AGP Executive Report

Hydropower Reform: A high-level committee recommends cancelling licences of stalled hydropower projects even after PPAs, and pushing broader licensing reforms like moving from “first-come, first-served” to competitive bidding. Digital Remittances: Nepal and India’s cross-border UPI–NPI payment system is live, enabling real-time, low-cost transfers via select banks and gradually expanding to more users. Grid Upgrade: MCA-Nepal broke ground on the Ratmate Substation, New Damauli Substation and a 297km 400kV transmission line under the MCC compact to cut bottlenecks and boost reliability. NEPSE Watch: NEPSE inched up 2.57 points to close at 2,736.17 as turnover fell to Rs 4.29 billion. Power Connectivity: A 220kV switchyard at Rahughat corridor’s Tilkenichaur area came into operation, connecting 127.8MW to the national grid. Trade Revenue: Upper Mustang’s Korala-linked customs collected Rs 6.66 billion in eight months, driven largely by EV imports and other goods from China. Governance & Compliance: Asset declaration deadline was extended to mid-July, while the government scrapped civil servants’ trade union rights via an amendment. Policy Clarity on Mangoes: Nepal denied banning Indian mangoes, saying restrictions are technical phytosanitary measures and imports continue with compliance. Parliament Update: Opposition obstruction ended and HoR resumed, with MPs raising issues including trafficking, violence against women and foreign employment misdeeds. Business & Finance: Finance Minister Wagle rejected claims of budget information leaks and said rumours are part of a smear campaign.

Wildlife & Farm Relief: Farmers in Madhesh say wildlife damage is rising, but relief claims are hard to access due to paperwork and delays, leaving crops and stored harvests repeatedly destroyed. Budget Rumours Denied: Finance Minister Swarnim Wagle told the House Finance Committee there’s “no truth” in claims of leaked budget information and rejected allegations over tax and EV-related issues. Markets: NEPSE fell 1.54 points to 2,733.59; turnover hit Rs 1.56bn with SOPL among top gainers and CREST among top losers. Aviation & Tourism: Flydubai got approval for daily Pokhara–Dubai flights from Sept 23, a boost for Nepal’s third international gateway and tourism. Hospitality Investment: Marriott signed to bring JW Marriott to Kathmandu Valley (opening early 2031) and also plans additional premium hotels across Nepal and India. Inflation & Fuel Costs: Nepal’s inflation rose to 5.04% (mid-May) as petroleum price hikes feed into food and services. External Sector Strength: NRB reports forex reserves up to Rs 3.70tn and improved current account/BoP supported by remittances. Governance & Security: PM Balen inducted Home Minister Sudan Gurung and Science Minister Mahabir Pun; Gurung also said the 2001 Royal Palace massacre file will be reopened. Digital Infrastructure: Ncell’s Nakkhu data centre received ANSI/TIA-942-C Tier III design & constructed certification, reinforcing local hosting capacity. Labour Policy: Nepal’s Labour Minister announced a “Decade for Promoting Domestic Employment” at the ILO.

Remittances & Reserves: Nepal’s remittance inflows jumped 41.2% to Rs 1,916.90 billion in 10 months, while foreign exchange reserves also rose, with the current account and BoP posting big surpluses, strengthening external buffers. Trade & Inflation: The merchandise trade deficit widened 14.9% as imports outpaced exports, and inflation climbed to 5.04% in mid-May, led by food and transport/services. Budget Row: National Assembly lawmakers demanded a probe after allegations that tax rates were altered in the budget bill; Finance Ministry rejected the claims, saying changes were only corrections. Governance Reforms: The Communications Ministry said most 100-point governance reform programmes are completed and moving into implementation. Home Affairs Update: Reappointed Home Minister Sudhan Gurung took charge, announcing task forces and tighter vigilance on sensitive information. Energy & Industry: Nepal Electricity Authority reported Rs 50.01 billion in unpaid tariff dues; industrial areas issued a 7-day ultimatum for rent and dues. Cabinet also approved national forest land use for four hydropower projects, while construction began on the 180 MW Kaligandaki Gorge project. Domestic Product Push: Cabinet backed nationwide promotion of Dairy Development Corporation (DDC) products to boost farmers and local consumption. Digital Payments: India–Nepal UPI-NPI linkage went live for real-time cross-border P2P remittances via phone/VPA, starting with select banks. Market Watch: NEPSE slipped slightly (down 1.54 points) but turnover rose to Rs 6.44 billion. Labour Policy: Nepal announced the next decade as the “Domestic Employment Promotion Decade” at the ILO meeting.

KMC Street-Cleaning Drive: Kathmandu Metropolitan City has declared its area free of street dwellers and signed an agreement with Nepal Police, the District Administration Office and Manavsewa Ashram to manage “helpless” street residents through an integrated system. Cross-Border Remittance: Nepal and India have operationalised NPI–UPI linkages for P2P money transfers, letting Nepalis send up to INR 15,000/day and INR 100,000/month to India via about 10 banks, including Nabil and Global IME. Retail Finance Deal: Global IME Bank and Bhat-Bhateni launched a 0% installment credit card facility for purchases of NPR 15,000+ with flexible 3–18 month repayment. Public Finance Transfers: The government allocated Rs 424.27 billion for intergovernmental fiscal transfers to provinces and local levels for FY 2026/27, including Rs 109.65 billion to provinces and Rs 314.62 billion to 753 local governments. Innovation Funding: Finance Minister Swarnim Wagle announced Rs 4 billion for science, technology and innovation, with Rs 500 million earmarked for a Nepal Enterprise Facility to back startups and SMEs. Hydropower Court Ruling: The Supreme Court issued a six-point directive on the Phukot Karnali Hydropower Project, ordering revisions to protect local community interests and ensure legal compliance. IMF Support: The IMF completed the final review under Nepal’s ECF programme, approving about USD 42.9 million and citing progress on governance and financial reforms.

Markets: NEPSE slid again on Monday, down 20.27 points (0.73%) to 2,735.41, as turnover fell to Rs 4.08 billion and most sectors closed lower, with only finance ending green. Startups & Innovation: The government earmarked nearly Rs 4 billion for science, technology and innovation in FY 2026/27, with Rs 500 million to set up a Nepal Enterprise Facility for startups and SMEs. Energy & Utilities: The government is pushing NEA to speed up recovery of long-pending dues for dedicated feeder/trunk lines; arrears for 61 consumers now stand at Rs 26.95 billion. Insurance Regulation: Nepal Insurance Authority says it has 543 complaints under its jurisdiction (mid-May), with 394 pending from previous years, as claim-settlement delays keep drawing criticism. Trade & Customs: Rasuwagadhi Customs collected Rs 10.80 billion in about 11 months; imports through the point reached Rs 40.1 billion, while exports to China were about Rs 900 million. Macroeconomic Support: IMF completed its final ECF review for Nepal, approving about $42.9 million, while projecting 3% growth for FY 2025/26. Business Finance: Global IME Bank and Bhat-Bhateni launched a 0% EMI instant credit card facility for purchases from Rs 15,000, aiming to boost digital payments. Infrastructure: Nagdhunga–Sisnekhola tunnel operations are set to start from the second week of August, with 150 staff recruited for round-the-clock management.

Everest Rescue: Dawa Sherpa, 57, was found near Everest base camp after nearly a week missing, surviving without food, water or oxygen and now being treated for frostbite. Tourism & Hotels: Marriott International and CG Corp Global signed an agreement to develop and operate three luxury hotels in Kathmandu and Siliguri, aiming to boost South Asia’s high-end tourism. Nepal–India Finance: Nabil Bank launched instant Nepal–India cross-border remittances via its nBank app, with daily and monthly transfer limits for faster P2P money movement. Startups & Funding: Nepal’s subsidised startup loan scheme has disbursed about Rs 1.88 billion to nearly 1,500 entrepreneurs over three years, but founders say most startups still fail quickly and delays remain a problem. Digital Payments & Innovation: The second IN-SPAN cohort began in India with 25 Nepali startups selected for an eight-week, fully-funded deep-tech and innovation programme. Energy & Inflation Debate (India): India hiked domestic LPG by ₹29 per cylinder amid global price pressure, while the government says Indian households still pay among the world’s lowest rates after subsidy. Health System Pressure: A report highlights Nepal’s doctor shortage and low health budget share, arguing rural areas face the worst access gaps. Youth & Jobs: Coverage also points to youth frustration and unemployment pressures shaping political protests and public anger across the region. Climate & Risk: Nepal’s changing Himalayan disaster patterns are linked to climate change, with more dangerous glacier-related outburst risks emerging beyond classic lake bursts. Himalayan Climate Action: BLACKYAK hosted the Himalayan Climate Charter 2026 Namche Summit to push solidarity and practical climate action for mountain ecosystems.

Nepal–India Digital Finance: Nepal and India launched direct cross-border cash transfers by linking India’s UPI with Nepal’s National Payments Interface, enabling bank-to-bank remittances and easing payments for Nepalis in India. Border Diplomacy: Foreign Minister Shishir Khanal reiterated Nepal will resolve India border disputes bilaterally, not via third-party mediation, while clarifying the UK mention was only for access to historical archives. Language AI & Digital Public Infrastructure: India’s Digital India Bhashini and Kathmandu University signed an MoU to co-create a “Voice First” multilingual language translation platform for Nepal. EV Readiness: Nepal’s MoID report says the country needs at least 10,000 charging stations by 2030 to hit its EV target. Hospitality Investment: Marriott and CG Hospitality will develop two ultra-luxury hotels in Kathmandu (Ritz-Carlton and Westin), targeting openings by 2031. Household Energy Politics: India defended a domestic LPG price hike of Rs 29 per cylinder, arguing Indian cooking gas remains among the world’s cheapest despite global shocks. Elder Care Gap: A study in Upper Mustang found rising loneliness and healthcare gaps among seniors, urging stronger community-based elderly care.

Nepal-India Diplomacy: Foreign Minister Shishir Khanal told reporters in New Delhi that Nepal is ready to resolve the border row through diplomacy and an “open-heart” approach, stressing a “calm, data-driven” path focused on Nepal’s economic transformation. Cross-Border Payments & Digital Cooperation: Khanal and India’s EAM S Jaishankar launched UPI–NPI peer-to-peer links for cross-border remittances and witnessed an MoU between Digital India BHASHINI and Kathmandu University to build a voice-first multilingual language translation platform. LPG Cost Shielding (India, with regional impact): India raised domestic LPG by Rs 29 to Rs 942 per 14.2-kg cylinder, but the government says supply cost is over Rs 1,600 and under-recovery (~Rs 700) is absorbed via subsidies—keeping Indian household prices among the lowest globally, including versus Nepal. Urban Transport Push: Infrastructure expert Surya Acharya renewed calls for a high-capacity Metro Rail in Kathmandu Valley, arguing road conditions and density make it unavoidable for long-term growth. Public Health & Food Safety: Health Minister Nisha Mehta marked World Food Safety Day, saying Nepal will strengthen food hygiene enforcement, testing labs, and risk-based market monitoring to cut foodborne disease burdens. Energy Utility Recovery: NEA revived an administrative review committee to assess long-running dedicated feeder and trunk line electricity dues owed by industrialists. Business/Finance Watch: Nepal Rastra Bank set Sunday forex rates with USD selling at Rs 152.22.

India-Nepal Diplomacy: Nepal FM Shisir Khanal met EAM S. Jaishankar in New Delhi, with both sides reviewing bilateral ties and pushing a “decisive shift” toward deeper cooperation; talks also covered trade, investment, connectivity, energy and people-to-people links. Cross-Border Payments: India virtually handed over 72 health facilities and 12 cultural heritage projects under the 2015 earthquake reconstruction programme, while launching UPI–NPI linkage to ease cross-border remittances. Regional Cooperation: PM Balendra Shah marked BIMSTEC’s 29th anniversary, calling it a dynamic platform and urging better transport, trade and digital connectivity plus youth and tourism opportunities. Nepse Watch: Nepal Stock Exchange slipped 0.96% last week to 2,755.41 as post-budget momentum faded; market cap fell about Rs 45 billion and turnover cooled. Gold & Precious Metals: Gold jumped Rs 18,400 per tola to Rs 309,000 after customs duty changes and Middle East tensions; silver rose Rs 190 to Rs 5,230. Social Security Fund: SSF collected Rs 111.07 billion and plans bigger investments in hydropower, transmission and solar/renewables. Everest Survival (Business/Travel Angle): A Sherpa guide presumed dead was found alive after six days on Everest, surviving without food or oxygen—another reminder of the risks behind Nepal’s high-value mountaineering economy. Uber Enters Nepal: Uber debuted in Nepal with Uber Go/Comfort and Uber Bike, citing 2,000+ driver sign-ups and tourism-driven demand. Internal Governance: RSP advanced district leadership elections in 38 districts as part of its restructuring ahead of a national convention.

Climate & Environment: Agriculture Minister Gita Chaudhary urged “nature-friendly development” on World Environment Day, saying Nepal must pair prosperity with climate-resilient infrastructure and wider access to climate finance. Road Safety Reform: Nepal’s long-stalled Road Safety Act and National Road Safety Action Plan has been stuck for eight years, with the process reset after Parliament dissolution. Health & Medicines: Health Minister Nisha Mehta ordered tighter monitoring to fix medicine shortages, speed approvals, and strengthen quality testing for free and health-insurance medicines. Public Health: TB deaths remain high—53 per 100,000—while the government plans to expand TB-free campaign coverage to 256 local levels next fiscal year. Politics & Accountability: An inquiry panel cleared former Home Minister Sudan Gurung of corruption allegations, paving the way for a possible return. Transport & Trade Infrastructure: Speaker Aryal and NA Chair Dahal inspected a proposed dry port site in Kanchanpur, alongside talks on upgrading Mahendranagar Airport. Urban Mobility & Business: Uber officially launched in Nepal with Uber Go/Comfort and Uber Bike, partnering with Taximandu and eyeing expansion beyond ride-hailing. Agri-Prices: Nepal Layers Poultry Farmers Association raised egg farm-gate support prices, pushing retail prices to around Rs 25 per egg. Nepal-India Diplomacy: Foreign Minister Shisir Khanal met India’s NSA Ajit Doval as part of talks covering trade, connectivity and bilateral cooperation.

EV Probe: Nepal forms a joint committee to investigate the seizure of 779 electric vehicles over suspected revenue evasion, with rapid on-site checks underway by Finance, Customs, Nepal Police and APF. Markets: NEPSE fell 11.37 points to 2,755.41 on Friday; 351 companies traded Rs 1.57 billion. Aviation & Trade Links: Himalaya Airlines launched direct Kathmandu–Shenzhen–Kathmandu scheduled flights, creating a new air corridor to China’s tech and finance hub. Digital Economy: Uber officially launches in Nepal after trials, joining Pathao, InDrive and Yango in the ride-hailing race. Cyber & Consumer Risk: FIFA World Cup “free streaming” scams are draining money from Nepalis via fake apps and phishing links. Diplomacy: Foreign Minister Shisir Khanal begins a three-day official visit to India to discuss trade, investment, connectivity and energy. Climate & Resilience: World Environment Day events highlight nature-friendly development and community resilience as Nepal pushes for climate finance and preparedness. Tourism & Services: Setopati’s Nepal Fintech Conclave 2026 kicks off in Kathmandu, while spa industry groups push standards to support wellness tourism. Energy Projects: Government clarifies Budhigandaki hydropower will move as a multi-purpose model with irrigation, water, fisheries and ecotourism. Sports: SAFF Women’s Championship summit clash looms as India take on Bangladesh aiming for a record sixth title. Everest Update: Everest Sherpa Dawa Sherpa, presumed dead, is found alive and recovering, but his family demands a probe into rescue delays.

Climate & Nature Policy: Environment Minister Gita Chaudhary said Nepal must pursue “climate and nature-friendly development,” pushing climate-resilient infrastructure and faster access to climate finance as the country faces worsening floods, droughts and glacier melt. Nepal–India Diplomacy: Foreign Minister Shishir Khanal has departed for New Delhi for talks with EAM S. Jaishankar on trade, investment, connectivity and energy cooperation, as Nepal’s border issues stay in focus. Hydropower Reform Push: The government announced policy reforms to restructure the Electricity Authority and open PPA and electricity trading to the private sector, but private producers warn about unclear “take or pay” and PPA rules. Power Sector Targets: Ippan’s Ganesh Karki said the 30,000 MW goal is impossible without private participation and urged faster PPA processing. Election System Overhaul: The Election Commission has proposed constitutional changes to restructure itself, including reducing commissioners and setting election dates by the commission. Education Accountability: Nepal recovered Rs 104.6 million from TU professors over study leave misuse, with more recoveries still underway. Uber Enters Nepal: Uber launched official services with Uber Go/Comfort and Uber Bike, betting on Nepal’s digital mobility and tourism growth. Everest Survival Story: Sherpa guide Dawa Sherpa was found alive after six days missing, crawling back to base camp and now receiving treatment.

RPP Split: Nepal’s royalist Rastriya Prajatantra Party formally split as senior leader Dhawal Shumsher Rana quit and said a new monarchist-nationalist force will be formed, reshaping the royalist camp. Everest Survival: A Sherpa guide, Hillary Dawa Sherpa, was found alive on Mount Everest after six days missing, crawling down near the Khumbu Icefall and flown to HAMS Hospital with frostbite treatment. NEA Hydropower Deal: The Nepal Electricity Authority reconstituted committees to negotiate Khimti Hydropower Project share transfer and settle disputes on tariffs, fines and management issues. EV Tax Debate: Finance Minister Swarnim Wagle said EV prices under Rs 5 million have fallen after the government shifted passenger EV taxes to a price-based system, drawing public criticism. Smart License Printing: Smart driving licenses are nearing completion; about 1.57 million cards have been printed, with remaining work expected in 2–3 weeks. Nepse Slide: NEPSE fell 13.46 points to close at 2,766.78 as turnover dropped to about Rs 4.70 billion. Nepal-India Diplomacy: Foreign Minister Shisir Khanal will visit India June 5–7 for talks with Jaishankar on trade, investment, connectivity and energy, amid renewed border-related political tension. Tourism Boost: Indian tourist arrivals in May hit a record via air, with 40,782 visitors, lifting optimism for hotels and travel businesses. Nagdhunga Tunnel Funding: Japan signed an additional JPY 5.7 billion loan for the Nagdhunga Tunnel, with the project nearing completion and expected to open to the public in July 2026.

Everest Rescue: A Sherpa guide, Dawa Sherpa, was found alive crawling near the Khumbu Icefall and rushed to Kathmandu for treatment after being missing since May 29, highlighting both the risks of the season and the growing role of organized rescue and cleanup teams. Everest Record Season: Nepalese officials say more than 1,000 climbers reached Everest’s summit this May, the busiest season on record, with verification still pending and reports of deaths and a missing guide. Cross-Border Trade: Nepal raised the duty-free customs exemption for land-route travelers from Rs 100 to Rs 500, aiming to ease pressure on low-income border households while keeping rules for commercial imports. Parliament Rules & Accountability: The House of Representatives passed new rules of procedure that expand the Speaker’s role in constitutional amendments and set tighter timelines for impeachment motions, while critics warn some provisions may shield lawmakers. Constitutional Appointments Stalled: The Constitutional Council remains inactive despite an ordinance easing quorum, leaving key posts vacant and commissions operating under acting leadership. Infrastructure Finance: Japan approved an additional JPY 5.7 billion (about Rs 5.5 billion) loan for the Nagdhunga Tunnel, with the project nearing completion and expected to open to the public from July 2026. Capital Markets: NEPSE inched up 2.66 points to close at 2,780.25, with insurance stocks leading gains and turnover rising. Digital Payments Abroad: India and Cambodia launched UPI QR interoperability, letting Indian travelers pay at millions of KHQR-enabled merchants in Cambodia. Vehicle Registration: Bagmati Province resumed public vehicle registration after a brief suspension, easing pressure on transport businesses and buyers.

Markets & Finance: NEPSE inched up 2.66 points to close at 2,780.25 as daily turnover rose to Rs 5.73 billion; insurance stocks led gains while “others” dragged. Digital Payments Oversight: NRB tightened rules for digital payment investors and PSPs, requiring detailed disclosures when stakes or capital gains cross set thresholds. Budget Debate: The Finance Bill was revised multiple times within days, drawing scrutiny over procedure and transparency; stakeholders also questioned whether the FY 2026/27 budget’s priorities and delivery add up. Private Sector Signals: FNCSI said the budget boosted private-sector confidence, while CNI welcomed industrial and customs reforms—urging effective implementation. Energy & Transport: JICA signed an additional JPY 5.7bn loan for the Nagdhunga Tunnel; meanwhile, critics say the budget lacks a clear roadmap for public electric buses due to idle charging infrastructure. Health Supply Shock: Acute shortages of platinum-based chemotherapy drugs like carboplatin are disrupting cancer treatment nationwide. Nepal-India Diplomacy: National Assembly lawmakers pushed for resolving border issues through diplomatic channels, as Parliament proceedings were adjourned amid protests over PM Balen’s remarks. Cross-border Payments: NPCI International and ACLEDA Bank launched UPI QR acceptance in Cambodia, with plans to expand the corridor.

Monetary Policy Watch: Nepal Rastra Bank says its Standing Deposit Facility (SDF) is working to curb excess liquidity and stabilize the interest-rate corridor floor, after criticism over liquidity management. Budget Debate: Finance Minister Swarnim Wagle defended the FY 2026/27 budget size at Rs 2.124 trillion (about 28.5% of GDP), while experts question the revenue assumptions and fiscal math. Foreign Aid & Infrastructure: Japan (via JICA) added a JPY 5.7 billion loan to the Nagdhunga Tunnel project, now ~99% complete and targeted for public opening in July 2026. Energy Pipeline: The 216 MW UT-1 hydropower project moved into the final pre-generation stage after installing the first of three weir gates, aiming to boost power supply for Kathmandu and beyond. Capital Markets & Startups: NIMB Ace Capital and Momo VC signed an MoU to launch a Nepal-focused USD 30m PE/VC investment fund. Tourism Growth: Nepal welcomed 102,626 foreign visitors in May, up 19% year-on-year, with India the biggest source market. Nepal-India Connectivity: Himalaya Airlines plans direct Kathmandu–Shenzhen flights from June 4, strengthening business and tourism links. Governance & Compliance: Property Inquiry Commission says it has received 1,000+ daily property declarations and opened complaints from senior officials.