KATHMANDU: Beneath the cluttered skyline of tangled wires, scaffolds, prayer flags, and pro-monarchy banners fluttering over recent protests, entrepreneurs and business owners in Kathmandu have grown accustomed to fast-changing ministries just as they have to the valley’s notoriously erratic weather.
Across boardrooms, shop floors and startup hubs, one sentiment rises above the rest: political stability, regardless of who delivers it-king or elected leader-is now the most valuable currency in Nepal’s economy.
Since declaring itself a federal democratic republic in 2008, Nepal has cycled through 12 prime ministers. Most held office just long enough to introduce fresh policies, which their successors promptly scrapped or reversed.
The consequences, entrepreneurs say, aren’t just political. They affect operations. Each new regime, entrepreneurs say, arrives not just with a different tone but with a dramatically different playbook. Business policies shift abruptly – from tax incentives to trade norms – often reversing the decisions of the previous administration. For those investing capital or hiring at scale, this volatility makes long-term planning feel less like strategy and more like guesswork.
“We’re not concerned about the political system,” said a hotelier in Thamel. “What we need is stability and regimes that take consistent decisions.”
This inconsistency has contributed to a steady exodus of Nepali workers. Over 6 lakh Nepalis –people say the true figure is higher — left the country last year for jobs abroad, mainly in Malaysia, South Korea and the Gulf. For many, migration has become a substitute for economic opportunity at home. Labour migration, once seen as a temporary fix, has become a structural feature of the economy. The economic footprint of this exodus is staggering. Remittances touched nearly $11 billion in 2023, accounting for over a quarter of Nepal’s GDP. The money keeps families afloat, funds education, builds homes – and props up a national economy struggling with investment uncertainty and anaemic job creation.
But the business community knows that exporting human capital is no long-term growth model. With domestic opportunity stalling, they are looking outward for trade, investment, and regional infrastructure partnerships – particularly with India. In 2022-23, India accounted for 64% of Nepal’s total trade, valued at approximately $8.85 billion, according to India’s ministry of external affairs. Yet entrepreneurs believe much of that relationship remains under-leveraged.
Two newly built international airports in Pokhara and Bhairahawa remain underutilised, despite significant investment. Entrepreneurs cite aviation restrictions as one reason growth remains stifled. Himalayan Airlines, which has Chinese investors, has not been granted permission to fly to Indian cities. To be sure, Nepal has long requested new air entry points into India – via Janakpur, Nepalgunj and Mahendranagar – to shorten routes and improve connectivity. But progress has been slow, with Indian authorities citing security sensitivities, particularly near the Gorakhpur airbase. For now, all international flights into Nepal must detour through Simara, adding fuel costs and operational inefficiencies. “We understand the concerns,” said an aviation executive. “But we believe there’s space for flexibility that can benefit both nations.”
On land, too, mobility remains uneven. Indian vehicles entering Nepal face nominal fees – Nepal Rs 250-500 (INR 150-300) per day – and little paperwork.
In contrast, Nepali vehicles crossing into India are subject to cumbersome requirements: prior approvals, bank guarantees and multiple layers of documentation. Even individual movement faces friction. Entrepreneurs report delays in visa processing and heightened scrutiny at Indian airports.
