AGP Executive Report

Nepal–India Diplomacy Reset: Foreign Minister Shisir Khanal wrapped up a three-day New Delhi visit and said Kathmandu will resolve border disputes through existing bilateral mechanisms, stressing “no boundary is too complex” if talks are held with an “open heart” and mutual respect, while also clarifying Nepal is not seeking UK mediation—only access to historical archives. Cross-Border Digital Payments: Nepal and India launched direct cash transfers by linking India’s UPI with Nepal’s National Payments Interface, enabling bank-to-bank remittances and QR-based payments for Indians in Nepal. Border Tech & Trade: India’s Home Minister Amit Shah will launch the Land Port Management System on June 9 to digitise land-port clearance and reduce delays. Health Policy: Nepal’s Health ministry says it is preparing amendments to the health insurance law to make the scheme more effective from the new fiscal year. Anti-Graft Probe: CIAA has begun investigating UML leader KP Sharma Oli’s private secretary Rajesh Bajracharya over suspected illicit assets. Energy & Cost of Living: India’s LPG price hike is defended by India’s petroleum ministry as domestic gas remains among the world’s cheapest despite global shocks. Climate & Himalaya Safety: World Environment Day remarks warned climate change is making Himalayan mountaineering more dangerous; Sagarmatha Ascenders’ Association urged government action on rising insecurity affecting foreign climbers. Tourism Investment: Marriott and CG Hospitality will develop two luxury hotels in Kathmandu (Ritz-Carlton and Westin), targeting openings by 2031.

Nepal-India Diplomacy Reset: Foreign Minister Shishir Khanal wrapped up talks in New Delhi, urging border disputes to be handled through diplomacy and “open heart” dialogue, while pointing to the 1816 treaty and saying Lipulek, Limpiyadhura and Kalapani are Nepali territory. Digital Cooperation: India and Nepal signed an MoU to advance multilingual Language AI and open Digital Public Infrastructure via BHASHINI and Kathmandu University, including a voice-first translation ecosystem and cross-border digital inclusion. Cross-Border Payments: The two sides launched UPI–NPI peer-to-peer linkage to ease personal remittances between the countries. Food Safety Push: Health and Food Safety Minister Nisha Mehta marked World Food Safety Day by promising stronger implementation of the Food Hygiene and Quality Act, lab upgrades, and risk-based market monitoring. Public Health Capacity: A new free health portal aims to show real-time availability of free hospital beds, amid ongoing concerns over doctor shortages. RSP Party Organising: Rastriya Swatantra Party continued district conventions, with leadership elections reported from Parbat and Koshi Province, and provincial convention procedures finalized. LPG Politics in India: India defended the Rs 29 LPG hike, saying households still pay among the lowest globally due to subsidies and government absorption of under-recovery. Climate Action Locally: Youth in Shuklaphanta pledged practical climate and environment steps, including tree planting and reducing plastic pollution.

Nepal-India Diplomacy: Foreign Minister Shisir Khanal met EAM S. Jaishankar in New Delhi, with both sides reviewing bilateral ties and pushing a “decisive shift” toward deeper cooperation; Khanal said Nepal carries “no old baggage” and wants substantive, result-driven engagement. Cross-Border Payments & Digital Links: India and Nepal launched a UPI–NPI linkage for cross-border personal remittances and witnessed MoUs for a “voice first” language translation platform. Aid & Heritage Handover: Jaishankar virtually handed over 72 health facilities and 12 cultural heritage projects under the 2015 earthquake reconstruction programme. Governance & Public Institutions: In Nepal, Information and Communications Minister Dr. Bikram Timilsina said malpractices like favoritism and middlemen influence are being dismantled, with decisions guided more by institutions than individuals. Party Restructuring: Rastriya Swatantra Party (RSP) held district conventions and leadership elections in 38 districts ahead of its first national convention in Chitwan. Everest Survival Story: Mountaineer Dawa Sherpa, rescued after nearly a week on Everest, told reporters he “chewed ice” to stay alive. Aviation Safety: CAAN issued stricter monsoon operating rules effective June 15, including tighter weather checks and limits near thunderstorms.

Everest Rescue Update: Dawa Sherpa, 57, who survived nearly a week on Mount Everest, says he “chewed ice” to stay alive after oxygen ran out, as he recovers in Kathmandu. Climate & Environment: Minister Gita Chaudhary urged climate-resilient, nature-friendly development on World Environment Day, while 80,000 children joined “One Child, One Tree” across 46 municipalities. Public Services Under Pressure: Health Minister Nisha Mehta ordered urgent action to fix medicine shortages, including cancer drugs, with tighter monitoring and faster approvals. Education Shift: Government school enrolment fell to 62.2% in 2025/26 as private schools rose, driven by migration and demand for English-medium education. Energy & Daily Life: NEA scheduled up to four-hour power cuts in nearly 100 Kathmandu/Lalitpur locations for substation maintenance. Justice & Governance: An inquiry panel cleared former Home Minister Sudan Gurung of corruption allegations, paving the way for a possible return; meanwhile, a senior secretary Krishna Hari Pushkar was questioned over an alleged ambassadorial message and transferred to a reserve pool. Public Safety & Crime: A man was arrested in Balaju for allegedly killing his wife during a domestic dispute. Road Safety Law Stalled: Nepal’s road safety act has been stuck for eight years, blamed on parliamentary dissolution after Gen-Z protests. Regional Ties: Foreign Minister Shishir Khanal met BJP leader Dr. Vijay Chauthaiwale in New Delhi, discussing deeper Nepal-India political and people-to-people links. Economy & Prices: Poultry farmers raised egg support prices again, pushing retail prices to around Rs 25 per piece.

India-Nepal Border Row: PM Balendra Shah’s “encroached territory” remarks have triggered protests and a fresh diplomatic backlash, with India reiterating there is “no role for any third parties” and stressing bilateral mechanisms while Nepal clarifies the issue is tied to no-man’s-land segments and river shifts. Diplomacy: Foreign Minister Shishir Khanal is in New Delhi for talks with EAM Jaishankar on trade, connectivity, energy and people-to-people ties, while RSP leader Rabi Lamichhane returns from a five-day India visit focused on “development diplomacy” and border handling via gradual diplomacy. Governance & Law: Government formed probe committees over (1) seizure of 779 EVs over suspected revenue evasion and (2) procurement of satellite services at PSB amid questions on fiscal discipline and conflict of interest. Digital & UN Cooperation: Communications Minister Dr Bikram Timilsina met UN agencies on cyber security, media reform and digital service delivery, including strengthening Nagarik App and government IT systems. Public Services: TIA extended “pick and drop” free parking to 15 minutes; Kathmandu held ward-level orientation on curbing human trafficking. Economy & Connectivity: Himalaya Airlines launched direct Kathmandu–Shenzhen flights; Uber officially entered Nepal. Health & Rights: Nepal Medical Association demands overtime calculation and better benefits for doctors. Environment: World Environment Day is marked nationwide with a nature- and climate-friendly development theme. Sports: SAFF Women’s Championship final today—Bangladesh vs India.

Constitutional Amendment Talks: A task force drafting constitutional changes held meetings with former presidents Dr Ram Baran Yadav and Bidya Devi Bhandari, collecting recommendations on keeping the constitution’s core pillars intact while updating for new demands. Election Commission Proposals: The Election Commission has urged constitutional amendments to make local elections non-party and to restructure the commission by reducing commissioners and adjusting election-date provisions. Foreign Policy Reset: Foreign Minister Shishir Khanal is set to visit India (June 5–7) for talks with Jaishankar, as Nepal seeks to manage fallout from PM Balendra Shah’s border remarks and keep bilateral cooperation on trade, connectivity, energy and people-to-people ties. Bureaucracy Under Strain: Police released Secretary Krishna Hari Pushkar after questioning over a message sent to PM Shah’s personal number about applying for an ambassador post, reigniting debate on administrative chain-of-command. Governance Capacity Gap: A separate report warns that axing political appointments has left key constitutional bodies short of decision-makers, with the Constitutional Council not meeting despite vacancies. Everest Rescue: Missing Sherpa Dawa Sherpa was rescued alive near Crampon Point and airlifted to Kathmandu for treatment. Public Safety: Three grenade bombs were found in garbage at a Pokhara waste disposal site; police secured the area and bomb disposal was mobilized. Local Administration: KMC ordered six cooperatives to vacate rented office spaces within 15 days. Human Rights Row: UML says it will challenge the NHRC report on the Jenji movement in court, calling it biased and malicious. International: UNIFIL reported a Serbian peacekeeper death and minor injuries to two Spanish soldiers after a mortar attack near Marjayoun.

RPP Split: Nepal’s royalist Rastriya Prajatantra Party has formally split, with Dhawal Shumsher Rana leading a breakaway faction after months of infighting; Supreme Court: In a separate party dispute, the Supreme Court ruled in favour of Upendra Yadav in the JSP-N split case, ordering the Election Commission’s registration of Ashok Rai’s faction as unlawful; Foreign Affairs: Nepal’s FM Shisir Khanal will visit India from June 5–7 for talks with Jaishankar on trade, investment, connectivity and energy, amid heightened sensitivity after PM Balendra Shah’s border remarks; Dalit Rights: Speaker Dol Prasad Aryal and Minister Sita Badi renewed calls for stronger implementation to end caste discrimination and untouchability, stressing social awareness plus economic empowerment; Transport & Licensing: Smart driving licenses are nearing completion as printing of 1.57 million cards is done, with remaining cards expected in 2–3 weeks; Energy Delivery: Government targets at least 10 transmission lines within a year, including key 400 kV and 132 kV projects to speed up power system expansion; Sports & Governance: Nepal’s cricket body apologised after a “timed out” dismissal of Bhutan’s Ritshi Choden, saying it was legal but against the spirit of cricket; Everest Rescue: Sherpa guide Dawa Sherpa was found alive after nearly a week missing on Everest, surviving without food or oxygen and receiving treatment in Kathmandu.

Parliament Rules & Accountability: The House of Representatives passed new Rules of Procedure, 2083, aiming for more discipline and faster impeachment timelines, but critics warn some provisions shield lawmakers from asset scrutiny and weaken accountability. Constitutional Appointments Stalled: The Constitutional Council has stayed inactive for weeks even after an ordinance eased quorum, leaving key posts vacant and forcing acting leadership. Asset Probe Commission Limits: A new asset investigation commission mandate excludes sitting ministers, first-time MPs, the judiciary, the Nepali Army and constitutional bodies, narrowing scrutiny to former officials and police. Nepal-India Diplomacy Reset: Rastriya Swatantra Party chair Rabi Lamichhane’s India visit included meetings with Modi, Jaishankar and Amit Shah, with a push for “development diplomacy” and better connectivity. Border & Trade Measures: Nepal raised the customs exemption threshold for land-route cross-border purchases to Rs 500 (from Rs 100), while 750 unplated electric vehicles were seized at the Nepal-China border. Infrastructure Push: Finance Minister Wagle flagged a “Sunset Law” to cut legal delays in infrastructure projects. Social Justice: President and Vice President renewed calls to end caste discrimination and untouchability beyond legal provisions; a Mugu woman remains without citizenship, blocking access to services. Sports & Society: Nepal’s SAFF Women’s campaign ended in the semifinal after a 1-2 loss to Bangladesh; a World Bicycle Day rally drew about 700 cyclists in Kathmandu.

Japan-Loan Boost for Nagdhunga Tunnel: Nepal and Japan signed an additional ODA loan of JPY 5.7 billion for the Nagdhunga Tunnel Construction Project, taking the total to over JPY 22 billion; the 2.68 km tunnel is in the final phase (about 99% physical progress) and is expected to open to the public in July 2026, aiming to ease Kathmandu connectivity. Nepal-India Border Row in Parliament: Nepal’s National Assembly adjourned after lawmakers obstructed proceedings over PM Balendra Shah’s remarks on the India border issue; NA members urged a restrained, facts-based diplomatic approach, while the government said the remarks relate to cross-border occupation. RSP Leader Meets Modi: Rastriya Swatantra Party chair Rabi Lamichhane met Indian PM Narendra Modi in New Delhi; Modi reiterated Nepal as a priority partner under the Neighbourhood First policy and backed a “new era of development diplomacy.” Health Governance Update: The Medical Education Commission decided to re-issue its past directives and procedures after legal changes made them ineffective, and the Health Ministry placed high alert measures to prevent Ebola entry, including surveillance at entry points. Budget Process Scrutiny: The Finance Bill was revised multiple times within days, drawing criticism over transparency and procedure. Private Sector Reaction: Industry groups like FNCSI and CNI said the budget could lift confidence and support industrial promotion, while stakeholders remain divided.

Budget Debate: Finance Minister Swarnim Wagle defended Nepal’s FY 2026/27 spending at Rs 2.124 trillion, saying it is about 28.5% of GDP and “modest” versus past years, while experts question the revenue target. Judicial Reform: Newly appointed Chief Justice Dr. Manoj Kumar Sharma pledged good-governance and faster, quality justice delivery, outlining an action plan for reforms. Nepal–India Border Row: India’s MEA reiterated the dispute is strictly bilateral, noting 98% of demarcation is done and rejecting any third-party role after PM Balen Shah’s remarks. RSP India Outreach: Rastriya Swatantra Party chief Rabi Lamichhane met India’s Home Minister Amit Shah and External Affairs Minister S. Jaishankar, focusing on development ties and people-to-people links. Anti-graft/Property Checks: The Property Inquiry Commission reported 250+ complaints against senior officials in two weeks as property declarations continue. Infrastructure Boost: Japan/JICA added a JPY 5.7 billion loan for the Nagdhunga Tunnel, now ~99% complete, aiming to open in July 2026. Tourism & Connectivity: Nepal welcomed 102,626 foreign visitors in May (+19% YoY), and Himalaya Airlines announced direct Kathmandu–Shenzhen flights from June 4. Climate/Health: Heat Action Day 2026 in Kathmandu urged simple indoor heat protections like water, shade and rest.

India-Nepal Border Row: India’s MEA says nearly 98% of the boundary is demarcated and rejects any third-party role after PM Balendra Shah’s remarks on “encroachment,” citing unresolved segments, Gandak River shifts, and joint mapping of cross-border occupation. Parliament Turmoil: Nepal’s HoR and NA sessions were repeatedly disrupted/adjourned as opposition, led by Nepali Congress, demanded Shah’s statement be expunged or backed by facts; NC also plans to boycott parliamentary committee meetings. RSP India Outreach: Rastriya Swatantra Party chief Rabi Lamichhane met India’s External Affairs Minister Jaishankar and Home Minister Amit Shah, discussing development partnership and people-to-people ties amid border tensions. Land Governance Reset: The cabinet formed a new Land Problem Resolution Committee after dissolving the previous land commission, aiming to tackle landless and squatters’ issues under updated legal provisions. Infrastructure Fast-Track: Government is drafting a “sunset law” to cut delays in major projects by resolving land compensation, tree-felling permits, and access to construction materials. Budget Watch: Finance Minister Swarnim Wagle tabled the Rs 2.124 trillion FY 2026/27 budget targeting 7% growth, with major tax and financial reforms. Social & Environment: NA Vice-Chair pushed for gender-responsive food security and biodiversity governance; UNESCO Kathmandu began listing intangible heritage in Thame, Solukhumbu.

Budget Accountability & Governance: PM Balendra Shah defended the government’s good-governance push in his first Federal Parliament address, responding on corruption, squatters and the border row, while critics keep pressing for stronger public-facing action. Budget Cuts & Priorities: The government slashed funding for “national pride” and strategic infrastructure, including a zero allocation for railway/metro plans, drawing fresh questions on long-term development. Economic Debate: Economist Dr. Govinda Nepal said the budget won’t revive the economy and criticized gaps for the poor, small farmers and senior citizens, while private-sector leaders welcomed “positive signals” but want more complete reforms. Tax & Cost of Living: New “green tax” on smartphones and smartwatches is set to raise prices, and VAT on electricity remains a live political issue. Procurement & Corruption Watch: Intermediaries are accused of defrauding the state treasury through inflated e-passport procurement variations, adding to the week’s corruption-and-procurement scrutiny. Agriculture Incentives: The budget unveiled incentives for commercial farmers (including grants for larger investments), farmer identity cards, land banks and subsidy controls. Politics & Diplomacy: Rabi Lamichhane met BJP chief Nitin Nabin in New Delhi, signaling party-to-party outreach amid regional sensitivities. Connectivity & Trade: Himalaya Airlines announced direct Kathmandu–Shenzhen flights from June 4, aiming to boost tourism and business links. Court & Rights: A court order released NephroPlus CEO Jyoti Prakash Pandey, described as a “moral victory” amid concerns over politically motivated detention. Business & Society: FNCCI and SME leaders urged stronger support for small and medium enterprises, while stories also highlighted livelihood shifts in traditional Kumhar clay work through modern training. International/UN: UN honoured 550+ Indian peacekeepers in South Sudan with the Medal of Honour.

Border Row in Parliament: Nepal’s PM Balendra Shah sparked a fresh political storm after saying Nepal had “encroached” on Indian land, prompting opposition demands for evidence, apology, and even removal of his remarks from parliamentary records; Nepal’s Foreign Ministry later clarified he meant “cross-border occupation” and no-man’s-land disputes, while lawmakers in both houses disrupted sessions and pushed for resignation or expunging the statement. US-Nepal Digital Push: US Under Secretary Sarah B. Rogers wrapped up a Nepal visit stressing stronger US-Nepal partnership on digital infrastructure, investment climate, tourism, and cyber cooperation, including meetings with Foreign Minister Shishir Khanal and Communications Minister Dr Bikram Timilsina. Electricity VAT Debate: The government defended plans to levy VAT on electricity consumption above 50 units, saying it will fund grid and infrastructure upgrades, while critics warn of fairness and household impact. Energy Build-Out: Budget plans target an extra 1,040 MW generation capacity next FY and completion of multiple transmission lines, with Rs 70bn earmarked for under-construction grid works. Nepal-China Connectivity: Himalaya Airlines announced direct Kathmandu–Shenzhen flights starting June 4, aiming to boost business and inbound tourism. Budget Politics & Economy: Finance Minister Swarnim Wagle faced scrutiny over ambitious revenue and growth targets amid capacity limits, as parties continued to debate the FY 2083/84 reform agenda. Sports & Society: Nepal booked SAFF Women’s Championship semis with a 2-0 win over Sri Lanka; meanwhile, measles outbreaks and vaccine shortages remain a concern in multiple districts.

Border Row in Parliament: Prime Minister Balendra Shah’s claim that Nepal has “encroached” on Indian territory sparked backlash, with Nepal’s Foreign Ministry later clarifying it referred to cross-border occupation and Dasgaja no-man’s land around areas like Susta, Limpiyadhura, Lipulekh and Kalapani, and that the fixed boundary principle applies in riverine stretches. Political Fallout: The NCP condemned the remarks as irresponsible and against sovereignty, while lawmakers pressed for explanations in the House during Shah’s first appearance since taking office. Budget Politics & Cost of Living: The FY 2026/27 budget drew criticism for ignoring lower-income concerns, including a new VAT on electricity use above 50 units; PM Shah said VAT revenue will fund grid and infrastructure upgrades. Digital Push: India’s UPI hit record May figures (23.2 billion transactions; value near ₹30 lakh crore), underscoring the region’s fast-moving digital payments trend that also affects Nepal’s cross-border economy. RSP India Visit: Rastriya Swatantra Party released Ravi Lamichhane’s India schedule (June 1–5) for meetings with BJP leadership. Tourism Pressure Abroad: Reports say Iran-war fuel-price spikes are already hitting Asia’s tourism season, with airlines cutting routes including those serving Nepal. Sports: Kushal Bhurtel made T20I history with six sixes in an over vs China as Nepal posted 313/2.

Border Diplomacy: PM Balendra Shah’s Parliament remarks that “Nepal has also encroached” on India’s land over Lipulekh-Limpiyadhura-Kalapani triggered a fresh row, with Nepal’s Foreign Ministry later clarifying it refers to “no-man’s land” encroachment and cross-border occupation, and saying technical teams are mapping border issues; Shah also said talks involve India, China and the UK. Budget & Economy: Nepal unveiled a $13.8bn (NPR 2.12tn) reform budget for FY 2026/27, promising better spending and growth after political turmoil, including salary hikes and tax changes; Finance Minister Wagle also announced a VAT bill lottery scheme aimed at boosting invoice demand and compliance. Public Health: Health Minister Nisha Mehta urged tobacco users to quit on World No Tobacco Day, warning against vapes and e-cigarettes. Water & Services: National Assembly members raised Tarai drinking-water shortages and questioned budget priorities. Governance & Safety: A Saket Metro-area building collapse in Delhi killed six; an FIR was registered and officials were suspended over alleged supervision lapses. Sports: Nepal’s men’s team set a T20I record with 313/2 vs China in Asian Games qualifiers; in women’s cricket qualifiers, Thailand, Malaysia and China booked Asian Games berths. Politics & Health (Local): CPN (Maoist) coordinator Prachanda’s condition was reported stable at Mediciti Hospital.

Tax & Budget Reforms: Finance Bill 2026 raises the income tax threshold to Rs 1 million for individuals and married couples, with a 1% rate on that slab and revised higher brackets plus a 2% surcharge for incomes above Rs 4 million. IT & Digital Governance: The budget pushes IT with 50% tax exemption on export income, full deductibility for “sweat equity,” and an AI-enabled e-assessment system while moving tax administration toward paperless, faceless processes. EV & Energy Policy: EV taxation shifts from motor peak power to customs value, with a flat 20% customs duty and new “clean infrastructure” levies; meanwhile, VAT on electricity use over 50 units draws sharp criticism from UML and opposition voices. Foreign Investment & Capital Markets: Rules are eased for foreign investors, including scrapping prior NRB approval for repatriation (notification-based) and allowing NRNs into secondary securities trading. Cooperatives Crackdown: Kathmandu Metropolitan City says only 726 of 1,186 cooperatives are in contact; action is underway against those missing annual reports. Security & Regional Defence: Nepal participated in the multinational counter-terror drill PRAGATI 2026 in Meghalaya, while separate reports highlight drug and terror arrests in India. Politics & Rights: Madhav Kumar Nepal calls for unity among communist forces; women’s rights minister Sita Badi stresses equal access for women in decision-making.