Business owners across Nepal say political stability has become more valuable than any currency. With 12 prime ministers since 2008, constant policy shifts have left businesses struggling to plan for the long term. From hotels in Thamel to tech startups in Lalitpur, the private sector wants consistent decision-making—regardless of who leads the government.
Political Uncertainty Hurts Business Growth
Nepal became a federal democratic republic in 2008. Since then, the country has seen rapid changes in leadership. In just 17 years, 12 prime ministers have taken office. Each new government introduces different policies, only to be reversed by the next one.
This back-and-forth has made it hard for businesses to invest or expand. A hotel owner in Thamel said, “We’re not concerned about the political system. What we need is stability and regimes that take consistent decisions.”
Tax rules, trade policies, and investment norms often change overnight. Entrepreneurs say this makes it hard to make long-term plans. Many now describe running a business as a gamble, not a strategy.
Skilled Workers Are Leaving the Country
As economic opportunities shrink, many Nepalis are going abroad for work. In 2023 alone, more than 600,000 people left the country, mostly heading to Malaysia, South Korea, and Gulf nations. Some experts say the actual number is even higher.
What began as short-term migration has now become part of the economy. Families rely on money sent from abroad to cover daily expenses, pay school fees, and build homes.
According to Nepal Rastra Bank, remittances reached nearly $11 billion in 2023. This made up over 25% of Nepal’s GDP. While helpful, experts warn that relying on foreign income is not a long-term solution.
“Nepal cannot grow by exporting its people,” said an economist in Kathmandu. “We need to create jobs here.”
Trade with India Shows Untapped Potential
India is Nepal’s largest trade partner. In the 2022–23 fiscal year, 64% of Nepal’s total trade—worth about $8.85 billion—was with India, according to India’s Ministry of External Affairs. Still, many believe there’s room to grow this partnership.
Nepali business groups are calling for better regional cooperation. They want smoother trade, easier transport rules, and more investment in cross-border infrastructure.
Two new international airports—in Pokhara and Bhairahawa—were built to boost trade and tourism. But they remain underused. One reason is limited flight access to Indian cities.
Air Connectivity Faces Major Hurdles
Nepali airlines, including Himalaya Airlines with Chinese investors, face restrictions on flying to Indian destinations. Nepal has long requested new air routes through Janakpur, Nepalgunj, and Mahendranagar. These would reduce flight time and fuel costs.
Currently, all international flights must enter through Simara, a longer route that adds to operational costs.
Indian authorities cite security concerns, especially near the Gorakhpur airbase, for the delay in approving new routes.
“We understand security concerns,” said a Nepali aviation official. “But a flexible solution would benefit both countries.”
Land Mobility Is Still Uneven
Road transport between the two countries also has issues. Indian vehicles can enter Nepal by paying a small fee—around NPR 250 to NPR 500 (INR 150 to INR 300). They face minimal checks.
In contrast, Nepali vehicles entering India must complete complex paperwork, offer bank guarantees, and get prior approvals. These barriers slow down cross-border business.
Even for people, travel is not smooth. Entrepreneurs say they face long visa processing times and increased scrutiny at Indian airports.
What Nepal’s Businesses Need Now
The private sector says the answer is not just trade or remittances—but a stable political environment. Without it, policies will keep changing, making it hard for businesses to plan or grow.
Nepal’s economy needs a new focus on long-term development. That means consistent government decisions, improved regional cooperation, and investment in infrastructure.
