the Paris Climate Accord and the World Health Organization—have raised concerns about the US’ role in addressing global challenges. These moves could undermine US credibility and influence in the Indo-Pacific, where collaborative efforts on climate change, public health, and sustainable development are crucial.
Despite these challenges, Trump is expected to continue working with India to counter China's influence in the region. Reviving talks with North Korea, a hallmark of his first term, may also resurface as a diplomatic priority. However, Trump’s stance on Taiwan, a critical flashpoint in US-China relations, remains uncertain.
Nepal, a strategically located country in South Asia, is unlikely to remain unaffected by these geopolitical shifts. Nepal’s relations with both India and China are integral to its foreign policy, and any significant changes in US strategy toward these powers will have a ripple effect on Kathmandu's diplomatic calculus. For instance, further deterioration in US-China relations could constrain Nepal's ability to navigate its relationships with both nations.
Additionally, Trump's policies on global issues such as climate change, health and minority rights are likely to impact Nepal directly. The country, which is already grappling with the challenges of climate change, relies on international cooperation and funding to implement mitigation and adaptation strategies. A more isolationist US approach could hinder Nepal’s efforts in these areas. Changes in US funding or support for health services and rights related to sexual and gender minorities could also have social and economic repercussions.
As Trump’s administration takes shape, it will be crucial to monitor how his Indo-Pacific Strategy evolves and its implications for the region and beyond.
Navigating Nepal’s topographical challenges
Nepal, a landlocked country situated between India and China, faces unique challenges due to its geographical location and rugged topography. The nation’s landscape is characterized by three distinct regions: the high Himalayan Mountains in the north, the mid-hill regions and the southern plains (Tarai). These diverse terrains pose significant logistical challenges for domestic distribution and access to international markets. With over 80 percent of its population residing in rural areas and dependent on agriculture, Nepal’s economic growth hinges on improving infrastructure to facilitate connectivity, trade and development.
Despite these challenges, Nepal’s strategic position as a bridge between two of the world’s largest economies offers immense potential for growth. To harness this potential, public-private partnerships (PPPs) are critical in addressing infrastructure gaps and enhancing the logistics sector.
Below are actionable policy guidelines for establishing an effective PPP framework:
Institutional framework
A dedicated PPP unit: The government must set up a dedicated PPP unit or agency to oversee project implementation, provide technical support and standardize logistical practices for logistics service providers. This unit will coordinate provincial and national transport initiatives to ensure harmonization and efficiency.
Legal and regulatory environment: Introducing PPP-specific legislation is essential to define clear frameworks for contract enforcement, risk-sharing and dispute resolution. These laws will provide confidence to private investors and international donors.
Decentralization: An empowering provincial government is key to managing localized PPP projects. Each province should focus on developing infrastructure tailored to its production centers, whether for manufacturing or agriculture. This includes establishing and investing in transport hubs, warehouses, and equipment suited to the geographical terrain, such as all-weather roads and specialized vehicles for mountain regions.
Project selection and prioritization
Feasibility studies: Conducting rigorous feasibility studies is vital to prioritize infrastructure projects such as roads, railways, airports and multimodal connectivity. The studies should consider environmental, technical and financial aspects to ensure sustainability. Key projects should include centralized logistics hubs in major cities like Kathmandu, Birgunj, Biratnagar, Kakarvitta and Bhairahawa, with efficient links to border points for customs and warehousing.
Alignment with national goals: PPP projects should align with national plans, such as Nepal’s five-year plans, focusing on reducing isolation of remote areas, improving trade and promoting economic growth through efficient distribution of goods and services.
Risk allocation and management
Risk-sharing mechanisms: Clear guidelines for risk-sharing between public and private sectors are crucial, particularly given Nepal’s susceptibility to natural disasters like landslides, floods and earthquakes.
Utilization of resources: The government should leverage public land for long-term leases and offer financial guarantees for projects that may not be immediately profitable but have high social and economic value. Blended financing models combining public, private and donor investments can provide the necessary funding and technical assistance.
Capacity-building: Investing in capacity-building is crucial for both government officials and local communities. Train government personnel in PPP project design, negotiation and management. Provide employment and training opportunities to local populations to ensure inclusivity and skill development. Engage communities, NGOs, and private sector stakeholders in decision-making to foster trust and collaboration.
Technology and innovation
Renewable energy solutions: Focus on small-scale hydro, solar and wind energy projects to power remote areas and reduce dependency on non-renewable resources.
ICT and digital connectivity: Develop digital solutions to bridge connectivity gaps, such as internet access and e-commerce platforms for rural communities.
Resilient engineering: Adopt innovative engineering solutions such as modular bridge systems and climate-resilient road designs to overcome geographic and climatic challenges.
Environmental and social sustainability
Environmental safeguards: Ensure regular environmental impact assessments (EIAs) to mitigate risks to the ecosystem during infrastructure development.
Community benefits: Design projects to deliver tangible benefits, such as improved market access, healthcare and education for remote populations.
Green logistics: Promote eco-friendly technologies like electric trucks, solar-powered warehouses and sustainable building materials.
Digital platforms
Develop a central digital platform for data collection, goods tracking and information sharing among stakeholders. Enable real-time updates on traffic, warehouse capacities and customs clearance to improve efficiency. Introduce e-payment systems for tolls, customs and other fees to reduce inefficiencies.
Cross-border trade facilitation
Given Nepal’s dependency on its transit neighbors, harmonizing customs procedures with India and China is critical. Collaborate on reducing delays at border points, such as Birgunj-Raxaul in the south and the Rasuwagadhi-Kerung crossing in the north.
Monitoring and evaluation
Transparent and robust monitoring mechanisms are essential for PPP success. Define key performance indicators such as reduced transport costs, increased trade volumes and time savings. Engage independent bodies for audits and evaluations. Ensure transparency through public disclosure of contracts, progress reports and financial data.
Conclusion
Nepal’s landlocked status and challenging terrain may appear to hinder its development prospects, but they also offer opportunities for innovation and collaboration. Developing a well-structured PPP framework can bridge infrastructure gaps, enhance logistics and connect Nepal’s remote regions with domestic and international markets.
By implementing these policy guidelines, Nepal can unlock its potential as a trade hub, fostering sustainable economic growth and improving the quality of life for its citizens.
When sweet music cuts like a knife
Nepal is famous not only as the Himalayan Shangri-La but also as a country with distinct tangible and intangible heritages. Within a relatively small terrain, Nepali communities have preserved these heritages for centuries despite adversities.
For example, the Damai community has been preserving its musical heritage for ages—without getting the respect it deserves.
Historians believe that the word ‘Damai’ comes from the musical instrument called ‘Damaha’ (a large drum). This musical instrument is made using refined leather and molded by a copper or brass strip into an oval shape. Music is produced through this instrument by beating on its either side with a pair of sticks called gaja. The primary role of a Damai is to play Damaha and other musical instruments like the Sanai for the society on social occasions like weddings.
In many remote villages of Nepal, people from this community have been performing for the society at homes and temples for extremely low returns, for ages.
Anthropologist Carol Tingey says, “The Damais occupy a unique place within this immense cultural diversity. They are thought to be an auspicious caste in Nepal who are professional musicians while their supplementary caste occupation is tailoring.”
The cateist mentality prevalent in the society has sidelined this important role of the community, raising a wall between the ‘Dalits’ and ‘non-Dalits’ by undermining their devotion, emotion and contributions and their musical heritage.
This, despite the fact that the Damai musical heritage constitutes the very soul of the Khas culture in Nepal where Damai Baja (musical instruments) are compulsory in every cultural and religious rite or ritual of the Khas community. So much so that puja (obeisance) offered to divinities at their abodes is considered incomplete and in vain without their music.
On different sociocultural and religious occasions, the traditional musicians from this community play three different types of music—the Mangal Dhun, Ramkali Dhun and Malshree Dhun. Their music forms an inalienable part of marriage, Vratavandha (sacred thread ceremony) and other sacred rituals. In Karnali and Far-West regions, their music is essential for invoking Devata (the deities) in fairs, something that points toward the richness, beauty and importance of Damai music in our society.
Delving into their musical heritage, Panche Baja and Naumati Baja—two sets of musical instruments, comprising five and nine instruments—come to mind. Panche Baja consists of Damaha, Tyamko, Jhyali, Sanai and Dholaki whereas Naumati Baja is an ensemble of Panche Baja along with Karnaal/Narsinga and a pair of Damaha and Sanai. According to scholar Ramsaran Darnal, “Panche Baja used to be taken as a symbol of luck and fortune before the Vedic era. In Nepal’s temples, Nagara and other musical components of Panche Baja are played during puja. Due to this religious aspect, the Panche Baja is known as Dev Baja (God’s Band)”.
But the ‘caste system’ has ruined the divinity of this musical heritage, including Panche Baja and Naumati Baja, and its importance in society. Foreign scholars have done their PhD in Damaha, Panche Baja and Naumati Baja while we the Nepalis have failed to study our own musical heritage and realize its importance, thanks to this evil system.
Music is a boon for the whole of humanity, it is something that transcends religions, languages and territories. But in our society, music also signifies a particular community. For instance, we take the Dhime Baja as a heritage of the Newars, associate Dhamphu-Tunguna with the Tamangs and Damaha-Sanai with the Damais. Our ethnocentric thoughts contradict with universal values of music, making us incapable of embracing all these heritages as Nepali music and prompting coming generations to disrespect this heritage of ours. For instance, we do not see parents buying a Damaha for their children nor do we see a child playing the Sanai. Thanks to our mindset, youngsters are playing Western musical instruments like the guitar, drum set and the piano instead of native musical instruments.
Music has that healing effect: it gives humanity immense pleasure, helping it forget pain and sorrow. But for musicians from Dalit communities like Damai and Gandharva, music ends up inflicting torture to a people as it comes with a ‘tag’ and a stereotyped identity. In many villages, Damai musicians have to sit at the corner of the host’s house as the ‘tradition’ forbids them from going inside and eating with others. Even the so-called ‘high-caste’ people dance to the tune of Damai musicians, but they do not bother to show respect to the latter. All that these gifted musicians get as rewards are life-long wounds, disrespect, discrimination and disgust.
Our musical heritage particularly carries casteist flavor and vibes. The so-called non-Dalits give the tags of ‘touchable’ and ‘untouchable’ on the basis of music people play. The Damai and the Gandarva communities of our country are classed among the ‘untouchables’. The sole reason is the profession they hold—the musical instruments they play. Though the scenario has slightly changed, the casteist mentality has not changed much.
For public consumption, people say, “We all are equal; there is no discrimination at all.”
But the truth is different. News reports on caste-based discrimination and its consequences feature almost on a daily basis.
Murder, physical torture, social boycott, segregation, extortion and other forms of punishment against the Dalits are going on unchecked even in an era where an increasing number of Nepali people are getting academic degrees from prestigious universities like the Oxford and TU.
National development becomes possible with factors like cooperation, equality and social emancipation even when there’s a lack of cultural and natural resources.
Though the Constitution of Nepal has provisions against caste-based discrimination, the old, stereotyped caste system still prevails, ruining Nepal’s cultural and musical heritage, and destroying the beauty of our ethnic diversity. If we do not take caste-based discrimination seriously, this evil will fragment our society into various pieces like in Rwanda.
Germany pledges 100, 000 Euros to support communities affected by floods in Nepal
The Government of the Federal Republic of Germany has pledged an assistance of 100,000 Euros to support communities impacted by the devastating floods of September 2024 in Nepal.
Ambassador Dr. Thomas Prinz, the German Envoy to Nepal, on behalf of the Government of the Federal Republic of Germany, signed the grant agreement with One Heart Worldwide for a project titled “Emergency Response and Recovery Plan for Continuation of Maternal and NewbornHealth (MNH) Services in Flood-Affected Areas of Sarlahi, Rautahat and Kavrepalanchowk Districts,” that aims to provide vital healthcare services in the affected regions. Surya Bhatta, Co-CEO of One Heart Worldwide signed the agreement on behalf of the organization, reads a statement issued by the Embassy of Germany.
One Heart Worldwide is an organization dedicated to improving access to healthcare for mothers and newborns in remote areas of Nepal for over a decade. Through this project, One Heart Worldwide will focus on maintaining access to basic health services, ensuring water and sanitation facilities, and delivering emergency supplies to pregnant women, new mothers, and their families in the three most heavily affected districts from the recent floods and fire: Sarlahi, Rautahat, and Kavrepalanchowk.
Rautahat, one of Nepal’s poorest districts, is home to a significant Muslim and Dalit population, who have been disproportionately affected by recurring disasters. Frequent floods, fires, and cold waves have made survival increasingly difficult for vulnerable communities. The recent fires have affected 25 households, while 53 people are rendered homeless. Similarly, Sarlahi and Kavrepalanchowk were heavily affected during the recent floods caused by the incessant rains.
The project will provide affected individuals with Dignity Kits, Winterization Materials, Hygiene Kits, and Kitchen Utensils, as well as Health Facility Medical Equipment and Supplies, and establish WASH (Water, Sanitation, and Hygiene) stations at healthcare facilities. The cold season is expected to have a particularly severe impact on pregnant women, new mothers, and young children.
“This is an important project for districts heavily affected by the recent disasters. With the harsh winter, we are relieved thatthe most vulnerable populations are receiving the support they urgently need,” said Ambassador Dr. Thomas Prinz, according to the statement.
“We are pleased to have signed this agreement with the German Embassy. This grant will provide critical assistance to mothers and newborns in these vulnerable communities, ultimately supporting the Government of Nepal’s ongoing efforts,” shared Mr. Surya Bhatta.
The project is slated to complete by June 2025.
Nepal seeks Joshi’s release from Hamas captivity
The Ministry of Foreign Affairs has intensified diplomatic efforts to secure the release of Bipin Joshi, a young Nepali held captive by Hamas. Following reports that some hostages under Hamas control are being freed, Foreign Minister Arzu Rana has urged countries mediating with Hamas for a ceasefire to prioritize efforts for Joshi’s release.
As part of these efforts, Minister Rana held a telephone conversation this morning with Qatar’s Minister of State at the Ministry of Foreign Affairs, Mohammed bin Abdulaziz bin Saleh al-Khulaifi, who serves as Qatar’s chief negotiator and mediator in peace talks with Hamas.
During the call, Minister Rana emphasized Qatar’s pivotal role in facilitating ceasefire negotiations and appealed for special intervention to secure Joshi’s release. She highlighted Qatar’s long-standing friendship with Nepal and expressed hope that Qatar’s ongoing diplomatic engagement with Hamas would include efforts for Joshi’s safe return.
Minister al-Khulaifi informed Minister Rana that progress is being made in bringing Hamas and Israel to a ceasefire. He assured that Qatar is actively working to facilitate the release of hostages held by Hamas. Regarding Joshi, al-Khulaifi stated that Qatar would prioritize his case and expressed confidence that he would be freed, either in the initial phase of hostage releases or subsequent rounds.
Earlier, Minister Rana also sought assistance from the Egyptian government, which is similarly engaged in ceasefire negotiations with Hamas. Last week, she conveyed Nepal’s appeal through the ambassadors of Egypt and Qatar, urging both nations to intervene for Joshi’s release.
Additionally, Minister Rana had approached the Israeli government via Israeli Ambassador to Nepal, Shmulik Arie Bass. The ambassador informed her that Israel had received reports of Hamas planning to release 34 hostages, including the elderly, women, children and those with critical health conditions.
The crisis traces back to Oct 2023, when Hamas launched a surprise attack on Israeli soil, killing over 1,000 people, including 10 Nepalis, and taking hostages, including Joshi. Since then, the Nepal government has been pressing for his release through diplomatic channels. Minister Rana has raised the issue at various bilateral and multilateral forums, including the United Nations, urging the international community to assist in securing Joshi’s freedom.
Most banks keep rates unchanged
Most commercial banks in Nepal have kept their interest rates unchanged for the month of Magh (mid-Jan to mid-Feb). Of the 20 commercial banks in the country, 17 have maintained their interest rates on individual fixed deposits for the 10th month of fiscal year 2024-25, while two have lowered their rates, and one has raised.
Interest rates on deposits are not increasing as credit expansion by banks has been slow due to the prolonged economic slowdown. Because of excess liquidity in the banking system, the central bank mopped up Rs 40bn through a deposit auction on Sunday.
Laxmi Sunrise Bank is the only Class ‘A’ bank that has raised its interest rate for the new month. The bank, which offered 5.5 percent interest on individual fixed deposits in Poush (mid-Dec to mid-Jan), is now offering 5.75 percent in Magh.
Agricultural Development Bank Ltd (ADBL) and Nepal SBI Bank have lowered their interest rates on individual fixed deposits. ADBL, which offered 5.57 percent interest in Poush, is now offering 5.51 percent. It has kept the interest rate on institutional fixed deposits unchanged at 3.25 percent. Meanwhile, Nepal SBI Bank has decreased its rates by 0.5 percentage points for both individual and institutional deposits. Nepal SBI has fixed interest rates for individual and institutional fixed deposits at 5.5 percent and 4.5 percent, respectively, for Magh.
Citizens Bank International has raised its interest rate on institutional fixed deposits by 0.5 percentage points to 4.5 percent. The bank has kept the interest rate on individual fixed deposits unchanged at 5.65 percent.
NIC Asia Bank and NMB Bank are offering the highest interest rate of 6.6 percent on individual fixed deposits in Magh. The two banks are also offering the highest interest rate of 5.6 percent on institutional fixed deposits. Nepal SBI Bank is offering the lowest interest rate of 5.5 percent on individual fixed deposits. ADBL and Standard Chartered Bank are offering the lowest interest rate of 3.25 percent on institutional fixed deposits.
Nepal Bank Ltd, which has kept its interest rate on individual fixed deposits unchanged, has lowered interest rate on institutional fixed deposits by 0.55 percentage points to 4.15 percent.
Everest Bank Ltd, Global IME Bank Ltd, Himalayan Bank Ltd, Kumari Bank Ltd, Machhapuchchhre Bank Ltd, Nabil Bank Ltd, Nepal Investment Mega Bank Ltd, NIC Asia Bank, NMB Bank, Prabhu Bank Ltd, Prime Commercial Bank Ltd, Rastriya Banijya Bank Ltd, Sanima Bank Ltd, Siddhartha Bank Ltd and Standard Chartered have kept their deposit interest rates unchanged.
Ordinance opens door for Nepali IT companies to invest abroad
The government has paved the legal way for Nepali Information Technology (IT) companies to invest abroad by amending existing laws through an ordinance. An ordinance to amend some Nepal acts—one of the three ordinances that the government has recommended to the President to issue—enables Nepali IT companies to invest abroad, open their branch offices abroad and bring their earnings back to Nepal.
According to an official at the Ministry of Communications and Information Technology (MoCIT), interested companies must submit applications to the MoCIT to avail the facilities. “After studying the application and assessing the company’s capability, the central bank will provide foreign exchange facility to the company on the recommendation of the ministry,” the official said.
While the government is drawing flak for bypassing parliament to amend laws, industry people say the provisions introduced through the ordinance are crucial for the growth of Nepali IT industry. They say the government’s fresh moves align with the policies and programs that the government brought for the IT sector through its policies and programs for the fiscal year 2024/25. While recognizing IT as a crucial sector for economic transformation, the budget speech stated that the government aims to achieve IT exports worth Rs 3 trillion and create 500,000 direct jobs over the next decade.
Nepal exported $515m worth of software and IT services in 2002—a growth of 64.2 percent compared to the previous year, according to a study conducted by the IIDS. As many as 14,728 independent software developers, over 106 companies and more than 50,000 freelancers are involved in the IT service export industry, the report states.
Prime Minister KP Sharma Oli has said that the legal reforms brought through the ordinance will allow Nepali IT companies to invest abroad, open branch offices and legally repatriate their earnings home. “There were some legal hurdles in the IT sector, which the government has addressed through this ordinance,” Oli said in a social media post on Saturday. “We facilitate bringing IT earnings back to the country. We believe this will develop IT as a foreign currency-earning industry.”
Nepal-India IGC meeting makes overall review of bilateral trade, economic ties
The Nepal-India Inter-Governmental Committee (IGC) has made a detailed review of all areas of bilateral trade and economic relations. The IGC is a bilateral mechanism aimed at strengthening trade and business relations between the two countries.
The meeting of the IGC related to trade, transit and cooperation to control unauthorized trade was held in Kathmandu on January 10 and 11.
The agenda included review of transit treaty and trade treaty including electrification of Raxaul-Birgunj railway line, proposed amendments to existing agreements, coordination of norms and gradual development of trade infrastructure. The two sides also reviewed issues related to mutual market access, IPR and taxes.
In the meeting, the Indian side informed that Nepal's request for supply of 200,000 metric tonnes of wheat has been approved.
The Nepali side thanked the Indian side for its continued support in ensuring the supply of essential commodities to Nepal.
At the request of the Nepali side, the Indian side has agreed that in the case of cargo-in-transit in Kakarbhitta (Nepal)-Banglabandh (Bangladesh) via Phulbari (India) route, the maximum axle weight of 18.5 tonnes for two-axle vehicles and 28 tonnes for three-axle vehicles can also be applied in the case of Nepali vehicles as per the prevailing regulations of the Ministry of Road Transport and Highways.
Responding to the request of the Nepali side, the Indian side informed that Sal (Shorea robusta) seeds and squash have been included in India's plant quarantine order.
Requests for inclusion of Jatamsi-root extract, Fragrant Kokila Berry extract, Fragrant Rhizome extract and Timur Berry extract in the list of processed products have also been accepted.
At the request of the Indian side, the Nepali side said that it was positive to review the documents related to reclassification of products such as 'IPAQE 28' in its technical system.
The Indian side briefed about the problems seen in the export of milk to Nepal. The Nepali side has agreed to positively consider the Indian side's request for milk products, including mohi (whey), cheese, which are not produced in sufficient quantities in Nepal.
The meeting welcomed the bilateral initiatives aimed at strengthening uninterrupted inter-country connectivity between India and Nepal through construction of new integrated check posts and railway links, among others.
The two sides expressed their commitment to advance bilateral connectivity, reflecting the shared vision of prosperous bilateral trade.
The two sides have agreed to form a joint working group to discuss the online approval with Nepal and the South Asian Free Trade Area (SAFTA).
Secretary at the Ministry of Industry, Commerce and Supplies Govinda Bahadur Karki led the Nepali delegation to the meeting.
Similarly, the Indian delegation was led by Sunil Barthwal, Commerce Secretary at the Ministry of Commerce of India in the meeting attended by senior officials from the Embassy of India in Kathmandu and various ministries.
A joint secretary-level inter-governmental sub-committee (IGSC) meeting on trade, transit and cooperation to control unauthorized trade was held in Kathmandu from January 12 and 13, 2024.
Nepal and China speak highly of BRI
Nepal and China have reaffirmed their commitment to the Belt and Road Initiative (BRI), highlighting the framework agreement signed during Prime Minister KP Sharma Oli’s visit to China in December last year. This development has been described as a milestone in enhancing bilateral ties.
In a political document presented to the Central Committee of his party, CPN-UML, Oli emphasized the significance of the agreement for Nepal-China relations. While the ruling coalition’s Nepali Congress (NC) has remained silent on the matter, China has actively engaged with Nepal’s political leadership to implement the agreement. Both Nepal’s Ambassador to China, Krishna Prasad Oli, and Chinese Ambassador to Nepal, Chen Song, have expressed optimism about the initiative, using strikingly similar rhetoric on its potential benefits.
A new era of cooperation
Ambassador Oli noted that the framework agreement marks a turning point in bilateral cooperation under the BRI, nearly seven years after the initial memorandum of understanding. He stated that projects under the BRI would help transform Nepal from a landlocked to a land-linked nation. Citing examples, he mentioned plans to enhance the operational capacity of Bhairahawa and Pokhara international airports.
A centerpiece of this cooperation is the proposed cross-border railway between Nepal and China, part of the Trans-Himalayan Multi-Dimensional Connectivity Network. This ambitious project is envisioned to facilitate the flow of goods, people and services, further deepening Nepal-China ties.
Ambassador Oli dismissed concerns over a so-called ‘debt trap’ linked to Chinese financing, calling such claims baseless. In an interview with The Global Times, he underscored the BRI’s global success, noting its partnerships with over 150 countries in its decade-long history.
Progress on infrastructure
Feasibility studies for the cross-border railway are underway and expected to conclude by 2026. Upon completion, the project will enter the implementation phase. Additionally, efforts are being made to strengthen Nepal’s transmission grid lines, which are critical for enhancing regional connectivity.
Ambassador Oli also expressed Nepal’s support for China’s Global Development Initiative and Global Civilization Initiative, reflecting broader alignment with Beijing’s strategic priorities.
According to Chinese official media outlets, Ambassador has said that Nepal supports the initiatives launched by China which were not mentioned in the bilateral documents.
In a meeting with Yang Wanming, President of the Chinese People’s Association for Friendship with Foreign Countries, according to The Global Times, Oli stated that Nepal supports the Global Development initiative and Global Civilization initiative proposed by China.
China’s perspective
Chinese Ambassador Chen Song echoed the sentiments of deepening mutual trust and cooperation.
In an interview with The Global Times, he described the BRI framework agreement as a symbol of growing political and economic ties between the two nations.
According to Chen, the agreement will not only enhance bilateral relations but also contribute to regional stability and development by fostering collaboration between China and South Asian countries.
Chen highlighted the BRI’s role in strengthening people-to-people exchanges and cultural cooperation, particularly in the tourism sector, according to The Global Times.
Addressing debt-trap concerns
Ambassador Chen countered accusations of a ‘debt trap’, citing data from Nepal’s Public Debt Management Office. As of the 2023-24 fiscal year, Nepal’s external debt stood at Rs 1.25trn ($9.12bn). Of this, multilateral loans constituted 88.98 percent, while bilateral loans made up only 11.02 percent. Among bilateral creditors, Japan and India ranked first and second, with China accounting for a modest 2.82 percent of Nepal’s total external debt.
Chen criticized Western narratives about Chinese loans as attempts to discredit China’s partnerships with developing nations. He emphasized China’s commitment to offering low-interest loans, development assistance and investments tailored to Nepal’s needs.
Political dynamics
Domestically, the ruling UML has showcased the BRI framework agreement as a major achievement of Prime Minister Oli’s government. However, the NC has largely remained noncommittal, while the main opposition CPN (Maoist Center) has downplayed the agreement, seemingly to avoid crediting the Oli administration.
Meanwhile, China has intensified its engagement in Nepal, lobbying for further progress under the BRI framework. This proactive approach underscores Beijing’s strategic interest in Nepal as a critical partner in its broader Belt and Road vision.
Nepal-India JBF meeting stresses on expansion of bilateral trade
The second meeting of Nepal-India Joint Business Forum (JBF) has laid emphasis on expansion of bilateral trade and business.
The meeting aimed at further deepening the economic and business relations between the two countries concluded on Saturday.
On the occasion, Minister for Industry, Commerce and Supplies Damodar Bhandari said that India is Nepal's largest trading partner and both countries should take the decisions of the JBF meeting into implementation.
He also underscored on carrying out works for resolving the problems seen in the import and export between the two nations in an easier manner.
Ministry Secretary Govinda Bahadur Karki spoke of the need of practical implementation of the topics decided in the JBF meeting.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Chandra Prasad Dhakal said there is immense possibility in the economic sector between Nepal and India. He stressed on moving ahead through policy reforms and exploring practical solutions for addressing the problems seen in both trade and business sectors.
He called for removing the non-tariff barriers, facilitating in resolving the problems arising due to the certification process of the Bureau of Indian Standards (BIS) in export of Nepali goods, for air connectivity between Bhairahawa and Pokhara airports of Nepal with various Indian cities and for the smooth supply of explosives required for construction and development of hydroelectricity projects.
The FNCCI President also raised the topic of expanding Nepal's access to various Indian ports, including Mundra (Gujarat), Dhamara (Udisha) and Jawaharlal Nehru port (Mumbai).
The JBF meeting is a part of Nepal-India Commerce Secretary-level Meeting. In the meeting, the representatives of Nepal and India had discussed trade, investment, energy, tourism, agriculture, information technology and infrastructure development, among other topics.
An agreement was reached in the JBF meeting for the promotion of clean energy through collaboration in hydroelectricity and renewable energy, solar and wind projects, of tourism and connectivity, of easing the trans-border trade by strengthening the road, railway and air connectivity and of enhancing trade and cross-border investment, agriculture and medicinal plants, providing high-yielding seeds and technology by removing the quota for agricultural productions, of collaboration in research and commercialization of medicinal herbs and of cooperation in digital technology and startups.
The agreed upon topics of the meeting have been handed over to the Commerce Secretary of Nepal and India on Saturday itself.
JBF President Bhawani Rana and Santhil Kumar handed over the agreement to Commerce Secretary of India Sunil Barthwal and Nepal's Commerce Secretary Karki.
The Indian Commerce Secretary expressed the commitment to take the initiative for the implementation of the agendas raised in course of the JBF meeting.
Ambassador of India to Nepal, Naveen Srivastava said this meeting is important in terms of the economic issues between the two countries and that he would take initiatives for facilitating the topics raised in the JBF meeting.
JBF Nepal President Bhawani Rana reiterated that there is extensive possibility of investment and trade between Nepal and India, and there should be the required facilitation for taking benefit from this.
Similarly, from the Indian side N Sunil Kumar believed that there would be more convenience in the coming days, as the road, railway and air connectivity between Nepal and India is improving.
It is agreed that the JBF next meeting will be convened in New Delhi, India.
Constitutional changes still a far-fetched wish
It has been more than six months since Nepal’s two major political parties, the Nepali Congress (NC) and the CPN-UML, pledged to make amendments to the 2015 constitution. However, despite their promises, tangible progress remains elusive. A few weeks ago, they announced plans to form a two-party mechanism to address constitutional amendment issues. Yet, this initiative appears stalled, with little to no significant development.
Statements from Prime Minister and CPN-UML Chairperson KP Sharma Oli suggest that a constitutional amendment is not on the immediate horizon. In fact, it may not occur until after the 2027 national elections. Without giving away the specifics, Oli indicated that any potential amendment might only take place in 2030. Regarding the flaws in the constitution, he remarked, “There are some flaws in the constitution which need to be rectified, but it will take place only in 2030 because now we do not have the two-thirds majority required for it.”
The NC has remained notably silent about its position on constitutional amendments. There have been no substantial deliberations within the party, and it is unclear if there is any agreement between the NC and UML on key issues. Both parties appear to share an interest in reforming the current electoral system to ensure political stability, but dissenting voices from Madhesi and Janajati leaders within their ranks could complicate such efforts.
If the two major parties fail to take the initiative, constitutional amendments are unlikely to materialize. When the NC and UML announced their willingness to amend the constitution while forming the government in July last year, it prompted other parties to clarify their positions. The Rastriya Swatantra Party (RSP), which did not exist when the constitution was promulgated in 2015, has established a task force led by Chief Whip Santosh Pariyar to determine the party’s stance on constitutional issues. The RSP’s position on governance, federalism, and the electoral system remains ambiguous. The party’s decision not to field candidates for provincial assemblies in 2022 sparked speculation that it might oppose the federal structure. However, leaders like Pariyar have expressed support for federalism and related agendas.
Meanwhile, Madhes-based parties have begun consolidating their positions on constitutional amendments. These parties are working towards forming a loose alliance to present a unified stance. The first amendment to the constitution in 2016 addressed some of their demands, bringing an end to the Madhes Movement and lifting a four-month-long blockade imposed by India. However, the Madhes-based parties still advocate for further changes to fully address their grievances.
Constitutional amendment was also a key topic of discussion at the recently concluded Central Committee meeting of CPN (Maoist Center), the main opposition. The party has outlined three primary amendments: the introduction of a directly elected president, the adoption of a fully proportional electoral system, and ensuring 50 percent representation for women in state organs. Maoist Chairperson Pushpa Kamal Dahal has championed these radical reforms, which could reshape Nepal’s political landscape if implemented.
The fifth-largest party, the Rastriya Prajatantra Party (RPP), has also initiated internal discussions on constitutional amendments. The RPP’s agenda includes abolishing federalism, reinstating Nepal as a Hindu state, and reviving the monarchy. These proposals stand in stark contrast to the positions of most other parties and are unlikely to gain widespread support.
Despite these activities among smaller parties, the NC and UML’s lack of substantive discussion on constitutional amendments is striking. For instance, during a recent UML Central Committee meeting, there was no mention of the specific changes the party seeks to introduce. According to UML leaders, the party’s strategy is to prioritize constitutional amendments only after securing a majority in the House of Representatives.
The 2015 constitution is widely regarded as a product of compromise among four major political forces: the NC, UML, Maoists, and Madhes-based parties. While this consensus allowed for the constitution’s promulgation, it has also resulted in ambiguities and areas of contention that require resolution. The UML’s current stance appears to favor amendments tailored to its terms, further delaying the process due to the lack of cross-party consensus.
As Nepal approaches the 10th anniversary of the 2015 constitution, there has been no expert-led review of its implementation. A senior UML leader has emphasized that the government’s priority is to evaluate the constitution’s effectiveness before deciding on amendments. This cautious approach reflects broader hesitations within the NC, where internal dynamics and divergent views prevent the party from supporting UML’s amendment proposals wholeheartedly.
The road to constitutional amendment is fraught with challenges. Beyond the lack of political will among major parties, there are ideological divides that hinder consensus. For instance, the UML’s preference for amendments that align with its agenda clashes with the more inclusive demands of Madhes-based parties and Janajati leaders. Similarly, the Maoist party’s call for radical reforms faces resistance from parties advocating for minimal changes.
Furthermore, the failure to address constitutional issues risks deepening public disillusionment with Nepal’s political leadership. Many citizens view the 2015 constitution as a landmark achievement that needs refinement to better serve the nation’s evolving needs. The lack of progress undermines confidence in the political process and raises questions about the commitment of major parties to democratic principles and governance.
To move forward, Nepal’s political leadership must prioritize dialogue and consensus-building. A comprehensive review of the constitution’s implementation, involving legal experts, civil society, and diverse political voices, could provide a roadmap for amendments that address the nation’s pressing challenges.