Nepal Weekly - 2026-07-01

Jul 01, 2026

Nepal business, finance and trade news, every Wednesday.

mountain covered with snow under cloudy sky — Photo by Sylwia Bartyzel on Unsplash

Half a Million Passports Have Nowhere to Go

Fewer than 45,000 passport booklets remain in the Department of Passports vault, with applications running at five to six thousand per day. The government cannot agree on what to do with the 550,000 booklets already sitting in the vault, supplied by German firms Veridos GmbH and Muehlbauer ID Service GmbH and now untouchable because of an ongoing corruption case. The CIAA filed charges against passport department officials and the German companies' local representatives within a week of finishing its investigation, an unusually quick turn for a procurement case this size, and critics are asking whether the PM's Office, which pushed the probe and has been issuing verbal instructions to department officials to cancel the contract, had a hand in the rush. Germany summoned Nepal's acting ambassador in Berlin to complain that the charges rest on assumptions rather than evidence, and warned that cancellation could expose Kathmandu to compensation claims. IDEMIA, the French company that has supplied Nepal's passports since 2010, is preparing to exit within days.

Read more: Ratopati (PMO vs Foreign Ministry), The Kathmandu Post (German diplomatic pressure), Nepal News ($10.13B contract), The Kathmandu Post (July 19 deadline), The Himalayan Times (IDEMIA vs Veridos bid)

Food Paste for the Taking

A government survey of more than a million children aged six months to five years, carried out over three weeks in May, found wasting rates of 12.3% in Madhesh Province, well above the WHO's 10% threshold for "high" and the worst figure in the country. Nationally, 7.8% of children are wasting and 17.4% are underweight. The numbers were shared a little more than a year after USAID's closure shuttered a $72 million, five-year Helen Keller International program that was meant to cover almost 9 million people. The government still stocks Ready-to-Use Therapeutic Food, the high-calorie paste used to treat acute malnutrition. What stopped was the community outreach, with health workers going door to door, identifying children, and getting families into clinics. Helen Keller has since pulled together almost $5 million from other donors, which is enough money to reach 223,000 people over nine districts.

Takes the Bells It Didn't Ring For

After months of inter-agency deadlock, Nepal has agreed to accept six Bell helicopters from Washington under a Rs 15 billion ($100 million) Foreign Military Financing grant, even though the Army has spent considerable effort lobbying for something else. The Prime Minister's Office, Foreign Ministry, Defence Ministry, and Army Headquarters had put forward a counter-proposal in late April asking for aerial cranes and heavy-lift helicopters capable of slinging steel beams, concrete, and HVAC units to remote construction sites instead. The Finance Ministry declined to rule on the substitution, saying in-kind aid was Defence's call, and the ministers traded the matter back and forth until Finance effectively forced Defence's hand. Army chief Ashok Sigdel brokered a compromise after US officials repeatedly raised the issue with both the Army and the defence ministry. The final agreement came only after certain "national security-related" terms were stripped from the US proposal.

FIFA Gives Nepal a Red Card

FIFA suspended ANFA indefinitely on June 24, stripping Nepal's national and club teams of all international competition rights after the National Sports Council spent months doing the one thing FIFA explicitly forbids. It ran a football federation by government decree. The NSC suspended ANFA's executive committee on March 25, blocked its elections, and kept officials from traveling to the AFC Congress, the FIFA Congress in Vancouver, and the FIFA World Cup opener in Mexico on June 11. FIFA flew delegates to eastern Nepal in March to watch an election that never happened, extended flexibility it rarely offers anyone, and sent warnings for months. By Thursday afternoon, ANFA's Satdobato offices were empty, security guards stringing rope across an entrance where the main gate had been removed for renovation.

Read more: The Himalayan Times (reinstatement conditions), The Kathmandu Post (FIFA member rights lost), myRepublica (NSC response)

Delhi Finds the Wires Full

Nepal and Bangladesh agreed last November to add 20 MW to the 40 MW already flowing between them via Indian transmission lines, with a June 15 start date that came and went. India's Central Electricity Authority told the Nepal Electricity Authority that only 30-40 MW of spare capacity exists on the link, and that squeezing in another 20 MW would leave 15-20 MW of buffer on a line already carrying roughly 3,000 MW of Indian power to Bangladesh. NEA spokesperson Rajan Dhakal says the export isn't technically impossible, but risky enough that India wants the matter kicked to a secretary-level meeting of the Joint Steering Committee.

Tokyo Dreams Lead to Tokyo Graves

Sixty-seven Nepali citizens died in Japan in the ten months between mid-July 2025 and June 1, 2026, including 25 suicides. Most were student-visa holders moonlighting in construction, Nepal-run restaurants and hotels, and supply companies. Japan caps their working hours at 28 per week, which NRNA Japan secretary Sachin Acharya is not enough time to earn enough to cover rent, food, and tuition. Repatriating a body costs around Rs 1.2 million ($7,900), and the Foreign Employment Board won't cover it because student-visa workers are not registered through formal labour channels. In some cases, the embassy isn't even told after cremation. Nepal is now the second-largest source of foreign students in Japan (behind China), with about 116,000 there by 2025. Around 6,000 Nepal-run hotels and restaurants are thought to be running in Japan.

Wagle Pulls the Plug on the Power Tax

Finance Minister Swarnim Wagle backed off a proposed 5% VAT on electricity on Thursday, telling the House of Representatives the government would lift the 50-unit monthly threshold before any levy kicked in, sparing ~95% of consumers. Taxing clean power, he said, would also contradict Nepal's commitment to the UNFCCC to reach net-zero by 2045. The House has since passed both the Finance Bill and the Public Debt Bill ahead of the 2026/27 budget. Wagle defended the push as overdue formalization of an electricity sector that has absorbed hundreds of billions of rupees in investment, while reminding lawmakers that previous governments ducked the call because it was unpopular.

Read more: Spotlight Nepal (VAT withdrawal), Nepal News (Public Debt Bill)

Eight Days to Spend a Mountain

The government has spent 35% of its Rs 407.88 billion ($2.68 billion) capital budget with eight working days left before payment authority expires on July 9. Reaching even the revised annual target of 61.63% now means burning through Rs 13.52 billion ($89 million) a day; the original target would require an impossible Rs 33.08 billion ($218 million) daily. Revenue is running at its own pace - collections are Rs 1.112 trillion ($7.3 billion), or 75% of target, with a Rs 367.5 billion ($2.42 billion) gap still to close.

Read more: Nepal News (capital spending deadline), The Himalayan Times (revenue breakdown)

One Percent, One Bad Day

A 1% transfer tax on share purchases tucked into the draft Company Act 2026 spooked the market before anyone had time to read the fine print. NEPSE, already six days into a losing streak, fell another 16.54 points on June 29 as 240 companies declined and daily turnover dropped to Rs 2.67 billion ($17.6 million) from Rs 3.94 billion ($25.9 million) in the previous session. The provision was yanked the same afternoon, but the damage had already been done.

Read more: Nepal News (draft Act provisions), myRepublica (sector-level declines)

Monsoon, Bird Flu, and Dead Pigs Arrive on Schedule

The monsoon is barely two weeks old and already 570,000 birds have been culled in 11 districts, and 250 pigs have died of African swine fever in Gorkha. Bird flu, tracked last week to the Central Zoo, has now been confirmed at 82 spots, with the Department of Livestock Services blaming crows as the primary vector. Infected birds can carry H5N1 for up to 21 days and often die in unknown locations, making containment a losing game. Within the Kathmandu Valley, Kirtipur and Kageshwori Manohara are the last municipalities where the outbreak is still active. On the roads, the Besisahar-Chame highway is currently going dark from 6 pm to 6 am daily under a two-week closure order.

Read more: myRepublica (at-risk projections), Online Khabar (culling scale), Online Khabar (farm-level losses), Khabarhub (standby equipment), The Annapurna Express (night closure terms)

The Party of Fresh Starts Can't Start on Time

Rabi Lamichhane's Rastriya Swatantra Party wrapped its first national convention last week having accomplished most of what it set out to do, and a fair bit it didn't. Lamichhane was re-elected president unopposed. What was billed as a three-day convention in Bharatpur ran six days, procedural confusion and rising accommodation costs drove delegates home early, and by the time Friday's office-bearer voting concluded only 1,289 of the more than 4,000 registered delegates were still in the room.

Read more: The Kathmandu Post (Wagle, social democracy), myRepublica (Lamichhane), Ratopati (oath ceremony)

Airbell's Bill Comes Due

The Department of Money Laundering Investigation has suspended Ajeya Raj Sumargi's passport and reopened a probe into $118.4 million that flowed into Nepal by 2017 through Airbell Services, a Cyprus-registered company, and Zhodar Investments out of the British Virgin Islands. DoMLI opened its detailed investigation in 2018, Nepal Rastra Bank flagged Rs 3.5 billion ($23 million) as suspicious and froze deposits at several commercial banks, and Sumargi withdrew the funds anyway after 2018. Investigators also said that he had pulled out another Rs 8.5 billion ($56 million) that came into Nepal before 2017. The 2019 "Nepal Leaks" investigation by CIJ Nepal and the ICIJ had already named him as an Airbell investor, tracing the company to Magnum House in Cyprus.

Editor Gets Four Months for Crossing the Colonels

Kathmandu District Court sentenced Saroj Mishra, then-editor of Rajdhani Daily, to four months in prison because of a 2023 article headlined "High handedness of three Colonels of Nepali Army." Judge Atmadev Joshi also told Mishra and the paper to pay Rs 250,000 ($1,645) in compensation to complainant Shova Karki, in addition to a Rs 1,000 ($7) fine.

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