Nepal Weekly - 2026-05-06
Nepal business, finance and trade news, every Wednesday.
Two Neighbors on One Pass
Prime Minister Balen Shah's government sent diplomatic notes to India and China last week objecting to the 2026 Kailash Mansarovar Yatra running through Lipulekh Pass, a high-altitude crossing at the Nepal-India-Tibet tri-junction that Kathmandu has claimed as its own under the 1816 Sugauli Treaty. India's response was quick: the External Affairs Ministry called the territorial claim "neither justified nor based on historical facts," and labelled it a "unilateral artificial enlargement." This is the second such protest in under a year; Kathmandu filed the first in August 2025 when India and China reopened border trade through the same pass.
Read more: Indiatoday IN (Nepal's demand), Indianexpress (negotiation precondition), The Tribune (Jaiswal), Economic Times (religious significance), Hindustan Times (pilgrim batch breakdown)
Bulldozers First and Questions Later
Shree Saraswati Basic School in Manohara had 275 students and 15 teachers when the bulldozers showed up without notice. Staff only realized the building was coming down when police started hauling out belongings; the CCTV cameras, router, and library books got buried, though the new textbooks made it out. On Monday, students turned up anyway, dragging desks and benches into a borrowed community hall in Madhyapur Thimi, where principal Indira Mahat is running multi-grade classes in two rooms and under courtyard tents. The Supreme Court has ordered the government to come up with documents showing how the required process was followed at Manohara and four other eviction sites. We’ll see if they have any.
Read more: The Kathmandu Post (1.2M landless), Online Khabar (school mergers), Khabarhub (Supreme Court, protests)
Six Thousand Rupees and a Prayer
More than 76,000 depositors have filed claims worth over Rs 45 billion ($296 million) against failed cooperatives, and the government's response is to point to a revolving fund that holds about 0.54 percent of total claims (Rs 250 million or ~$1.6 million). The Problematic Cooperative Management Committee has been able to claw back another Rs 350 million ($2.3 million) from debtors, but split between the 58,000 smaller savers, each person's share works out to only about Rs 6,000 ($39). Returning money to that group alone would take roughly Rs 6.66 billion ($43.8 million). Minister Pratibha Rawal says debtor names will be published and bank accounts frozen after a 35-day notice period. Committee Chairman Dilliram Acharya says the fund "will not be spent easily."
Read more: Ratopati
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Sixty Thousand Souls Hit the Exit
Around 2,075 Nepalis board flights for foreign jobs every day, and the Department of Foreign Employment counted 62,265 departures in the 31 (or 32? days - it’s not clear how they counted) between March 25 and April 26. A temporary stop on labor approvals for 12 Gulf and West Asian countries between March 1 and April 20 barely dented the numbers. The figures don't fully capture the whole picture. Workers like Dhan Bahadur Gurung, a 47-year-old who earned Rs 35,000 ($230) a month in Saudi Arabia, says he drank four or five energy drinks instead of water to push through the heat, and came home with kidneys that had given up. He now does dialysis three times a week, four hours at a time. Apparently his situation isn’t rare.
Read more: myRepublica (monthly departure headcounts), Online Khabar (kidney failure costs), The Kathmandu Post (SSF remittance share).
Ordnances Coming and Going
President Paudel signed a Constitutional Council ordinance on Tuesday after at first sending it back to cabinet. The amendment changes how the Constitutional Council operates and the details are thin, but the way it was has gone back and forth is an indication that something may be afoot. The same day, the Communications Ministry invoked the new "Special Provision Ordinance on the Removal of Public Officials from Office" to clear out 36 politically appointed office-holders in nine agencies, including the chairs of Gorkhapatra Sansthan, Press Council Nepal, the Nepal Telecommunications Authority, and the National Information Commission. Opposition lawmakers cried foul and said it was a bypass of parliament by a government that already holds close to a two-thirds majority and could legislate through the House if it wanted to.
Read more: The Rising Nepal (36 officials), The Annapurna Express (constitutional basis), The Himalayan Times (return-reissue sequence)
Holding Center On The Flood Plain
Ujyalo Nepal Party chairman Kulman Ghising visited the Kirtipur holding center last week and found 3,159 screened squatters crammed into tents on flood-prone government land, with kids missing school and families unable to service bank loans after losing jobs and businesses. One person has has already died by suicide. RSP wants the government to park the bulldozers everywhere except already-acquired state land until an empowered authority finishes a full report on the squatter problem.
Read more: myRepublica (RSP manifesto commitment), Ratopati (Ghising visit findings)
Widows Win Back Inheritance
The Supreme Court has struck down a provision that forced widows to surrender property inherited from a dead husband the moment that they remarried. A constitutional bench led by Acting Chief Justice Sapana Pradhan Malla ruled Section 214(2) of the 2017 Civil Code was an abridgment of constitutional guarantees of equality, dignified life, and property rights, all of which the old rule suspended at the altar. Under the scrapped sub-section, a remarried widow's first-husband property passed to his children, reverting to her only if there were none.
Read more: The Himalayan Times
Carrier Redraws South Asia
Nepal Airlines posted a route map on Wednesday showing all of Jammu & Kashmir and Ladakh as Pakistani territory, sending #BoycottNepalAirlines trending through Indian social media like a wildfire. The state-owned carrier deleted the post and apologized Thursday, calling it a "cartographic inaccuracy" that did not reflect the official position of either the airline or Nepal. An internal review is underway.
Read more: Newindianexpress (Sugauli Treaty), Republicworld (relations)
Rules for Thee, Not for State-Owned Me
Nine of 37 insurers remain are still below the Nepal Insurance Authority's minimum capital thresholds, three years after the April 2023 deadline. The laggards include two state-owned firms. The NIA has yet to set a new deadline.
Read more: myRepublica
Japan Dug It, China To Run It
The government signed a five-year operations and maintenance contract with Yusin-ART JV, a China-Nepal joint venture, to run the Japanese-financed Nagdhunga-Sisnekhola tunnel. The 2,688-meter bore is 98 percent complete, and needs about 150 staff to be fully trained before a full opening that’s expected (hoped for?) within three months. Construction on the tunnel started in October 2019 and initially had a 42-month timeline. Once it opens, the Sisnekhola-to-Balambhu trip will get reduced from 33 minutes uphill to about seven straight though.
Read more: The Kathmandu Post
Landslides Turn Highway Map Into Swiss Cheese
Pre-monsoon landslides have blocked sections of the Araniko, Mid-Hill, BP, and Kanti Lokpath highways in Lalitpur, Makwanpur, Lamjung, Kavre, and Ilam, as well as the Bhalubang-Pyuthan road. The Araniko Highway at Kodari, the main crossing into China, has been closed since April 29 and, as of yet, has no scheduled date to reopen. A handful of stretches, including Bhojpur and the Beni-Jomsom road in Myagdi, have been able to handle some one-way traffic. Police tell travelers to expect more of the same through the rainy season.
Read more: myRepublica (Araniko closure), The Annapurna Express (Ilam, BP Highway)
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