AGP Executive Report

Hospitality & Tourism: Marriott International and CG Hospitality have signed an agreement to develop and operate luxury hotels in Nepal—The Ritz-Carlton and The Westin in Kathmandu—plus a JW Marriott in Siliguri, aiming to lift high-end tourism and jobs across South Asia. Energy & Household Costs: India’s domestic LPG price was hiked by ₹29 per 14.2kg cylinder, with the government saying global LPG costs jumped ~46% due to West Asia disruptions and that it is absorbing about ₹700 under-recovery per cylinder to keep prices low for consumers. Nepal–India Border Reset: Nepal’s FM Shishir Khanal, after talks with EAM S Jaishankar, said border disputes should be handled through existing bilateral mechanisms with an “open heart,” rejecting third-party mediation and focusing on economic transformation, trade, connectivity, and energy cooperation. Digital Payments & Cross-Border Tech: India and Nepal moved to operationalise cross-border remittance/payment linkages, including UPI–NPI linkage, alongside cooperation on language AI and digital public infrastructure. Climate & Mountain Risk: Reports highlight changing Himalayan disaster patterns tied to climate change, while BLACKYAK hosted the “Himalayan Climate Charter 2026: Namche Summit” to push practical climate action. EV Infrastructure: Nepal is urged to scale EV charging to at least 10,000 stations by 2030, as current coverage remains limited and concentrated in major cities. Wildlife Conservation: Researchers confirmed a rare Chinese pangolin in a sacred community forest in Sunsari using camera traps, adding to conservation knowledge for critically endangered species.

Health Insurance Reform: Nepal’s Ministry of Health says it will amend the Health Insurance Act to fix complaints and make the scheme more effective, with a push to reach citizens with basic services within three years. Nepal–India Border Diplomacy: Foreign Minister Shishir Khanal reiterated Nepal wants to resolve Kalapani, Lipulekh and Limpiyadhura through existing bilateral mechanisms only, ruling out third-party mediation while citing access to historical documents if needed. Luxury Tourism Push: Marriott International and CG Hospitality Global signed MoUs to build two ultra-luxury hotels in Kathmandu—Ritz-Carlton and Westin—targeting openings by 2031 and adding nearly 300 rooms. Cross-Border Digital Payments: Nepal and India moved forward on operationalising cross-border peer-to-peer payments, building on earlier NCHL–NPCI MoUs and QR payment rollout. EV Charging Gap: Nepal’s EV promotion study urges at least 10,000 charging stations by 2030, noting today’s network is far smaller and concentrated in major cities. Tech & Skills Spotlight: Huawei ICT Competition drew 220,000+ students and faculty from 2,000+ institutions across 100+ countries, marking its biggest edition. Climate Risk for Mountaineering: Experts warn climate change is making Himalayan climbing more dangerous via higher snowlines, faster ice melt, and worsening erosion. India Border Trade Tech (Regional Watch): India prepares to launch its Land Port Management System on June 9 to digitise land-port cargo and passenger processing.

India-Nepal Diplomacy: Nepal FM Shishir Khanal met EAM S Jaishankar in New Delhi, reviewing cooperation on development, connectivity, trade/transit, energy and people-to-people ties, and pushing a “no old baggage” reset focused on economic transformation. Cross-Border Payments & Digital Tech: India and Nepal launched UPI–NPI peer-to-peer linkage for personal remittances, and signed a BHASHINI–Kathmandu University MoU to build multilingual AI and “voice-first” digital public infrastructure. LPG & Energy Costs: India raised domestic LPG by Rs 29 to Rs 942 per 14.2-kg cylinder, but the government says households still pay far below market-linked supply cost (over Rs 1,600) due to subsidies/under-recovery absorption; PMUY beneficiaries effectively pay Rs 642. Food Safety Push: Nepal’s Health Minister Nisha Mehta pledged stronger food safety implementation, including lab upgrades, risk-based market monitoring, and better hygiene from production to consumption. Electricity Dues for Industry: NEA revived an administrative review committee to settle long-running dedicated feeder/trunk line electricity dues owed by industrialists. Climate & Environment: Youth in Shuklaphanta vowed practical climate action, including tree planting and stopping land from going barren. Tourism & Local Industry: A community-built trekking route in Ruby Valley links Kalo Daha/Seto Daha to Harchi Pass, with plans for shelters and support infrastructure.

Nepal-India Dealmaking: In New Delhi, Foreign Minister Shisir Khanal met EAM S. Jaishankar as both sides pushed a “reset” in ties, with Jaishankar virtually handing over 72 health facilities and 12 cultural heritage projects and jointly launching UPI–NPI linkage to ease cross-border remittances; they also exchanged an MoU between Digital India Bhashini and Kathmandu University for a “Voice First” language translation platform. Energy & Industry Finance: Nepal’s Social Security Fund says it has collected Rs 111.07 billion and will prioritize investments in hydropower, transmission, and solar/renewables, with proposals under review and a stated 20 MW threshold for hydropower. Grid & Transmission Buildout: A PPP-backed West Seti 400 kV transmission line project is moving ahead via a new special-purpose company, aiming to connect western hydropower to the national grid. Market Pulse: NEPSE slipped 0.96% last week after the budget failed to spark sustained momentum, with investors losing about Rs 45 billion in market value. Urban Mobility: Uber debuted in Nepal with Uber Go/Comfort and Uber Bike, onboarding 2,000+ drivers early on. Rural Connectivity: Api Himal Rural Municipality in Darchula finally got road access to Ward 3, easing transport costs and isolation.

Energy & Power Sector: Nepal’s Energy Minister Biraj Bhakta Shrestha urged NEA to act fast on budget implementation, stressing timely completion of transmission lines and substations and stronger management-led execution. Mobility & Digital Services: Uber officially launched in Nepal with Uber Go, Uber Comfort and Uber Bike, partnering with Taximandu and citing early driver sign-ups and plans to expand beyond ride-hailing. Agribusiness & Food Prices: Nepal Layers Poultry Farmers Association revised egg farm-gate support rates upward, pushing retail prices to around Rs 25 per egg amid higher production costs and hot-weather supply pressure. Tourism & Local Industry: Parbat is emerging as an adventure tourism hub, with bungee, zip-lining and suspension bridges driving hotel and restaurant growth and more stopover visits from Pokhara-bound travelers. Aviation & Connectivity: Himalaya Airlines started direct Kathmandu–Shenzhen–Kathmandu scheduled flights, opening a new air corridor to China’s tech and manufacturing hub. Diplomacy for Trade & Energy: Nepal’s Foreign Minister Shisir Khanal arrived in India for talks with S Jaishankar, with development cooperation, trade/investment and power-sector cooperation expected on the agenda. Environment & Public Awareness: World Environment Day coverage in Nepal highlighted climate impacts on livelihoods and the need for nature-first, people-centered action. Industry & Capital Markets: Sopan Pharmaceuticals’ IPO listing on NEPSE began trading with an opening range set by the exchange. Safety & Infrastructure Risk: A fire destroyed a Bara cotton godown at Triveni Spanning Mills Industry, with police citing an electrical short circuit as the cause.

Aviation & Trade Connectivity: Himalaya Airlines launched the first direct scheduled Kathmandu–Shenzhen–Kathmandu service, with Airbus A320 flights starting June 4, opening a new air corridor to China’s tech-and-manufacturing hub. Mobility & Digital Services: Uber officially entered Nepal after trials, launching in Kathmandu and positioning itself against Pathao, InDrive and Yango. Energy Policy & Power Sector: Government clarified Budhigandaki hydropower will be developed as a multi-purpose project (power, irrigation, drinking water, fisheries, ecotourism) under an authority model; Energy Minister urged Nepal Electricity Authority to execute the budget fast, while 32 applications were received for the Electricity Regulatory Commission leadership. Hydropower Procurement Watch: A complaint alleges contract irregularities at Modi Hydropower Company, including claims of fake experience certificates used in tenders. EV Sector Scrutiny: APF seized 776 electric vehicles over suspected leaked tax-change plans and alleged fraudulent import documents. Business & Markets: NEPSE fell 11.37 points to 2,756.41; Nepal’s Chamber of Commerce pushed for an electricity-and-technology-led industrial transformation. Diplomacy: Foreign Minister Shishir Khanal began a visit to India (June 5–7) for talks with Jaishankar on trade, connectivity, energy and people-to-people ties. Environment & Wellness Tourism: World Environment Day events highlighted climate- and nature-friendly development, while spa industry standards were discussed to support Nepal’s 2027 wellness tourism push.

Hydropower Policy Shake-up: Nepal’s budget moves to restructure the Electricity Authority, tighten rules around PPAs, and open more room for private participation in transmission and power trading—while hydropower players warn the PPA “take or pay” details still lack clarity. NEA Restructuring, Local Role: NACEUN says any NEA overhaul must empower local governments and communities to cut leakage and improve accountability, and it wants the 5% VAT on higher electricity use withdrawn. Khimti Hydropower Next Steps: NEA reconstituted committees to negotiate Khimti’s share transfer and settle tariff/admin disputes, including a new PPA and royalty/tax arrangements. EV Tax Debate: Finance Minister Swarnim Wagle says EV prices under NPR 5 million have fallen after tax changes, but operators fear higher costs—especially for minibuses. Labour Rights in Focus: A study finds wage theft is widespread in Nepal’s informal sector, with most workers lacking written contracts and many receiving only partial or late pay. Agriculture Tech & Seeds: KOPIA Nepal marks its first year supporting agro innovation, while Koshi Province still meets only about 22% of paddy seed demand locally, pushing farmers toward hybrid seeds. Trade Disruption for Tea: Nepali tea exports to India face renewed hurdles as India resumes mandatory sampling and lab testing, disrupting purchases. Diplomacy Watch: Foreign Minister Shisir Khanal heads to New Delhi (June 5–7) for talks with Jaishankar on trade, investment, connectivity, energy and people-to-people ties amid recent border-row noise. Environment Day: World Environment Day events in Nepal stress nature-friendly development and climate action as impacts intensify.

Energy & Hydropower Governance: NEA reconstituted committees to negotiate the share transfer and disputes around the 60 MW Khimti Hydropower Project, including a new Power Purchase Agreement, royalty and tax arrangements. EV Policy: Finance Minister Swarnim Wagle says EV prices under Rs 5 million have decreased after the government shifted EV taxes to be based on price rather than engine capacity. Diplomacy for Trade & Connectivity: Foreign Minister Shisir Khanal will visit India June 5–7 for talks with Jaishankar on trade, investment, connectivity, energy and people-to-people ties, amid recent border-row sensitivities. Tourism & Aviation Demand: May brought record Indian arrivals to Nepal by air (40,782), while foreign tourist arrivals hit 102,626, boosting hotels especially in Pokhara. Infrastructure Delivery: Gautam Buddha Cricket Stadium construction resumed after payment delays were cleared; separately, Japan signed an additional JPY 5.7 billion loan to keep the Nagdhunga Tunnel on track for public opening around July 2026. Industry & Private Sector: CNI welcomed the budget’s industrial push, including customs duty reductions and excise removals, while also backing electricity demand charge reviews and industrial estate provisions. Tech in Logistics (Everest): Drones are increasingly used to fly supplies across the Khumbu Icefall, cutting risky carry trips for Sherpa teams. Sports & Consumer Markets: TVS launched Ronin Monotone and Agonda variants in Nepal, targeting the premium motorcycle segment.

Infrastructure Push: Japan approved an extra JPY 5.7 billion (about Rs. 5.5 billion) for Nepal’s Nagdhunga Tunnel, taking total support to over Rs. 22 billion; the 2.68 km tunnel is near completion (about 99%) and could open to the public in July 2026. Road Resilience: With monsoon arriving, roads across Nepal face landslide and blockage risks, threatening lifeline highways and travel safety. Policy for Faster Builds: Government plans a “Sunset Law” to automatically expire after 10 years, aiming to cut legal and administrative delays that stall infrastructure projects. IT & Digital Governance: MoIC is restructuring the communication sector under federal lines, including coordination on radio licensing and updates to outdated laws; NAS-IT also welcomed budget measures to boost IT exports and digital services. Energy & Industry Costs: Budget debate continues over electricity VAT and demand charges, while CNI says customs and excise reforms could lower production costs and support industrial zones and import substitution. Agriculture Prices: Kalimati set wholesale rates for fruits and vegetables for Jestha 21, shaping near-term market costs. Healthcare Supply: Nepal faces a shortage of platinum-based chemotherapy drugs like carboplatin, disrupting cancer treatment. Cooperatives: Deposit return for problematic cooperatives remains unclear, with critics saying the FY 2026/27 budget lacks dedicated allocations. Tourism & Logistics: Pokhara–Muglin road travel has eased as expansion works progress; Everest saw a record 1,000+ summit attempts this season, with verification pending.

IT Governance: Nepal’s IT minister Dr. Bikram Timilsina says old laws will be amended to improve coordination across federal, provincial and local bodies, with regular monitoring of performance. Medical Regulation: The Medical Education Commission will re-issue past directives after legal changes made earlier ones ineffective, aiming to streamline regulation of medical education. Public Health Alert: The health ministry has put high alert at Tribhuvan International Airport and border points for possible Ebola entry, with plans for testing and health-worker orientation. Budget & Industry Signals: FNCSI and CNI both say the FY 2026/27 budget boosts private-sector confidence, with tax and industrial reforms, digital economy support, and energy/infrastructure measures. Chemotherapy Disruption: A shortage of platinum-based drugs like carboplatin is disrupting cancer treatment, as suppliers stop bringing medicines amid price caps and manufacturers cut production. Tax Policy Scrutiny: The Finance Bill was revised multiple times within days, raising concerns over transparency and due process. Transport Infrastructure: Japan signed an additional JPY 5.7bn loan for the Nagdhunga Tunnel, targeting public operation in July 2026. Energy Debate: PM Balen Shah’s remarks on electricity capacity and induction stoves sparked debate over grid strength and VAT-linked policy direction. Healthcare Waste & Energy: Dhulikhel Hospital inaugurated an autoclave-based healthcare waste treatment site and launched a rooftop solar project with German support. Tourism & Connectivity: Nepal welcomed 102,626 foreign visitors in May (+19% YoY), and Himalaya Airlines plans direct Kathmandu–Shenzhen flights from June 4. Everest Boom: Everest saw a record season with over 1,000 summit attempts, driven by a wider summit weather window.

Budget & Industry Policy: Finance Minister Dr. Swarnim Wagle tabled Nepal’s FY 2083/84 budget of Rs 2.124 trillion, targeting 7% growth with inflation capped at 6%, while debates continue over the budget’s size, capital spending share, and implementation capacity. LDC Graduation: Nepal has asked the UN to defer its Least Developed Country graduation from Nov 2026 to Nov 2029, citing regional conflicts, supply-chain disruptions, remittance pressure, and weak growth forecasts. Hydropower & Power Sector: The 216 MW Upper Trishuli-1 (UT-1) hydropower project moved into its final pre-generation stage after installing the first weir gate, aiming to boost power supply for Kathmandu and beyond. Agriculture & Value Chains: Nepal’s budget signals stronger agriculture incentives, including grants for investors in agriculture and livestock, higher fertilizer allocation, and steps to systematize farmer support. Energy Costs Hit Manufacturing: Major development projects and manufacturing are under strain as West Asia conflict and global oil price volatility raise fuel and polymer costs, pushing up expenses and supply risks. Tourism & Connectivity: Nepal welcomed 102,626 international visitors in May (+19% YoY), while Himalaya Airlines prepares direct Kathmandu–Shenzhen flights from June 4 to strengthen business and tourism links. Trade & Logistics: A border dispute over the Lipulekh pilgrimage route resurfaced, with Nepal protesting and India leaving room for dialogue. Market Watch: NEPSE rose 22.21 points to close at 2,777.58, with finance and hydropower stocks leading. Agribusiness Spotlight: Organic vegetable farming in Dang is boosting incomes, supported by agriculture value-chain programs. Startup & Expo Links: India hosted a second batch of Nepali startups, and Nepal participated in the UN International Bazaar 2026 showcasing crafts and heritage.

Gender-Responsive Food & Biodiversity: Nepal’s NA vice-chair Lila Kumari Bhandari urged gender-responsive planning for food security and biodiversity, calling for stronger rights for small farmers and women and support for indigenous technologies. Coffee Supply Chain Upgrade: India has provided advanced Arabica coffee seeds to Nepal to help break the sector’s long dependence on a single variety, with technical cooperation under a joint agriculture framework. Tourism Boost from India: Nepal recorded a record 40,782 Indian air arrivals in May (+32.66% y/y), driven by better connectivity, policy changes on Indian currency access, and wider digital payments. Infrastructure Speed-Up: Government is drafting a “sunset law” to cut delays in roads, irrigation and hydropower by tackling land, compensation, tree-felling permits and construction material access. Road Safety: A safety audit has started on the Muglin–Pokhara Prithvi Highway as accident risks rise during the final phase of expansion. Budget Watch: Nepal’s health allocation for FY 2026/27 is Rs 101.95bn (4.85% of total), with critics saying it remains below WHO-recommended levels. Capital Markets: NEPSE climbed 22.21 points to close at 2,777.58 after the budget announcement, with finance and non-life insurance leading gains. Agriculture Incentives: The budget outlines incentives for farmers investing in agriculture and livestock, plus land-bank plans and agro-pooling to improve productivity and commercialization.

Governance & Budget Push: Nepal’s FY 2026/27 reform agenda is tied to digitisation and faster delivery, with the government also restructuring ministries into 18 and assigning new high-level roles for cybersecurity, data governance and AI. Power & Infrastructure: The budget targets an extra 1,040 MW next FY and plans multiple transmission line completions; a 400 kV West Seti transmission project is moving ahead via a PPP-backed special purpose company. Electricity Tax Debate: VAT on electricity consumption (5%/13%) is sparking backlash as officials argue it funds grid upgrades while consumers worry about fairness. Industry & Trade: Janakpur Cigarette Factory is struggling to survive amid weak management and competition, while Nepal’s NEPSE reacted negatively to the budget news. Aviation & Tourism: Himalaya Airlines will start direct Kathmandu–Shenzhen flights from June 4, aiming to boost inbound tourism during a typically lean season. Climate-Resilient Agriculture: ICIMOD and partners announced winners of a Hindu Kush Himalaya innovation challenge, and the National Nature Conservation Fund signed deals to promote climate-resilient food crops. Digital Payments: India’s UPI hit record May volumes and value, reflecting stronger consumer spending—relevant for Nepal’s fintech ecosystem too. Health & Business Growth: NephroPlus expects 15–20% revenue CAGR over the next three years, citing rising dialysis demand and digital scale-up. Culture & Film: KIMFF wrapped up with major documentary and fiction awards, highlighting Nepal’s growing mountain film industry.

Aviation & Trade Links: Himalaya Airlines will start direct Kathmandu–Shenzhen flights from June 4, positioning Shenzhen as a tech and manufacturing corridor for Nepal’s tourism and business travel. Energy Policy & Industry Costs: The government has imposed VAT on electricity consumption (5% for households, 13% for others) from the coming fiscal year, with Finance Minister Swarnim Wagle saying it won’t be reversed while options are discussed to protect consumers. Power Expansion: Budget plans target an extra 1,040 MW next FY (670 hydropower, 370 solar) and completion of major transmission lines, including 400kv and 132kv routes, to strengthen grid capacity. Budget & Markets: NEPSE fell 26.72 points on the first trading day after the FY 2026/27 budget, while business groups and chambers largely welcomed tax and reform signals. Infrastructure Reform: A draft “Sunset Law” aims to speed up stalled projects by cutting procedural delays in areas like environment and land acquisition. Agribusiness & Dairy: Nepal marks World Milk Day with focus on sustainable dairy growth, while World Milk Day coverage highlights milk’s role in rural cash flow. Regional Industry Watch: Bangladesh lags in buffalo milk production versus neighbors, pointing to productivity and investment gaps. Health & Community: A free cardiac camp in Gorkha benefited over 1,000 people with ECG/ECHO screenings and referrals. Digital Payments: India’s UPI hit record May volumes and value, reflecting stronger travel and consumer spending momentum.

Budget & Energy Infrastructure: PM Balendra Shah says VAT revenue from electricity use above 50 units will fund upgrades to transformers, transmission lines and substations, after the new tax drew criticism from lawmakers and energy advocates. EV Policy Shock: Revised taxes replace excise duty with a Clean Infrastructure Investment Fee, with customs duty, road fee and VAT still applying—dealers warn EV prices could jump from Rs200,000 to over Rs10 million. Hydropower as Growth Engine: A budget push puts hydropower at the center of Nepal’s economic transformation, targeting +1,040 MW next year and shifting focus from generation to transmission, storage, trade and institutional reform. Mobile Industry Alliance: CAN Federation and the Nepal Mobile Distributors Association form a strategic alliance to tackle grey-market imports and policy ambiguity, aiming to protect legitimate businesses and improve regulation. Gold & Consumer Taxes: Gold prices jump Rs. 20,500 per tola after customs duty on gold imports rises to 20%, while VAT bills are also set to feed a lottery-style scheme to boost invoice demand. Trade & Connectivity: The Jogbani–Kimathanka road link is opening a potential eastern corridor, bringing tractors and supplies to remote Sankhuwasabha. Tourism Pressure Regionally: Iran-war fuel spikes are already hitting Asia’s tourism recovery, with airlines cutting routes and ticket prices rising. Governance & Media: Press Council Nepal records 176 complaints of false news by May 6 as budget debates intensify.

Nepal Budget Push: Nepal unveiled a NPR 2.1 trillion reform budget (FY 2026/27) under PM Balendra Shah, aiming to revive growth with infrastructure, tech, health and education, plus income-tax relief and higher public salaries—while promising faster spending and a “mission mode” approach to cut project delays. Capital Markets & Taxes: Capital market reforms drew mixed reactions as the budget makes capital gains tax final for individuals but raises rates for short-term traders and adjusts long-term taxation; investors also flagged tax inequities. Electricity VAT Debate: PM Shah defended a 5% VAT on electricity use above 50 units as necessary for upgrading transformers and substations, while critics say it contradicts plans to boost domestic power consumption. Industry & Infrastructure Execution: Lawmakers and industry voices raised concerns that the budget didn’t sufficiently cover operational needs for industries, alongside broader worries about sluggish infrastructure delivery. Tarai Water Crisis: National Assembly lawmakers pressed for urgent action as drinking water shortages deepen across Madhesh and the southern plains. Public Health: Health Minister Nisha Mehta marked World No Tobacco Day by urging quitting and warning against vapes/e-cigarettes; a study also found tobacco addiction among children under 12. US-Nepal Tourism & Innovation: A US Under Secretary highlighted innovation and adventure tourism ties at Ascent Summit 2026 in Kathmandu. Border Row: PM Shah said the India-Nepal border dispute is not one-sided and that Nepal has also raised concerns with China and the UK.