The Economy Nepal Built, And the One It Still Needs

Twenty-five years ago, when this magazine first went to print, Nepal's economy was held together more by habit than by design. Trade moved largely through informal channels, banks were technically insolvent, and a single state-run telephone provider controlled who could connect and at what price. In those days, the cinema seats were uncomfortable, the roads were unpredictable, and ordering food required patience, luck, and a landline. Exports were modest, imports were manageable, and the idea of a Nepali company listing on the NASDAQ felt like a joke used to lighten the mood. While a great deal has changed since then, the most fundamental question facing the country's economy remains has not.

The past quarter-century has been a story of scale without transformation. The economy has certainly expanded, but it has not fundamentally evolved. Nepal grew, but not in a way that made that growth self-sustaining. Trade volumes surged and government spending has exploded more than 18-fold. Remittances have multiplied from Rs 47 billion to over Rs 1.7 trillion, while public debt has climbed to nearly Rs 2.7 trillion. By every headline measure, the economy is bigger, deeper, and more monetized than when we began covering it.

But the underlying pattern has barely shifted. Nepal earns abroad, spends at home, and borrows to fill the gap. Exports have grown from Rs 56 billion in 2000 to Rs 277 billion in 2024 - a meaningful rise in absolute terms. But they have failed to keep pace with an import bill that has expanded from Rs 116 billion to over Rs 1.8 trillion over the same period. The trade deficit has widened from Rs 60 billion to more than Rs 1.5 trillion. Remittances, not production, have kept the external sector afloat. The economy did not fail to grow, it failed to transform.

That is not a pessimistic conclusion. It is simply the starting point for understanding what Nepal has achieved. verdict is not a counsel of despair. It is, rather, the essential context for understanding what has actually been built. Because much has been achieved. The private sector's story of these 25 years is not just one of missed opportunities. It is also one of remarkable construction-of systems created where none existed, markets opened where none were imagined, and habits changed in ways that have quietly reshaped how Nepalis live, spend, and move.

Consider what has happened in the sectors this magazine has tracked most closely. Formal remittance networks replaced informal flows. Entrepreneurs like the Dhakals of IME Group used that capital to build banks, insurance companies, digital wallets, and tourism businesses. Min Bahadur Gurung took a fragmented retail market and imposed on it the discipline of scale, stock control, and supply chain logic, building 27 stores from Birtamod in the east to Nepalgunj in the west. Dileep Agrawal helped make internet access a utility rather than a luxury. Biswas Dhakal, starting with just four computers and a college project, built the software infrastructure that now powers much of Nepal's banks and digital payment platforms. Binod Chaudhary, the country's only Forbes-listed billionaire, took a Nepali trading house global, expanding across 30 countries and redefining the scale of Nepali corporate ambition.

New generation of entrepreneurs have changed the texture of everyday life. A digital calendar for the diaspora became one of Nepal's most-used apps. A Facebook page tracking city shutdowns grew into a news platform followed by millions. A food delivery startup change how people order meals and normalized an entirely new relationship between restaurants and customers. A ride-hailing startup, despite regulatory hurdles, opened the door for an urban mobility market that now includes Pathao, inDrive, and Yango with even Uber is interested. A cinema rebuilt with better seats and a higher ticket price proved that Nepali consumers would gladly pay more for a better experience. Taken together, these are not footnotes to the economic story. They are the story in themselves.

The same 25 years that produced a persistent and widening trade deficit also saw a Nepali entrepreneur list his company at the NASDAQ. The same period, which saw garment factories shutter en masse after quota protections ended, also marked a period when cement exports began, IT services accelerated, and electricity trade with India moved imports to exports. The same fiscal system that became increasingly dependent on import-driven revenue also financed infrastructure at a scale that simply did not exist before.

A new generation of entrepreneurs has reshaped everyday Nepal is not one economy. It is several, moving at different speeds, and in different directions, with different degrees of structural coherence. This is the central argument of this anniversary edition argues. The next 25 years will depend less on whether Nepal can grow and more on how it chooses to grow. The old model, sustained by labor exports, import-driven consumption, and public spending that fills gaps left by a weak productive base, has been resilient. It survived the Maoist insurgency, the 2015 earthquakes, a global pandemic, and repeated political instability. It will probably survive future shocks as well.

But resilience is not a growth strategy. No country can indefinitely rely on its own people working abroad to remain solvent. A fiscal system built heavily on customs revenue is vulnerable to exactly the kind of external shock that remittances themselves represent. The structural reality is not new. This publication has returned to these themes repeatedly over the past 25 years. What is new is the range of possibilities now within rich. Electricity exports are becoming a reality. Digital payments are deeply embedded in everyday life. The capital market has genuine retail participation. The IT sector is serving global clients. A generation of entrepreneurs has shown, repeatedly, that Nepali consumers want better and embrace quality when it is offered. The fault lines are real. But so are the frontiers.

As we mark 25 years of reporting on the Nepali economy, we do so with the conviction that the most important stories are still to be reported. Nepal has shown that it can build. The challenge now is to build differently-to move from an economy driven by consumption to one driven by production. That transition has already begun. This edition is both a record of how far Nepal has come and a reminder of how much further it still needs to go.

This was published in the May 2026 issue of New Business Age magazine.