About Nepal

Last Update On : 2015-03-18 Bookmark and Share


Map of Nepal

Nepal is a landlocked country on the southern slope of the Himalayas, located between China in the north and India in east, south and west- two huge countries with vibrant economies. Politically, it has been designated as a Federal Democratic Republic since May 2008. Nepal has been in transition since the decade-long conflict that ended in 2006, focusing its efforts in achieving sustainable peace, economic growth, employment generation, inclusive development, poverty alleviation, food security, and a reliable electricity supply. The government and private sector institutions have been addressing issues such as reforming the financial sector, strengthening the private sector's capacity, streamlining the private sector's development agenda, finding solutions to double-digit growth issues, and increasing industrialization based on trade competitiveness. Some of the initiatives undertaken in Nepal include:

  • Reforming business-related policies and procedures while ensuring industrial security and institutional reforms;
  • Developing industrial and commercial infrastructures and expanding services;
  • Expanding and promoting micro-, small- and medium-scale industries, while ensuring industrial peace; and
  • Focusing on tourism, hydropower, IT, agriculture, and mining industries, and creating an environment that utilizes the full capacities of existing industries.

Nepal has embarked on "Investment Year 2012-2013," with the aim of increasing Foreign Direct Investment (FDI). Some of the major steps undertaken include:

  • Establishment of the Nepal Investment Board;
  • Identification of potential sectors for investment, such as hydropower, tourism, infrastructure, agriculture, mining and quarrying, and IT;
  • Dedication by the government to create investor-friendly FDI policy reforms;
  • Creation of a one-window solution for potential investors in big projects; and
  • Provision of a separate industrial security force.

Nepal at Glance

Location: 26º22' North to 30º27' North and 80º4' East to 88º12' East

Time Zone: GMT + 5.45

Area: 147,181 Square Km.

Currency: Nepalese Rupee (NPR)

Official language: Nepali (English is widely used in business and profession)

Population: 26.49 million (Tarai: 50.3%, Hilly: 43.0%, Mountain: 6.7%)

Growth Rate: 1.35%

Population Density: 180 per Sq.km

Urban Population: 17%

Rural Population: 83%

Household Size: 4.88

Sex ratio: 94.2 (male per hundred female)

World Heritage Sites: Lumbini, Chitwan National Park, Sagarmatha National Park, Pashupatinath,
Swayambhunath, Bauddhanath, Changu Narayan, Kathmandu Durbar Square, Bhaktapur Durbar Square and Patan Durbar Square.

Source: Population Census, 2011,  www.cbs.gov.np, www.tourism.gov.np


Nepal is officially a secular state. Hinduism is the main religious faith among the majority of the Nepalese people, with Buddhism the second largest faith by number of followers (Nepal is the birthplace of Lord Buddha). Other religious faiths such as Christianity and Islam co-exist peacefully and harmoniously in Nepal. A rich cultural heritage and diverse cultural traditions are special features of Nepal. Nepal is a multi-cultural, multi-religious and multi-lingual society. More than 100 ethnicities are represented in Nepal, and approximately 70 languages are spoken.

Comparative Advantage

Nepal is located between two of the world’s most populous countries, India and China, with easy access to both vibrant markets. It has significantly lower tariffs on imports as compared with India, which can make Nepal an attractive location even to Indian investors. Other advantages in Nepal are affordable labor, high profitability, low land cost, and an accessible bureaucracy. Nepal is also entitled to preferential treatment in a number of developed-country markets.

The natural as well as cultural assets of Nepal also offer a substantial opportunity to investors. The country has a range of climatic conditions– from tropical to sub-arctic. The topography is generally mountainous in the north, hilly in the middle, and near sea level in the south. Nepal grows various agriculture products, medicinal herbs, and high-quality tea. There is also a huge potential for hydropower- approximately 43,000 MW is technologically feasible.

Market Size and Access

Nepal is small in size and population, and its domestic market is limited. However, its special relationship with neighboring countries offers significant access to the largest markets in the region. Nepal also has easy access to the world market. SAFTA and SAARC have been introduced as platforms for the Nepalese market. In addition, Nepal joined the WTO on April 23, 2004 to get benefit from global rule based multilateral trading arrangement.

Weather and Climate

Nepal’s weather is generally predictable and pleasant. There are four climatic seasons:

March to May:


June to August:


September to November:


December to February:


  • Nepal has a monsoonal climate, with an average annual rainfall of between 1,000 and 2,500 mm, 80-90% of which falls during the summer monsoon from June to September.
  • The average maximum temperatures during summer generally range from over 40oC in the lowlands to 20oC in the midland hills and 16oC at 4,000 m in the highlands.
  • In winter, much colder temperatures prevail at higher elevations.
  • The Kathmandu Valley, at an altitude of 1310 m, has a mild climate ranging on an average from 19-27oC in summer to 2-20oC in winter.


Road, electricity, irrigation, water supply and sanitation, housing and urban development, environment, alternative energy, and information technology are included in the infrastructure sector. It is necessary to develop safe, sustainable, economical, user-friendly, and environment- and climate-friendly infrastructure for the prosperity of Nepal.


There are two methods to enter Nepal: air or land transport.


Transportation is a prerequisite for development as it reduces regional disparity and fosters economic development and development of other sectors as well as delivery of services. The total length of motorable road is 25,599 km, of which 10,810 km is black topped, 5,925 km is graveled, and 8,864 km is earthen. (Source: Economic Survey: 2013-2014)

Air Network

Tribhuvan International Airport in Kathmandu is the only international airport in Nepal. It has direct air links with many countries, and a number of airlines have flights from various origins throughout the world to Nepal, each with either one or two stops and connecting flights.

Nepal Airlines, Qatar Airways, Thai, Etihad, Emirates, Lufthansa, Air India, and Singapore Airlines are the airlines that carry most of the foreign travelers into Kathmandu. PIA, Korean Air, Dragon Air, Air China, Air Arabia, Kingfisher, and Fly Dubai also conduct flights to Nepal.

There are many local airlines that connect Kathmandu to different locations of the country. Biratnagar, Birgunj, Pokhara, Nepalgunj, Bhairahawa, and Bhadrapur are the main cities of Nepal where local air connectivity is easily available. STOL (short takeoff and landing) services are also available to connect the capital city of Nepal from hill and mountainous areas.


Of the total cultivable land (2.641 million ha) of Nepal, only 1.766 million ha of land is considered to have potential for irrigation. Of this, irrigation facilities have reached 1.259 million ha (71.34%) land. Even in the areas with irrigation facilities, the facilities are often not available throughout the year. (Source: Economic Survey: 2013-2014)


Though there is an enormous potential for hydropower in the nation, only 746 MW of hydroelectricity has been produced so far. At present, only 67.26% of the population has access to electricity through hydropower, heat electricity, and alternative energy. (Source: Economic Survey: 2013-2014)

Information and Communication

At present, approximately 72% of the population has access to television services, 84% to radio broadcasting services. The number of telephone customers by mid February 2013 total number of telephone subscribers reached 19,615,076, of this the mobile users are more than 85%, with the telephone density of 74% of the population. There are six different telephone service providers. During this period, out of 489 FM stations licensed, 363 FM stations are operating. Likewise, 6,590 newspapers and magazines are published. (Source: Economic Survey: 2013-2014)

Urban Development

Nepal's urbanization is increasing rapidly. The national population census report of the 2011 finds the national population density is 180 per km2. However, the urban population density is 1,381/km2 and the rural population density is 153/km2. This disparity is the result of the decade-long conflict which caused massive migration from rural to urban areas in search of better services, facilities and security. Presently, approximately 17% of the total population is living in urban areas.

Population and Workforce

The population of Nepal according to the 2011 Census is 26.494 million with an annual growth rate of 1.35%. The population is ethnically and culturally diverse. The economically active population is 56.96%.. Based on the classification of industry:

  • 73.9% work in the agriculture sector and
  • 26.1% are engaged in non-agriculture sectors.

Nepal is a labor-surplus country that supplies unskilled, semi-skilled, skilled and highly-skilled labor to various labor-importing countries. The Tribhuvan University and other private universities produce skilled human resources. In addition to university courses, various skill-development courses are presented by a number of private and public institutions under the Council for Technical Education and Vocational Training in various fields. There is no shortage of trained human resources.


Since the 1950s, Nepal has made progress toward sustainable economic growth, and the country remains committed to a program of economic liberalization.
Agriculture remains Nepal's principal economic activity. This sector occupies almost one third of Gross Domestic Product (GDP) with about two third of country’s population are dependent in this sector. Contribution of this sector to GDP was 33.87 percent in fiscal year 2012/13, which is expected to remain at 33.10 percent in fiscal year 2013/14. In fiscal year 2070/71, the annual growth rate of agriculture sector is expected to be 4.72 percent at constant prices of 2000/01. Approximately 25% of the total area is cultivable; another 33% is forested and the rest is mountainous.

Rice and wheat are the main food crops. The lowland Terai region produces an agricultural surplus, part of which supplies the food-deficient hill areas. 
Real GDP at basic prices is estimated to grow by 5.2 percent in fiscal year 2013/14 against the target of 5.5 percent. Such growth rate in the previous fiscal year was 3.5 percent. Economic growth rate reached over 5.0 percent in fiscal year 2013/14 after last five years. There has been some progress in economic growth rate in current fiscal year due to favorable monsoon, gradual improvement in investment environment, the environment of political consensus and cooperation, among others.

GDP Growth Rate


Note: R = Revised, P = Projected

(Source: Economic Survey: 2013-2014)

Structure of Gross Domestic Product

Over the past several years there have been gradual changes in Nepal's economic structure, with a declining trend in the contribution of agriculture and industrial sectors and an increasing trend in the contribution of the service sector.

The sector that comprises agriculture, forestry, fishery, and mining and excavation stood at 37% in 2000-2001, and is estimated at 36.2 percent for 2010-2011.

The sector of GDP that comprises industries, electricity, gas, water supply, and construction (the industry group) is estimated to be 14.1% in 2010-2011, a reduction of 2.8 percentage points as compared to the figure of the fiscal year 2000-2001. The major reason for this is the decline of 6.1% in the contribution from the manufacturing sub-sector in 2010-2011, resulting in the reduction of 3.0 percentage points in this sector during this period.

The sector that comprises trade, transport, communication and warehousing, financial intermediation, real estate business, public administration and defense, education, health, and other community, social and personal services and other sectors remained at 49.8%, with the increment of 3.6 percentage points in GDP. However, the contribution in the current fiscal year is expected to be marginally lower than that of last four years. The contribution of the service sector to the GDP has been increasing due to the growth in the transport, public administration, education and other community service sectors among these sub-sectors.

Back To Top