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Nepal, a landlocked country situated between two major economies—India and China—faces numerous developmental challenges. Among them, the growing influence of informal trade stands out as a major obstacle to economic growth and institutional stability. While formal trade is regulated, taxed, and contributes to the state’s capacity, informal trade operates outside the law. It includes activities that are unregistered, untaxed, and often illegal. Over time, this shadow economy has become deeply embedded in Nepal’s economic structure. In many ways, Nepal suffers more from the harmful effects of informal trade than from any shortcomings in formal trade.

Informal trade in Nepal takes many forms. It includes the smuggling of goods such as gold, fuel, medicines, money laundering and electronics across open borders. It also includes unregistered businesses, undocumented labor, and transactions carried out entirely in cash to avoid tax and regulation. Nepal’s long and porous border with India, combined with difficult-to-monitor terrain in the north, makes informal trade easy to conduct and hard to control. On the domestic front, many small and medium-sized enterprises operate without any legal registration. As a result, they fall completely outside the formal economic system.

The scale of informal trade in Nepal is vast. Estimates suggest that the informal economy may account for 35 percent—40 percent of the country’s GDP and more than 80 percent of total employment. This means a large portion of Nepal’s economic activity is hidden from the state. It does not contribute to taxes, cannot be properly measured, and creates unfair competition for businesses that do comply with the law. While formal trade has its own inefficiencies—such as bureaucratic delays, red tape, and occasional corruption—these can be addressed through policy reforms. Informal trade, by contrast, creates deep and lasting damage that is harder to fix. It undermines public revenue, weakens institutions, and limits Nepal’s ability to plan and deliver services.

Addressing the informal economy is not simple, but it is necessary. A multi-pronged approach is needed—one that focuses on simplifying formal procedures, using technology, building trust, and offering real incentives for businesses and workers to shift into the formal system.

One of the first priorities should be to make it easier for small businesses to formalize. Many avoid registration simply because the process is slow, complex, and costly. Nepal should adopt a digital, one-window registration system that reduces paperwork and lowers barriers to entry. If formality becomes easier and less expensive, more businesses will join.

Another key step is improving border management. Nepal cannot control smuggling effectively using traditional methods alone. New technologies such as automated scanners, GPS tracking, and electronic cargo systems should be introduced. Just as important is cooperation with neighboring countries. Shared data and joint monitoring can help prevent illegal trade across borders.

The informal economy also depends heavily on cash, which makes transactions untraceable. Promoting digital payments is a powerful tool to reduce this dependence. However, digital infrastructure alone is not enough. The government must also invest in public awareness, digital literacy, and incentives to encourage both consumers and businesses to use digital platforms.

To support this shift, the state should reward those who comply. Businesses that register and follow regulations should receive benefits—such as tax breaks, better access to finance, and eligibility for government contracts. This changes the perception of regulation from being a burden to being a business opportunity.

Labor reform is another vital area. Most informal workers in Nepal lack legal contracts, benefits, or protections. To bring these workers into the formal economy, Nepal must design labor policies that fit the needs of small enterprises. Portable social security schemes, flexible contracts, and minimum wage protections should be introduced even for small and transitioning firms.

Overall, the informal economy reflects not just illegal behavior, but deeper problems in Nepal’s institutions and systems. It is not enough to use force or punishment. What Nepal needs is transformation—simple, transparent, and fair systems that encourage people to participate legally. Informality is often a result of necessity, not criminal intent. That’s why the government must respond with practical solutions that make formalization more attractive and accessible.

In conclusion, while informal trade may provide income and survival for many, it does long-term harm to Nepal’s economy. It limits tax collection, distorts markets, and weakens the foundations of good governance. Compared to formal trade, whose problems can be corrected through reform, informal trade creates much deeper challenges. If Nepal wants to build a resilient and inclusive economy, it must take bold steps to reduce the size and influence of its informal sector. By simplifying procedures, using technology, and offering clear incentives, the country can bring more of its economy into the formal fold—and unlock its full potential for growth and prosperity.

On September 4, 2025, the Government of Nepal decided to block social media platforms that have not been registered in Nepal. The decision has created a wave of divided opinions - some people argue that this is the right move to ensure accountability from social media platforms, while many civil society organizations, digital rights advocates, and concerned citizens have condemned it as a regressive step against digital freedom.

From my standpoint, while regulation is necessary, blocking platforms undermines the very freedoms we are trying to protect.

Registration is necessary - but blocking is not the answer

To put it straight: the debate is not about whether social media platforms should be registered in Nepal or not. They should be. These platforms are global companies making significant profits, also via operating in Nepal. Like any other company working here, they must comply with Nepali regulations, ensure transparency, and clearly state how and why they are collecting and using the data of Nepali citizens. That expectation is fair and necessary.

However, blocking access to unregistered platforms is not the right way forward. Social media has evolved into more than just entertainment or casual networking - it has become a central place for people to express themselves, connect with communities, access information, promote businesses, and even mobilize for social causes. For many, these platforms are now tied to their daily lives, their livelihoods, and their freedom of expression.

Cutting off access does not solve the underlying problem; it only punishes ordinary users.

The role of social media platforms

It is also true that social media platforms have a responsibility. If the Government of Nepal has been repeatedly asking them to register and they have not complied, these companies should at least provide a formal response or clarification. Ignoring regulatory requests only deepens mistrust and leaves citizens caught in the middle of a standoff between government and corporations.

Why blocking is a problem

Blocking social media platforms creates several issues:

Restriction of freedom of expression: Social media has become one of the most accessible means of voicing opinions, especially for young people, marginalized groups, and most people. Blocking platforms limits these freedoms.

Impact on small businesses and creators: Many Nepali entrepreneurs, artists, and small businesses rely on social media for promotion and sales. Blocking platforms threatens their livelihoods.

Disruption of information access: Social media is also a primary source of news and information. Shutting platforms risks creating an information vacuum, where misinformation and rumors can spread even faster.

Loss of connection for families: The Public relies on messaging apps and social media to stay in touch with family members living abroad or in distant parts of Nepal. Blocking these platforms directly affects family communication and emotional well-being.

Negative signal to the global community: Such a move portrays Nepal as hostile to digital rights and freedom, which can harm its reputation internationally.

It is true that the Government of Nepal has the authority to regulate companies operating within its borders. Demanding registration is within its rights, and restricting services for non-compliance is legally possible. But the way this authority is exercised matters. Choosing to block entire platforms is a policy decision - one that is not the most effective or rights-respecting. Smarter alternatives that protect both regulation and citizens’ freedoms are required to be considered.

What should have been considered

Instead of blocking access, the government could have taken more constructive steps:

Dialogue and Negotiation: Establish structured discussions with platform representatives, civil society, and experts to find workable solutions for registration and compliance.

Transparency in Process: Clearly communicate to the public what the requirements are, why they matter, and how citizens’ rights will be safeguarded.

Rights-Based Approach: Ensure that any regulation respects the constitutional right to freedom of expression and aligns with international human rights commitments.

Conclusion

Yes, platforms should register and comply. But blocking them for non-compliance is a disproportionate punishment that hurts ordinary Nepalis more than the companies.

Platforms must be accountable and transparent, but accountability cannot come at the cost of citizens’ digital freedoms. Blocking platforms is a blunt and regressive tool - it restricts expression, impacts livelihoods, and risks isolating Nepali citizens in the digital age.

A Question of democratic values: At its heart, this debate is not just about regulation, it is about the kind of digital future Nepal envisions. Are we moving forward on our constitutionally recognized democratic path, where freedom of expression and access to information are respected? Or slipping into a more control-oriented and regressive approach? Blocking platforms may seem like a quick solution, but it risks eroding the very democratic principles Nepali people have worked hard to build.

As a country, Nepal needs smarter, more balanced solutions - ones that demand responsibility from tech companies while also protecting the rights of the people who use them every day.

The US has presented two M28 skytrucks—one air ambulance and one regular skytruck—to the Nepal Army. The skytrucks were handed over as part of US’ Foreign Military Financing (FMF) grant.

US Ambassador to Nepal Dean R Thompson handed over the aircraft valued at $37m to Chief of Army Staff (CoAS) Ashok Raj Sigdel at a handover ceremony held at the Mid Air Base of Nepali Army located inside the Tribhuvan International Airport on Thursday.

The ceremony was attended by Minister for Foreign Affairs Arzu Rana, Minister for Defense Manbir Rai, US State Department’s Principal Deputy Director for Security Assistance Merrie A Archer, Defense Secretary Rameshwar Dangal, officials of Ministries of Foreign Affairs and Defense, defense attachés of the US Embassy and representatives of airplane manufacturer PZL Mielec, among others.

With these new additions, Nepal presently has a fleet of five skytrucks including two which were donated by the US in 2019 and one which Nepal purchased directly. It now possesses seven aircrafts, 15 helicopters and 40 pilots, according to Army sources.

During the ceremony, none of the speakers mentioned or referred to the United States Indo-Pacific Command (INDOPACOM) in their speeches. The event’s official backdrop, however, featured the INDOPACOM logo. This suggests that the aid comes under the regional command structure of the US military. The logo also signifies the official channel through which the aid was received to allow credit without causing headlines and controversy.

The skytrucks will be used for military purposes as well as for medical evacuation, disaster response and emergency rescue operations, the Nepali Army said.

Speaking at the program, Foreign Minister Rana expressed gratitude to the US government for strengthening the Nepali Army’s capacity in disaster response and humanitarian assistance. “This moment is significant not only for enhancing Nepali Army disaster response capabilities but also as a symbol of the enduring friendship and cooperation between Nepal and the United States. The United States has remained a steadfast development partner and a reliable friend of Nepal, supporting us in governance, humanitarian assistance, disaster response, peace keeping and capacity building.” She also commended the Army’s dedication, discipline and service. 

Ambassador Thompson highlighted that the two skytrucks mark an important addition to the longstanding friendship between Nepal and the United States. He also announced that the US would be donating two Bell 412 helicopters to the Nepali Army within the 18 months timeline as part of the continued support. The packages are part of the military aid worth approximately Rs 140m.

“These aircraft are more than machines—they are lifelines. They will help Nepal respond faster and better to emergencies in every corner of the country,” Ambassador Thompson said. “The delivery symbolizes just a small part of our broader security cooperation, which also includes training, exchanges, equipment transfers, and planning. It demonstrates our ongoing commitment to helping Nepal become more resilient, capable, and secure.”

The US ambassador also reaffirmed the United States’ commitment to supporting Nepal’s ability to respond quickly to crises and protect its people, building on 78 years of diplomatic relations between the United States and Nepal since 1947. “The handover underscores America’s enduring commitment to strengthening Nepal’s resilience, security, and disaster response, he said. “These additions will strengthen the Army’s capacity for disaster response, medical evacuations, and humanitarian missions, helping to save lives across the country,” he said.

CoAS Sigdel said that these skytrucks will be instrumental in helping the Army during disaster response and humanitarian assistance. He said that the Army is deeply committed to peace, stability and humanitarian efforts in the country.

Produced by Lockheed Martin’s Polish subsidiary PZL Mielec in 2025, these aircraft are especially suited to Nepal’s beautiful yet challenging terrain. Their short takeoff and landing capability allows them to operate from remote and rugged airstrips.

The first aircraft, with tail number NA-069 is a standard skytruck and has a passenger capacity of three crew members and 18 passengers. It can also be used for para-jump operations, accommodating 16 paratroopers and a jump master. For medical evacuation, it can carry six stretchers and four seating casualties. The aircraft has a payload capacity of 2,000 kilograms plus an additional 300 kilograms in the under-fuselage baggage pod. Its maximum takeoff weight is 7,500 kilograms, cruising speed 150 knots (278 km/h), service ceiling 25,000 feet, and endurance of four hours and 30 minutes.

NA-068 is a skytruck with air ambulance configuration. One intensive care platform along with four seat casualty accommodation are installed in it. With the same payload as the regular skytruck, i.e. 2,000 kilograms with an additional 300 kilograms in the under-fuselage baggage pod, its max takeoff weight is 7,500 kilograms with cruise 150 knots (278 km/h), service ceiling 25,000 feet, and four hours 30 minutes endurance.

Apart from delivering the aircraft to Kathmandu, the PZL Mielec is also responsible for flight training, supply of spares, medical supplies, technical help and ferry services.

Prime Minister KP Sharma Oli’s recent visit to China for the Shanghai Cooperation Organization (SCO) Summit and the Victory Day Parade has drawn significant attention in political and strategic circles.

Following Oli’s meeting with President Xi Jinping, China issued a news release claiming that Nepal supported the Global Security Initiative (GSI), a claim quickly dismissed by Nepali officials. Foreign Secretary Amrit Rai clarified to the media that no such agreement had been reached. 

Criticism also emerged over Oli’s participation in the Victory Day Parade, with some arguing it could upset Japan, Nepal’s long-standing development partner. However, Oli’s decision to raise the Lipulekh issue with Chinese President Xi has been well received at home. UML leaders are already seeking to capitalize on this move, framing it as a matter of “nationalism” ahead of upcoming elections.

At the SCO, Nepal expressed its willingness to become a full member, providing Oli with the opportunity to engage directly with leaders from China, Russia, India, and beyond. During the summit, Oli stated that Nepal supports the Global Governance Initiative (GGI), a new proposal by Xi. On broader security strategies such as the GSI, Nepal has reiterated its consistent position: it will not join any military or strategic alliance.

Attention is now turning to Prime Minister Oli’s upcoming visit to India, likely at the end of this month, though the trip may be delayed. As in Beijing, Oli is expected to raise the Lipulekh issue with Indian Prime Minister Narendra Modi. The timing is significant as the India-China agreement on Lipulekh pass has created a favorable environment for Oli to raise the matter with both neighbors. His handling of this issue in New Delhi will be closely watched at home.

To prevent possible misunderstandings with coalition partner Nepali Congress (NC), Oli included senior NC leader Purna Bahadur Khadka in his China delegation. As a result, NC leaders have remained largely silent on controversies surrounding the GSI and other issues. Over recent months, NC’s criticism of China has softened, reflecting a gradual rapprochement after a period of strained ties between 2015 and 2020.

Meanwhile, CPN (Maoist Center) Chair Pushpa Kamal Dahal reiterated that the border dispute with India should be resolved through diplomatic talks. 

Within Oli’s CPN-UML, preparations are underway for the party’s statute convention starting Friday. Speculation is growing over whether the party will reconsider former President Bidya Devi Bhandari’s membership. While Oli and the leadership appear unwilling to reinstate her, senior leaders like Surendra Pandey and Yubaraj Gyawali have expressed support for her return. 

In Parliament, the Rastriya Prajatantra Party (RPP) and Rastriya Swatantra Party (RSP) have continued their boycott for over 100 days, demanding a high-level panel to probe into visit visa corruption. Although the Maoist Center initially joined their protest, it later compromised with ruling parties, leaving RSP and RPP with limited leverage due to their smaller numbers.

Within the CPN (Maoist Center), senior leader Janardhan Sharma is under pressure after questioning party chairperson Dahal’s leadership. He has also been targeted by a deepfake video alleging he is working at Oli’s behest, a claim he blames on Dahal’s inner circle. Deepfakes are increasingly troubling Nepali politics: RSP Vice-chair Swarnim Wagle has also filed a case at the cyber bureau, saying he too has been victimized.

Party disputes remain unresolved within the RPP, where tensions between president Rajendra Lingden and senior leader Dhawal Shumsher Rana have delayed the party’s central committee meeting. The conflict intensified after Lingden expelled several leaders aligned with Rana.

In legislative developments, the National Assembly has finally endorsed the long-debated Federal Civil Service Bill after years of disagreements between government and opposition. Separately, Nepal’s Immigration Department has announced a new digital tracking system for foreign tourists, beginning Sept 17. Visitors staying in star hotels will be required to register their personal details via a mobile app.

Tourism numbers continue to rebound. In August 2025, Nepal welcomed 88,680 tourists—a 22 percent increase compared to last year. India topped the list with 35,505 visitors, followed by China (7,533), the US (6,068), Sri Lanka (5,956), and Bangladesh (4,262). From January to August 2025, total arrivals reached 736,562.

Another significant government move this week came in the digital sphere. The Cabinet has decided to ban social media platforms that have not registered in Nepal. According to the Ministry of Communications and Information Technology, platforms like Facebook face restrictions for failing to comply with registration requirements. 

The decision follows a Supreme Court writ of mandamus directing the regulation of such platforms. Minister Prithvi Subba Gurung’s secretariat confirmed that the ministry will now enforce the ban. Experts warn the decision could disrupt content creators and businesses, while also undermining Nepal’s broader digital aspirations.

In the financial sector, Nepal’s 10 largest commercial banks have agreed to undergo international audits, with findings to be made public—a long-standing demand of the International Monetary Fund to address bad loan practices. The Nepal Rastra Bank (NRB) will ensure an in-depth inspection of these banks.

The NRB has also introduced stricter rules on the use of CSR funds, requiring banks and financial institutions to channel them exclusively toward poverty alleviation and priority sectors.

In law enforcement, police have busted a human trafficking ring that used to smuggle Nepalis to India to sell their kidneys. The ringleader, Shyam Krishna Bhandari, and his associate have been arrested. Victims were reportedly lured from districts including Sindhupalchok, Kavre, Sindhuli, Nuwakot, and Dhading.

Finally, Nepal has achieved a new milestone in energy exports. According to Energy Minister Deepak Khadka, the country is now exporting over 1,130 MW daily to India and Bangladesh. If this trend continues, annual earnings could exceed Rs 86.38bn.