AGP Executive Report

Markets: NEPSE inched up 2.66 points to close at 2,780.25 as turnover rose, with insurance stocks leading gains. Infrastructure: Japan’s JICA signed an extra JPY 5.7 billion loan for the Nagdhunga Tunnel, now nearing completion and expected to open for public use from July 2026. Roads: Travel on the Pokhara–Muglin highway is easing after expansion work, cutting the trip to about two hours on most sections. Finance & Tech Regulation: NRB tightened rules for digital payment investors and payment service providers, requiring detailed disclosures when investments cross set thresholds. Health: Nepal faces an acute shortage of platinum-based chemotherapy drugs like carboplatin, disrupting cancer treatment. Governance & Policy: The Medical Education Commission will re-issue its directives after legal changes, while IT-related law reforms are being planned across all levels of government. Diplomacy: National Assembly lawmakers urged a restrained, diplomatic approach to the Nepal–India border row, as parliament sessions were adjourned amid protests. Sports: Nepal’s women’s football team eyes Bangladesh in the SAFF semifinal, while Nepal’s cricket team heads to Jersey for World Cup League-2 prep. International: Nepal was elected Chair of the UN General Assembly’s First Committee on disarmament and international security.

Monetary Policy: Nepal Rastra Bank says its Standing Deposit Facility (SDF) has worked as an effective tool to curb excess liquidity and stabilize the interest-rate corridor floor, after banks struggled to use idle funds. Infrastructure & Finance: Japan has approved an extra JPY 5.7 billion ODA loan for the Nagdhunga Tunnel, pushing total Japanese support above JPY 22 billion; the project is in its final phase and aims to open in July 2026. Budget Watch: Finance Minister Swarnim Wagle tabled the FY 2083/84 budget, pitching reforms and a 7% growth target, while critics question whether the large size could fuel inflation. Politics & Governance: Nepali Congress called a Central Disciplinary Committee meeting; meanwhile, debate continues around the new Chief Justice appointment and seniority. Nepal-India Ties: India’s MEA reiterated the border issue is strictly bilateral with no role for third parties, while RSP chair Rabi Lamichhane met BJP leaders in New Delhi. Tourism & Connectivity: Nepal welcomed 102,626 foreign visitors in May (+19% y/y), and Himalaya Airlines announced direct Kathmandu–Shenzhen flights from June 4. Sports: Nepal qualified for the Asian Games men’s cricket tournament after Malaysia beat China; Nepal also marked strong cricket progress in qualifiers. Community & Culture: Gopal Baraili was elected chair of the National Association of Dalit Community Journalists Nepal; Nepal also participated in the UN International Bazaar 2026.

India-Nepal Border Row: India’s MEA says nearly 98% of the boundary is demarcated and unresolved parts—linked to Gandak River shifts and cross-border occupation—are being jointly mapped, adding there’s “no role for any third party” after PM Balendra Shah’s remarks. Parliament Turmoil: Nepal’s House and National Assembly sessions were repeatedly disrupted and adjourned as opposition demanded Shah’s statement be expunged or backed with facts; the HoR was postponed to Monday and the Nepali Congress also plans to boycott committee meetings. Diplomacy Watch: Rabi Lamichhane met India’s Jaishankar in New Delhi, with talks focused on development partnership and people-to-people ties, while India’s Amit Shah also interacted with the RSP delegation. Land Governance: The government formed a new “Land Problem Resolution Committee” after dissolving the previous land commission, appointing Balbhadra Bastola as chair to address landless and squatters’ issues. Sports: Nepal secured a spot in the Asian Games men’s cricket competition; in SAFF Women’s Championship, Bangladesh face Nepal in the first semifinal in Goa. Markets: NEPSE climbed 22.21 points to close at 2,777.58.

Budget Watch: Finance Minister Swarnim Wagle says Nepal’s FY 2026/27 budget is built on a five-year horizon to lay groundwork for long-term growth, with Rs 2.124 trillion and a revenue target of Rs 1.58 trillion. Economy & Governance: Economist Dr. Govinda Nepal argues the budget won’t revive the economy and criticises gaps for the poor, farmers and seniors, while private sector leaders welcome “positive signals” for the business climate. Public Finance & Corruption: Intermediaries are accused of defrauding the state treasury through inflated e-passport procurement variations, and critics say government action is too focused on prosecutions while cooperatives and public-facing issues remain neglected. Agriculture Push: The government unveils incentives to boost agricultural productivity, including grants for farmers investing at least Rs 20 million, plus farmer identity cards and land banks. Tax & Cost of Living: A “green tax” on smartphones and smartwatches is set to raise prices further, alongside broader telecom-related levies. Diplomacy & Neighbours: Rabi Lamichhane meets BJP chief Nitin Nabin in New Delhi as Nepal navigates India ties amid political heat. Sports: Nepal’s SAFF Women’s Championship semifinal vs Bangladesh is affected by a team tragedy after a player’s mother dies. Connectivity: Himalaya Airlines announces direct Kathmandu–Shenzhen flights from June 4.

Border Row in Parliament: Nepal’s PM Balendra Shah’s “encroachment” remarks on the India-Nepal border sparked uproar in both houses, with opposition lawmakers demanding an apology and removal of the statement from records; Nepal’s Foreign Ministry later clarified he meant cross-border occupation/no-man’s-land issues, not formal territorial takeover. Diplomacy & US Ties: US Under Secretary Sarah B. Rogers wrapped up a Nepal visit, stressing stronger Nepal-US partnership on investment, trade, tourism and digital infrastructure, including cooperation on cyber security and online scams. Aviation Link: Himalaya Airlines announced direct Kathmandu–Shenzhen flights starting Wednesday, aiming to boost business and inbound tourism. Electricity VAT Debate: The government imposed VAT on electricity (5% for households, 13% for others), saying it will fund upgrades, while consumers worry about fairness and tariff impacts. Markets Watch: NEPSE fell 26.72 points after the 2026/27 budget announcement, with investors reacting to tax and policy signals. Health Alert: Measles is spreading again, with outbreaks reported across multiple districts amid vaccine shortages and access challenges. Sports: Nepal’s SAFF Women’s semi-final build-up continues after Bangladesh’s heavy loss to India; meanwhile, Goa beat Nepal A in a domestic Gold Cup match.

Border Row in Parliament: Nepal PM Balendra Shah’s “mutual encroachment” remark sparked a fresh India-Nepal controversy, with Nepal’s Foreign Ministry later clarifying it referred to cross-border occupation and “no-man’s land” issues around Dasgaja, including Susta, Limpiyadhura, Lipulekh and Kalapani. Digital Payments Boom: In India, UPI hit record highs in May with 23.2 billion transactions worth about Rs 29.90 lakh crore, driven by summer travel and IPL. Budget Pressure on Households: Nepal’s FY 2026/27 budget drew criticism for not adequately protecting lower-income groups, while PM Shah said VAT revenue on electricity use above 50 units will fund power infrastructure upgrades. Tourism Hit by Iran War Costs: Rising jet fuel and uncertainty tied to the Iran conflict are straining tourism-dependent economies across Asia, with airlines cutting routes and travelers pulling back. Sports Spotlight: Nepal’s Kushal Bhurtel smashed six sixes in an over against China in the Asian Games qualifier, as Nepal posted 313/2 and won by 221 runs. Culture & Community: Nepal’s Indigenous Film Festival kicked off in Kathmandu, while Jigyasu’s poetry collection “Agnispandan” and the song “Bibas Aama” were released in Nepalgunj.

Asian Games Women’s Cricket Qualifiers: Thailand, Malaysia and China booked spots for the 2026 Asian Games in Japan after a Kuala Lumpur qualifying run; Nepal’s women missed out in the third-place playoff, losing to China in a rain-hit match. SAFF Women’s Championship: India thrashed Bangladesh 3-0 to top Group B and set up a semifinal vs Bhutan, while Bangladesh will face Nepal after Nepal beat Sri Lanka 2-0 to finish Group A champions. Border Row: PM Balendra Shah sparked a fresh controversy in Parliament by saying Nepal has also “encroached” on India’s land; Nepal’s Foreign Ministry later clarified it refers to “no-man’s land” encroachments and cross-border occupation, and said technical teams are mapping issues. Diplomacy: Shah said talks on Lipulekh/Limpiyadhura will involve India, China and the UK, and Nepal has sent a diplomatic note to India. Budget & VAT: Finance Minister Swarnim Wagle unveiled a VAT bill lottery scheme, promising VAT invoices will act as lottery tickets to boost compliance. Public Health: Health Minister Nisha Mehta urged tobacco users to quit on World No Tobacco Day, warning against vapes and e-cigarettes. Sports (Men’s T20I): Nepal made history with a 313/2 vs China, powered by Kushal Bhurtel’s 129 and six sixes in an over, in the Asian Games qualifier.

Budget & Economy: Finance Minister Swarnim Wagle unveiled a reform push in Nepal’s Rs 2.12 trillion budget, including tax incentives for IT exports (50% income tax relief), deductions for “sweat equity” for IT workers, and an AI-enabled, paperless “e-assessment” tax system; the budget also introduced foreign-investment easing (notification-based repatriation) and new capital-market rules. Energy & VAT Row: Opposition and energy voices are reacting sharply to the new 5% VAT on electricity consumption, with critics warning it could discourage power use and push people back toward LP gas. EV Tax Debate: Nepal’s EV tax system based on “motor peak power” is drawing controversy over weak testing facilities, inconsistent measurement, and certification gaps. Foreign Investment & Markets: Nepal also moved to make it easier for foreigners and NRNs to participate in secondary securities, alongside steps to streamline approvals and remittances. Security: Delhi Police Special Cell reported busting an ISI-linked Dawood Ibrahim terror module, arresting nine and recovering arms and explosives; reports say a Nepali-origin person was among those detained. Sports: Nepal’s women’s cricket team missed the Asian Games spot after losing to Malaysia in the qualifier semifinal; Nepal will face China for third place. Health & Events: The All Nepal Medical Conference (NMA Con 2026) is underway in Chitwan, while Saga Dawa is being observed across the country with merit-making and life-release rituals. Weather: Rain with thunder and lightning is expected in several provinces, with possible windstorms in some areas.

Nepal Budget 2026/27: Finance Minister Swarnim Wagle unveiled a Rs 2.12 trillion budget, promising middle-class relief and reforms, but critics warn it leans heavily on debt and may miss targets on jobs and infrastructure. Tax & Economy: Capital gains tax on share trading and real estate was raised in the Finance Bill, while excise duties on cigarettes and alcohol also increased; EV customs duties will shift to a value-based system. Energy & Power: The government aims to add 1,040 MW to the national grid next fiscal year, with Dudhkoshi Reservoir Hydropower (670 MW) set for a tender this year. Governance & Cities: Kathmandu Valley has started a pilot “faceless” AI-based traffic enforcement system in Thapathali to reduce on-street policing. Climate & Himalayas: Japan and UNDP handed over earthquake-recovery prefabricated buildings in Jajarkot to strengthen local services. International & Travel: Nepal’s embassy in Cambodia said fines for 602 overstayers were waived, urging return within a week. Culture & Film: “Shape of Momo” hit theatres, and Chinese films will screen in Kathmandu for a three-day festival. Weather: Moderate rain with thunder and lightning is possible in parts of the country.

Budget 2026/27: Nepal unveiled a Rs 2.124 trillion reform budget focused on reviving growth, stabilising the economy, and exiting the FATF grey list, with Finance Minister Swarnim Wagle pledging tax relief, higher salaries, and faster spending. Energy & Infrastructure: The NEA will be split into three separate agencies for generation, transmission, and distribution/trading, while Rs 17.64 billion is earmarked for the Kathmandu–Terai Fast Track project. Tech Push: The government plans to transform Nepal into an AI hub, including an AI compute in Syuchatar, and will set up a sovereign wealth fund using part of foreign exchange reserves. Diplomacy Overhaul: The Foreign Ministry opened ambassador posts to open competition for the first time, with strict eligibility rules, and also plans to close three embassies and two consulates under a revised economic diplomacy strategy. Republic Day: President Ram Chandra Paudel urged unity and good governance at Tundikhel as Nepal marked its 19th Republic Day. International Ties: India laid the foundation stone for a hospital building in Manang’s Nason Rural Municipality with about Rs 56 million support. Sports/World: American Tyler Andrews set a new Everest speed record, summiting in 9 hours 55 minutes (verification pending).

Republic Day: Nepal marks 19th Republic Day with a public holiday and a ceremony at Tudikhel; this year the President is set to deliver the address after the PM sent a letter asking him to speak. Governance & Politics: Fresh debate swirls around Prime Minister Balen Shah’s parliamentary silence and absence, with the opposition pressing for answers while the government points to Finance Minister Swarnim Wagle speaking on his behalf. Foreign Service & Diplomacy: The Ministry of Foreign Affairs opens ambassadorial posts for public competitive applications for the first time, with vacancies across 17 missions. Health & Climate Resilience: Japan, UNFPA and Nepal unveiled a refurbished climate-resilient Bhur Health Post in Jajarkot to strengthen maternal and newborn care during disasters. Energy & Infrastructure: Korean envoy Park Taeyoung attended the Upper Trishuli-1 hydropower weir gate operation milestone in Rasuwa, while IPPAN urges hydropower work halted in Langtang National Park to resume. Justice & Courts: The Supreme Court faces a backlog of 22,000 cases as a junior justice is appointed chief justice, drawing protests from senior lawyers. Everest & Environment: On International Everest Day, coverage highlights overcrowding, waste and climate impacts, with calls for stronger management rather than a shutdown. Sports: Nepal’s women’s cricket team set up semifinal hopes after Indonesia posted 114/4 in the qualifiers.

Asian Games Cricket: Nepal’s women’s team kept rolling in the qualifiers, beating China by 19 runs and then Indonesia by four wickets to reach the semifinals, setting up a last-four clash after topping Group B. MMA Spotlight: Rabindra Dhant advanced to the Road to UFC Season 5 semifinals in Macau after defeating the Philippines’ Kimbert Alintozon, with a shot at a historic UFC roster spot next. Diplomacy Reform: Nepal opened ambassadorial recruitment to the public for the first time, moving toward a merit-based process with English proficiency made mandatory. Local Governance: Pokhara Metropolitan City began demolishing encroached structures near Prithvi Chowk bus park to reclaim public land and widen roads. Public Health & Safety: Kathmandu’s drinking water testing reportedly found hazardous microbes in over a quarter of samples, but testing was paused due to “constraints,” raising fresh monsoon fears. Sports Administration: Koshi Province Sports Development Board was fully constituted after eight months, with leadership split between UML and Nepali Congress. Economy & Infrastructure: The BP Highway reconstruction is accelerating with Japan’s support, while irrigation coverage continues to expand nationwide.

Fuel & Profits Debate: India’s fuel price hikes and OMC profit claims are back in focus after reports of big FY 2025/26 earnings, with analysts pointing to excise cuts and global price swings. Cancer Supply Chain: A Chitwan biotech firm says it has produced and exported raw materials for anticancer drugs like paclitaxel and docetaxel, with plans to expand exports to more Asian markets. Gold Watch: Gold fell Rs 5,500 per tola and silver also eased. Cooperatives Under Scrutiny: A government commission warns Nepal’s cooperative sector is sliding into crisis due to financial irregularities, weak regulation, and poor oversight. Finance for MSMEs: BII and Laxmi Sunrise Bank launch a $25m facility to expand formal credit for Nepal’s MSMEs, with a focus on women-led businesses. Human Rights: NHRC recommends prosecutions and further probes over alleged rights violations during the 8–9 Sept 2025 Gen Z movement. Energy Policy: The energy minister urges faster growth in domestic electricity use to avoid future debt risks. Weather: Cloudy skies with scattered thunder-rain expected in parts of the country. Culture & Diplomacy: Eid-ul-Adha greetings were extended by the President and VP; China’s ambassador met VP Yadav; Switzerland–Nepal friendship marked with a photobook launch.

Human Rights Watch: NHRC chair Top Bahadur Magar says the implementation of its recommendations is “not satisfactory,” while the commission also released its Gen Z movement report on Sept 8-9, recommending action against KP Oli, Ramesh Lekhak and Prithvi Subba Gurung and calling for probes into security failures and even social media figures. Digital Push: The Information Ministry claims progress under the 100-point reform agenda, including expanding an integrated government office system and adding services to the Nagarik App. Finance & Tech: Nepal’s mobile banking users hit 29.4 million and QR transactions crossed Rs 125 billion, as the Economic Survey highlights wider 4G and internet access. Energy & Fuel Security: Petroleum storage is enough for an average 16 days, but capacity varies sharply by province. Economy & Budget: Government will unveil the next budget at 4pm Friday. Tourism & Everest: Everest Summiteers Summit feted 176 climbers from 26 countries; Nepal also eyes a record Everest season as the climbing window nears end. Sports: Nepal women’s cricket team begins its Asian Games 2026 qualifier campaign against China. Road Safety & Crime: A jeep accident in Jajarkot left seven injured; CIB raided the Dairy Development Corporation and seized documents. Environment: WWF Nepal warns infrastructure projects overlap with 515 biodiversity important areas, risking habitat fragmentation.

Cancer Crisis: BP Koirala Memorial Cancer Hospital says a global supply disruption has left it short of key chemotherapy drugs Carboplatin and Cisplatin, with Cisplatin stocks exhausted months ago and Carboplatin running out earlier this month—doctors warn this could derail treatment plans and push patients toward unofficial, risky medicine sources. Parliament & Economy: The House of Representatives has begun amid a continued protest by the Shram Sanskriti Party over PM Balendra Shah’s attendance, while Finance Minister Dr Swarnim Wagle is set to unveil the Economic Survey for FY 2025/26 today. Health Diplomacy: Health Minister Nisha Mehta met Bhutan’s counterpart at the WHO World Health Assembly in Geneva, focusing on closer health-system cooperation. Local Payments: DDC has paid Rs 120 million to dairy farmers, clearing part of long-pending dues. Connectivity & Conservation: Nepal Telecom launched 4G in Makalu Base Camp routes, while a red panda health study begins in Myagdi and red-headed vultures were spotted again in Bardiya. Everest News: Bangladeshi climber Nurunnahar Nimni reached the Everest summit early today, becoming the third Bangladeshi woman to do so.

Diplomacy & Budget Prep: PM Balendra Shah met EU member-state ambassadors and other mission heads in Kathmandu/New Delhi, stressing policy continuity, stability, and “visible” improvements in daily life as budget talks intensify. Parliament Showdown: Speaker Dol Prasad Aryal says PM Shah will answer lawmakers’ questions after the budget speech, amid fresh opposition protests over the PM’s absence. Industry Push: RSP MP Bidushi Rana urged the government to declare manufacturing a national priority, calling for cheaper inputs, electricity relief, and tougher action against smuggling. Tourism Controls: Immigration and Tourism officials said “quality tourists” won’t come from free visas alone, backing a unique ID for foreign visitors to track movement while protecting privacy. Markets & Prices: NEPSE fell 9.24 points (turnover Rs 4.85b); egg prices rose again by Rs 15 per crate. Everest Pressure: A renewed debate follows another record summit day, with calls for tighter permit control and qualified climber screening. Cannes Buzz: Nepal’s “Elephants in the Fog” kept Cannes momentum as Goodfellas led sales with multiple awards.