Nepal targets 7% average growth and IT export push in new fiscal policy blueprint

Nepal’s government has outlined its fiscal 2026/27 agenda, focusing on economic transformation through IT service exports, hydropower, and governance reforms. The plan targets an average 7% real growth rate over the next decade, alongside a restructuring of tax systems and a renewed drive to attract foreign and diaspora investment.

The government of Nepal has presented its policies and programmes for the upcoming fiscal year, charting a course intended to restructure the economy and accelerate recovery. The plan, unveiled at a joint session of the Federal Parliament, commits to a decade-long average real economic growth target of 7 percent under a “New Phase of Economic Reforms.” Central to this vision is a shift away from dependence on labour exports toward a knowledge- and services-based economy, with information technology, hydropower, tourism, and high-value agriculture identified as key pillars.

According to official disclosures, the strategy includes declaring the IT sector a national strategic industry to promote exports in software, cloud services, and AI computation. To support this transition, the government announced structural changes to the investment climate. An “Investment Express” policy seeks to compress approval timelines to 30 days, while foreign investment laws will be amended to broaden the automatic approval route. A “Nepal Investment Visa” will be available for foreign investors meeting a specified threshold.

For financial governance, all transactions are slated for integration into digital platforms as part of a formalisation drive, alongside an expansion of double taxation avoidance agreements. The tax structure will be reviewed to ease the burden on entrepreneurs, and fragmented levies are proposed for consolidation into an integrated “green tax” system. The plan carries significant implications for infrastructure developers, energy investors, and digital economy stakeholders.

A target to produce 30,000 megawatts of electricity over the next decade will likely require amendments to environmental and forest laws. The capital market is earmarked for reform to enable participation from institutional investors and Non-Resident Nepalis, while a debt and bond market is intended to support long-term infrastructure financing.

For international businesses, the formalisation of payment gateways and simplified foreign currency taxation could reduce operational friction. These policies signal a broad effort to improve predictability and reduce production costs, though implementation remains dependent on legislative amendments and institutional capacity building.

The restructuring of the National Planning Commission and the proposed establishment of a National Enterprise Promotion Facility for MSMEs indicate an intent to institutionalize evidence-based planning and support for small enterprises.

For investors, the focus on digital infrastructure and energy projects clarifies priority areas, while the commitment to anti-money laundering standards and a digital audit system underlines a regulatory tightening that could affect compliance requirements.