Nepal has many of the ingredients to be an economy on an upward trajectory. A young population and rising middle class mean new markets and opportunities for new and better products and services. Straddled between India and China, Nepal is an interesting destination to explore business opportunities, not only to serve Nepal, but also the larger markets to its north and south. 

The leading commercial sectors for U.S. exports are:

•    Aircraft parts
•    Medical, optical, and surgical instruments
•    Airport and Ground Support Equipment
•    Information Communication & Telecommunications (ICT) Equipment and Services (including computers/peripherals)
•    Electrical and Industrial machinery and equipment
•    Water resource equipment/services
•    Renewable energy equipment
•    Soyabean, Seeds and miscellaneous grains
•    Franchising
•    Perfumery and cosmetics.

The Government of Nepal (GON) is prioritizing needed infrastructure development in its policies, programs, and budgets, particularly energy (mainly hydropower), aviation, and transport infrastructure. Due to rising energy demand, Nepal will need 14,259 MW of additional power capacity by 2035. In January 2025, the government endorsed the “Energy Development Roadmap and Action Plan 2081,” which envisions total electricity production of 28,500 MW by 2035 – 13,500 MW for domestic consumption and 15,000 MW for export. Currently, Nepal generates about 3,435 MW and will require at least $46.5 billion in investment for generation, transmission, and distribution to achieve its target. For infrastructure, in addition to upgrading the existing international airport, the government recently completed the construction of two airports, Bhairahawa and Pokhara, intended for international operations, which will require additional safety and technical upgrades. While the GON has in the past allocated large budget expenditures for infrastructure expenditures, which were not fully executed, opportunities in the infrastructure and energy sectors (hydropower, renewable energy, transport, urban, and health infrastructure) will likely increase in coming years. As many infrastructure projects are financed by multilateral development banks, Interested companies should monitor the websites of these organizations and that of the Investment Board of Nepal, which approves and facilitates large-scale infrastructure projects, for tender opportunities. 

In September 2017, the GON signed a $500 million compact with the U.S. government’s Millennium Challenge Corporation (MCC) to build to 315 km of electricity transmission lines and upgrade/maintain up to 95 km of roads in different parts of the country. The GON agreed to contribute an additional $197 million to this project designed to “spur economic growth and private investment, and open new markets.”  This is the first MCC compact in South Asia and the GON’s additional contribution is the largest up-front contribution in MCC’s history. In November 2025, the MCC announced an additional $50 million in grant funding for Nepal’s compact, bringing the total funding to $747 million. On August 14, 2025, the MCC signed two contracts worth $154 million to build additional electric transmission projects. The compact will increase the availability of electricity and lower transportation costs – helping to spur investment, accelerate economic growth, reduce poverty, and unlock regional trade and integration opportunities across South Asia. Tourism and hospitality are areas of budding opportunity, though international arrivals have yet to regain their 2019 levels. Indicative of the interest in Nepal’s tourism sector, numerous international hotel brands have opened in Kathmandu and elsewhere in Nepal. 

Nepali consumers, benefiting from favorable tax policies, low operating costs, and generous financing options, are increasingly turning to imported electric vehicles (EVs). In July 2024–July 2025, Nepal imported over 13,500 EVs, a 16% increase, valued at approximately $230 million. While Chinese (BYD, Great Wall Motor, Dongfeng, Xpeng, and others) and Indian brands (Tata and Mahindra) dominate the market, holding 75% and 23% shares, respectively, the United States has an opportunity to expand its presence in Nepal’s growing electric vehicle (EV) market, which currently enter Nepal through third countries such as China, Malaysia, and Singapore.