KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to source on key financial updates in Nepal. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top highlights:

Kathmandu Choked by Toxic Smog; Experts Urge Health Emergency as AQI Soars:

Kathmandu Valley is grappling with severe air pollution, with AQI hitting 348—marked as extremely unhealthy. Experts blame weak winds, forest fires, and burning crop residues. The Ministry of Health warns of serious health risks, especially for children, pregnant women, and those with chronic illnesses. Doctors recommend avoiding outdoor activities and using masks. Environmentalists urge a health emergency declaration. Despite existing air quality management plans, enforcement is weak, and human rights advocates call the current situation a violation of the right to clean air.

Bheri Babai Diversion Project Nears Completion with 83% Progress:

The Bheri Babai Diversion Project, launched in fiscal year 2014/15, has made 83.7% progress. The project aims to divert water from the Bheri River to the Babai River for irrigation in Banke and Bardiya districts, benefiting 51,000 hectares of land. Despite land acquisition challenges, significant infrastructure, including tunnels and dams, is completed. The project also includes electricity generation, with 46 MW capacity, and is expected to boost agriculture and energy supply once finished.

29 Bridges Completed Under Narayangadh-Butwal Road Expansion Project, Remaining Work to Finish Soon:
The construction of 29 bridges in the eastern section of the Narayangadh-Butwal road expansion project has been completed. Only five bridges remain to be constructed, with the long bridges at Jai Shree and Beldiya yet to be finished. The construction of a new bridge over the Vinayi River has been prioritized due to the collapse of the old one, and it is expected to be completed by the first week of Jestha. The project, funded by the Asian Development Bank, is expected to be completed soon.

NEPSE Sees 40.09-Point Increase as Investors Snap Up Low-Priced Stocks:

Last week, the Nepal Stock Exchange (NEPSE) rose by 40.09 points, closing at 2,703.39 points, driven by investors purchasing undervalued shares. The market saw fluctuations between 2,654.57 and 2,732.85 points, with a volatility of 78.28 points. The trading index surged by 11.43%, while the manufacturing group dropped by 2.40%. The total turnover increased by 4.89% to Rs 26.65 billion, with market capitalization rising by Rs 67 billion. Radhi Bidyut Company was the top gainer, while Bottlers Nepal saw the largest loss.

Share Mortgage Loan Rates Drop Below Double Digits Across Most Banks:

In Chaitra, most Nepali banks are offering share mortgage loans (margin loans) at single-digit interest rates, attracting increased investor interest in the stock market. With ample liquidity in the banking sector and declining base rates, banks now offer loans at premiums of around 2% above base rates. Rastriya Banijya Bank offers the lowest rates, from 6.28% to 7.28%. Other banks like Everest, Krishi, and Global IME also offer rates below 9%. Overall, margin lending has surged by 27.8% this fiscal year, reaching Rs. 115 billion. Experts anticipate further growth in such loans as investor confidence gradually improves.

US to Impose 10% Customs Duty on Nepali Exports: Key Sectors Brace for Impact:

A new 10% customs duty imposed by the United States on Nepali goods is expected to affect various industries, particularly carpets, pashmina, and handicrafts. The Nepal Carpet Producers and Exporters Association expressed concern that this tariff could reduce the competitiveness of Nepali carpets, which make up 60% of exports to the U.S. Similarly, the pashmina sector fears rising costs due to the tariff. However, some sectors, like garments, see potential benefits from the relatively low tariff compared to other nations.

Employees Provident Fund Distributes Nearly Rs 5 Billion in Profit to Account Holders:

The Employees Provident Fund (EPF) distributed a total profit of Rs 5.34 billion to its account holders from the earnings of the last financial year. Of this, Rs 5.27 billion was allocated to the provident fund holders, and Rs 64.3 million to the retirement fund contributors. EPF provided a 5.50% interest rate on the savings, with an additional 1.10% profit distribution, resulting in a total return of 6.60%. The fund also offers various loans and social benefits like health, maternity, and funeral grants.

Thick Fog Halts Manthali–Lukla Flights, Over 250 Tourists Stranded:

Thick fog has halted flights from Manthali to Lukla, stranding over 250 tourists, mostly foreigners and guides, at Manthali Airport. Although five flights operated on Thursday morning, worsening weather in the Khumbu region has grounded flights since then. With visibility low, many tourists are now chartering helicopters. On Friday alone, over 100 tourists flew to Lukla and Phaplu by helicopter. The government manages seasonal flights to the Everest region from Manthali during peak spring and autumn trekking seasons.

Six-Lane Expansion of Suryabinayak–Dhulikhel Road Faces Delays:

The six-lane expansion of the Suryabinayak–Dhulikhel section of Araniko Highway will not be completed on time, with only 40% of the work finished so far. Initiated in December 2022 with a 36-month deadline, the 16-km project is hindered by delays in demolishing structures, relocating utilities, and resolving land disputes—especially in urban areas like Banepa. DPR reports also highlight geographic challenges in Sanga, ruling out service lanes and tunnel alternatives. The project, costing over Rs 8 billion, includes additional bridge construction. Officials estimate only 65% of physical work will be done by deadline, requiring an extension beyond the original schedule.

Minister Bhandari Calls for Boosting Nepali Exports to Reduce Trade Deficit with China:

Industry, Commerce, and Supplies Minister Damodar Bhandari emphasized the urgent need to reduce Nepal’s trade deficit with China by increasing exports of herbal products, handicrafts, agricultural goods, and garments. Addressing the 25th anniversary of the Nepal Himalayan Cross-Border Commerce Association, he highlighted government efforts including trade fair participation, flexible foreign exchange policies, training on Chinese language and trade practices, and infrastructure upgrades at key border points like Tatopani and Rasuwagadhi. The minister stressed public-private collaboration to make Nepal-China trade more balanced and sustainable, and encouraged the association to support branding, diversification, and attract Chinese investment through strategic partnerships and cultural exchanges.

India Recognizes Nepal’s Food Test Reports, Easing Agri-Exports:

India has officially recognized food quality test reports issued by Nepal’s National Food and Feed Reference Laboratory (NFFRL), ending the long-standing requirement for Nepali exporters to conduct tests in India. The recognition, granted by India’s Food Safety and Standards Authority (FSSAI) and NABL, applies to 10 categories including tea, coffee, honey, dairy, spices, and processed water. This move significantly reduces export costs and delays—previously taking up to a month and costing up to NPR 50,000 per test. Nepali businesses can now export directly using domestic certification, a breakthrough expected to boost agri-export volumes and competitiveness in the Indian market.

Bhedetar and Namje See Tourism Boom as Hotels, Homestays Thrive:

Bhedetar, a cool hill station in eastern Nepal, is witnessing a tourism surge, with Indian visitors notably increasing. Located on the Dharan-Dhankuta Highway, Bhedetar hosts around 200 hotels and an annual food festival. Nearby Namje, famed for its Magar culture and homestays, was recognized by CNN as a unique global destination. Despite pandemic setbacks, tourism is rebounding, supported by Koshi Province’s infrastructure investment, including the ongoing Indigenous Park project. Local homestays thrive, offering cultural experiences and traditional cuisine.

Khukuri Rum to Be Produced in India with MSKETI Beverages as Main Investor:

Khukuri Rum, a popular Nepali brand, will soon be produced in India through full investment by MSKETI Beverages, a company headquartered in Singapore. The production, set to begin by 2026, aims to produce 20,000 cases and expand further. The rum will be available in three variants, each with unique flavors like caramel, vanilla, and Himalayan herbs. The brand’s legacy, established in 1959, carries Nepal’s heritage and has garnered international acclaim, including several prestigious awards.

51 Institutions and Individuals Who Haven’t Paid Rent for Bhaktapur Mandap Property Publicly Named:

The Social Welfare Council has publicly named 51 institutions and individuals who have failed to pay rent for the property and land it owns in Bhaktapur Mandap, Kathmandu. The list includes notable entities such as Nepal Tourism Board, which owes over Rs. 16.7 million, and journalist Rishi Dhimal’s Reporters Club, with Rs. 4.65 million in dues. Despite repeated notices, these parties have not complied with the payment. The Council has warned legal action will be taken if the rent remains unpaid within the specified time.

Sabhapokhari Imposes Rs 100,000 Fine for Electrofishing, Incentives for Informants and Police:

Sabhapokhari Rural Municipality in Sankhuwasabha has decided to fine up to Rs 100,000 for electrofishing in restricted areas like Sabha Khola and Langkhuwa Khola. Traditional fishing methods like nets and hooks will also incur fines of up to Rs 50,000. Offenders will be arrested with police assistance, and 15% of fines will go to the police as incentives. Informants will receive 5% of the fine. Failure to pay may lead to legal action, officials said.

Growing ‘Thrift Shopping Culture’ in Nepal Amid Economic Challenges:

Thrift shopping, or buying second-hand goods at affordable prices, is gaining popularity in Nepal, particularly in cities like Kathmandu, Lalitpur, and Pokhara. The trend, driven by rising costs and economic pressure, encourages a sustainable and frugal lifestyle. This practice, which originated during the 1929 Great Depression, has now spread globally, including to countries like India, Australia, and Canada. In Nepal, second-hand markets and online platforms like “Hamarobazar” and “Meromarket” are thriving, promoting environmental and economic benefits.