Nepal Weekly - 2026-07-22

Jul 22, 2026

Nepal business, finance and trade news, every Wednesday.

man wearing black coat — Photo by Aaron Santelices on Unsplash

PM Scraps Tax via Facebook

The 3% equity fee on private education and health services lasted three weeks. Finance Minister Swarnim Wagle wrote it into the budget for fiscal year 2026/27, effective Shrawan 1, to fund nutrition programs for Dalit and marginalized children, expand health insurance and improve public schools. Private school, college and hospital operators started protesting as soon as the budget was announce, so on July 21, the PM announced on Facebook that the fee would not be implemented "for now," offering instead a 10% quota of free beds at private hospitals and 10% scholarship seats at private colleges for disadvantaged groups. Wagle says the suspension will needs Cabinet endorsement to take legal effect, since the fee was introduced under Section 18 of the Financial Act. Gen-Z movement leader Rabi Kiran Hamal welcomed the reversal but said that tax policy "cannot be amended through social media announcements," and asked why a major policy call came from the PM's personal Facebook rather than from the Finance Ministry.

Nepal Posts Steepest Peace Score Drop

Nepal fell 26 places to 111th out of 163 countries in the 2026 Global Peace Index, the largest single-year deterioration of any nation, a 9.1 percent collapse the Institute for Economics and Peace says is exceptionally rare. Almost every other situation resulting in a plunge like this involves a civil war, coup or insurgency. The index connects most of the damage to last September's Gen Z unrest, when security forces killed at least 76 people, including police personnel, injured more than 2,000, and saw parliament burned to the ground. Balendra Shah, the rapper-turned-engineer who took office in March as the country's youngest prime minister on the back of that uprising, is now watching the same generation turn on him. Protesters have massed in Kathmandu over riverside evictions, police conduct, and the self-immolation of 25-year-old ride-share driver Ganesh Nepali, who set himself on fire after a dispute with traffic police over a fine he couldn’t afford. Some demonstrators are now demanding Shah's resignation.

Read more: The Kathmandu Post (conflict indicators breakdown)

Case Clearance Falls as Courts Rebuild from Arson

The Supreme Court settled less than a third of its caseload in fiscal 2025-26, down from 42% the year before, as the judiciary tries to function without the benefit of 936,000 case files that were burned during the September protests. Twenty-three court premises were damaged (ten were destroyed outright). Hearings were effectively frozen for nearly four months after central servers went down, an outage severe enough to stall courts that didn’t suffer directly from the arson, including the Patan High Court. In Gandaki, recovery teams been able to retreive 3,307 of the 6,126 documents lost, mostly by asking district attorneys and litigants for their copies.

Read more: The Kathmandu Post (economic loss), myRepublica (court breakdown)

Court Punts Ncell Deal to Regulator

The Supreme Court dismissed a writ seeking to void Ncell's 80 percent share transfer, but stopped short of blessing the deal as it gave the Nepal Telecommunications Authority a task of finishing a job that politicians and bureaucrats have dodged for nearly three years. The verdict, published this week, points the Authority to Section 47 of the Telecommunications Act, which lets it fine license violations rather than unwinding them. If Ncell pays a fine and submits the documents the Authority says are still missing, the transaction will get formally recognized. No fine amount has been set, and no timeline was given.

Usury Becomes a Serious Economic Crime

The Home Minister’s team agreed to classify usury as a serious economic crime, invalidate fraudulent loan documents, and draft a special law within three months, with a tribunal formed to hear cases. The deal comes after weeks of talks after victims marched from Janakpur, and covers forged promissory notes, coerced cheques, and land transfers signed under duress, as well as compensation and a path to get seized property returned to the rightful owners.

Read more: The Kathmandu Post (task force timeline), The Kathmandu Post (district recovery statistics)

Foreign Tuition Blows Out Service Trade Balance

The service trade balance flipped from a Rs 9.85 billion ($65 million) surplus in FY 2015-16 to a Rs 90.94 billion ($598 million) deficit in FY 2024-25, mostly because of foreign tuition costs. Nepalis spent Rs 138.48 billion ($911 million) on education abroad last year, at a rising clip of about 18 percent yearly over the past three years. IT services, the sector that was expected (was hoped?) to close the gap, brought in Rs 22.33 billion ($147 million), or 9.36 percent of total service exports.

Rapeseed Rides Reopened Rail to Biratnagar

A CONCOR freight train pulled into Biratnagar's customs yard on Tuesday carrying 1,070 tons of Australian rapeseed in 40 containers, the first third-country cargo to clear Nepal's customs point since June 2023. The shipment travelled a route that barely existed on paper until November 2025, when India's customs board changed their tracking rules to allow rail cargo from Kolkata, Haldia and Visakhapatnam to run to Biratnagar instead of getting stopped at Birgunj. Nepal finalized its part of the arrangements in February. The Morang Trade Organization claims that the resulting freight savings will be up to 40% when compared to road transport costs.

Read more: Daily Sun (Nautanwa route), Spotlight Nepal (Sharada)

Lumbini's Hotel Boom Waits for a Runway

Rupandehi built for a boom that never came as investors sunk Rs 100 billion ($658 million) into roughly 2,100 hotels around Lumbini since the airport there started construction in early 2015. The region is now home to 13 star-rated properties, three of them five-star (Hyatt Palace in Butwal, Tiger Palace in Bhairahawa, and Siddhartha Vilasa), in addition to 10 four-stars built on the promise of direct international flights to Buddha's birthplace. Eleven years later, and the airport still isn't pulling the international traffic investors were promised, leaving roughly 300 large tourist hotels, 700 mid-sized properties, and 1,000 small hotels, farm stays and restaurants competing for a fraction of the visitors the plans assumed.

Japan's Tunnel Opens But China's Road Stalls

Kathmandu's first road tunnel got its public debut on Saturday, a "Fun Run and Walk" through the Nagdhunga-Sisnekhola bore ahead of trial operations on July 27. Tolls are now set at Rs 65 ($0.43) inbound for cars and Rs 260 ($1.71) for buses and heavy trucks. Motorcycles and pedestrians are barred entry. Ten kilometers away, the Chakrapath expansion has not yet started. Two months after Nepal and China signed an Rs 11 billion ($72 million) agreement on May 16 for the 8.2-kilometer Kalanki-Basundhara stretch, the road is still a field of mud and weeds, with contractor selection still waiting on Chinese authorities under the terms of the grant.

Read more: The Kathmandu Post (toll schedule), Ratopati

Monsoon Leaves Seven Highways Shut

Seven highways are completely blocked and 12 more are allowing only partial traffic as landslides and flash floods have pinned down transport. The Mechi, Kanti, Diktel-Bhojpur and Araniko highways are still shut, as is the Tatopani road at Jurikhola in Bhotekoshi Rural Municipality-4, as machinery grinds through debris. Police reported two deaths and 15 injuries over 24 hours, interestingly, snakebites caused both fatalities and 11 of the injuries. With a Bay of Bengal low keeping the monsoon trough parked north of the Tarai, authorities have started to open the Koshi Barrage gates and have placed 21 districts on moderate flood alert.

Read more: myRepublica (landslide locations), The Annapurna Express (spokesperson quotes), Spotlight Nepal (rainfall forecast), Online Khabar (economic loss)

Electricity Dept Gives Survey Permits for 3,211 MW

The Department of Electricity Development issued survey permits for 99 hydropower projects of 3,211 MW and seven solar projects of 311 MW in fiscal year 2082/83, in addition to production permits for 29 hydropower projects of 1,857 MW. That brings the total to 264 hydropower projects with production permits for a combined 12,336 MW, plus transmission survey permits for 581 circuit kilometers in the 220 kV, 132 kV, and 33 kV classes. The department collects roughly Rs 3.5 billion ($23 million) a year in royalties, split between provincial and local governments.

Nepal Weekly

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