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Greetings from Kathmandu,

Welcome to The ApEx Daily, your daily briefing on Nepal's politics, governance, and public affairs. Designed for an international audience, this newsletter explains the developments shaping one of South Asia's youngest federal democracies.

Political developments in Madhes have taken a new turn. The communal violence that began in Sunsari has reignited a national debate over whether Nepal should retain its secular identity or restore its status as a Hindu state.

The government has signed an 18-point agreement with the Hindu Samrat Sena. As part of the deal, Home Minister Sudan Gurung has agreed to facilitate a public debate on the issue of restoring Nepal as a Hindu state. Following the agreement, the group has called off its protests across various parts of Madhes.

The agreement is expected to energize a new Hindu movement in the Terai-Madhes region, with demands extending beyond the restoration of Nepal as a Hindu state to the reinstatement of the monarchy. Over the past few years, the number of Hindu organizations active in the region has grown significantly.

After a week of heightened tensions, normalcy is gradually returning to the Terai-Madhes. Authorities have lifted curfews in Sunsari and Siraha districts, and Home Minister Gurung has returned to Kathmandu. However, public reaction to the agreement remains divided, with critics arguing that it contradicts Nepal's constitutional commitment to secularism.

The internal dispute within the Nepali Congress continues to intensify, with no immediate resolution in sight.

Amid growing tensions, a group of youth leaders led by Nain Singh Mahar has launched a pressure campaign urging the party's rival factions to reunite. Speaking at a press conference, the leaders announced a nationwide initiative aimed at promoting unity within the country's largest democratic party.

A total of 196 people have died and four remain missing in disaster-related incidents across Nepal between Baisakh 1 and Shrawan 17, 2083 BS.

According to the National Disaster Risk Reduction and Management Authority (NDRRMA), 4,053 disaster incidents were recorded during the period, affecting 5,188 families. The disasters also left 1,218 people injured.

Snakebites proved to be the deadliest hazard, claiming 54 lives and injuring 668 people. Authorities recorded 716 snakebite incidents, affecting 718 families.

A new study has found that Nepal's stock market reacts rapidly to major economic policies and national events, including the annual budget, monetary policy announcements, the COVID-19 pandemic, and earthquakes.

The joint research, conducted by Dr. Birendra Bahadur Budha, Rohan Byanjankar, and Swastik Nepal of Nepal Rastra Bank, concludes that a 2 percent decline in Gross Domestic Product (GDP) can result in as much as a 10 percent drop in the NEPSE index.

The body of renowned British-Nepali mountaineer Nirmal Purja has been recovered from Broad Peak in Pakistan, according to rescue officials.

The Alpine Club of Pakistan said Purja's body was found at an altitude of approximately 5,700 meters. Rescuers also reported spotting three additional bodies nearby, although their identities have yet to be confirmed.

Purja's company, Elite Expeditions, announced on Saturday that he was among ten climbers killed in the avalanche. Tributes have poured in from around the world, including from the Prince of Wales.

More than a week after cooking gas shortages emerged in the Kathmandu Valley, the problem remains unresolved.

Although LPG imports from India continue without disruption, consumers are still struggling to obtain cylinders. Traders insist they are supplying gas to the market, but shortages persist at the retail level, raising concerns over possible distribution bottlenecks.

The Nepal Teachers' Federation has announced a nationwide protest beginning in Bhadra, accusing the government of failing to address teachers' long-standing demands.

Federation President Laxmi Kishor Subedi said the organization would soon unveil a detailed schedule of protest programs following the federation's recent meeting.

Former Rastriya Prajatantra Party (RPP) leader Dhawal Shamsher Rana and businessman Durga Prasai are preparing to register a new political party with the Election Commission before the end of Shrawan.

According to sources close to the initiative, the registration process has entered its final phase after several rounds of discussions.

Sagun Lawati, who is involved in the campaign, said the party is expected to be officially registered on Shrawan 26. Before the registration, a task force will finalize the party's name, flag, and other organizational matters.

The Sunsari communal violence has helped to make a cordial relationship between ruling and opposition parties. After Rastriya Swantra Party emerged as a largest party in House of Representative, the party and Prime Minister Balendra Shah did not take initiative to initiate a dialogue with parliament in parliament.

  To give a message of unity and harmony, RSP Chairman Rabi Lamichhane organized an all-party meeting which was attended by top leaders of opposition parties, except KP Sharma Oli. Altogether 9 parties attended the meeting and issued a joint appeal paper urging peace and calm. This is a good sign because there was a lack of communication between two sides. Similarly, Lamichhane also met President Ram Chandra Poudel. As PM Shah is taking an inward-looking approach, Lamichhane has taken a lead to start the political dialogue.

Sunsari which faced the communal violence is gradually returning to a normalcy. Various political parties and religious leaders have organized a harmony rally in other parts of the country which are already vulnerable in terms of communal violence. Security chiefs have suggested Home Minister Sudan Gurung to find out a political way out of the violence instead of treating it as a law and order problem. Political leaders and observes have suggested the government to formulate a long-term strategy to tackle the growing communal violence, identifying the fault lines. PM has taken a briefed from the chiefs of security agencies about the latest situation in Sunsari.

The parliament meeting which was prorogued for some days will begin from this week. And, like previously, opposition parties have already started pressures to bring speaker in the parliament. Plus, government is preparing to table at least nine bills in Parliament. Speaker Aryal met PM Shah to request him to address to the Parliament covering the contemporary issues including the communal violence. But, it remains unclear whether PM will come to the Parliament.

The tension that emerged in the Supreme Court following the appointment of Chief Justice Manoj Kumar Sharma appears to be easing. In the constitutional bench formed on Wednesday, Sharma appointed Malla. However, other two seniors Kumar Regmi and Hari Prasad Phuyal were not included in the bench. This are also media reports that RSP lawmakers are preparing to register impeachment motion against senior judges.

First time after party’s first general convention, RSP held its Central Committee meeting which is expected to discuss the contemporary issues and fill the vacant positions in the party. RSP meeting has appointed Shah as a senior leader of the party.  In the meeting, Lamichhane reportedly said that he has no desire or greed for the post of prime minister. He further added that if necessary, he would be willing to sacrifice the position of PM for another five years as well. Statement comes at a time amid the rumors that growing Lamichhane could eye the prime minister ship after one year.

The population of tigers has reached 429 in Nepal which has drawn international attention. As per the census report, 112 in Bardiya National Park, 71 Parsa National Park, 51 Banke National Park and 50 in Shuklaphanta National Park. There has been a criticisms that growing number of tiger has led the conflict.  Over the past eight years, altogether 85 people have died across the country due to the tiger attacks. So, there are also views that Nepal should not further increase the number of tigers. Former Prime Minister KP Sharma Oli has stood against the idea of increasing the number of tigers.  A five-point agreement has been reached between government and Nepal Medical Association. In response, doctors have withdrawn the national-wide protest halting the services.

Kamal Dev Bhattarai, editor

Greetings from Kathmandu,

Welcome to The ApEx Daily, your daily briefing on Nepal's politics, governance, and public affairs. Designed for an international audience, this newsletter explains the developments shaping one of South Asia's youngest federal democracies.

The communal tensions in the Sunsari district have escalated further. All security agencies, including the Nepal Army, have been deployed to restore peace, but authorities are finding it difficult to bring the situation under control. There have been reports of vandalism and the burning of shops and houses, along with growing fears that the violence could spill over into other parts of the country.

Political parties have urged the government to handle the situation calmly. A government-formed investigation panel has reached the affected area but is facing difficulties starting its work due to the continued violence. In a statement, the Office of the Prime Minister and Council of Ministers urged the public to exercise restraint and maintain social harmony.

The ruling Rastriya Swatantra Party (RSP) has expressed serious concern over the communal tensions. In a statement, its Chairman, Rabi Lamichhane, urged the government to conduct a thorough investigation into the incident. Meanwhile, the CPN-UML, in a press statement, criticized the government for its poor handling of the violence. The Nepal Army has once again come under public scrutiny, with many questioning why, despite its current efforts to restore peace, it did not play a similar role during the September 8 violence last year.

Over the past few years, incidents of communal violence have become more frequent. Political analysts have long expressed concern over growing religious intolerance, particularly since Nepal was declared a secular state in 2008.

The spokesperson for India's Ministry of External Affairs, Randhir Jaiswal, stated that India has extended an official invitation to Prime Minister Balendra Shah to visit the country. However, this is not a new development. Soon after Shah was elected Prime Minister, Indian Prime Minister Narendra Modi extended an invitation along with his congratulatory message. Nepal's Minister for Foreign Affairs, Shisir Khanal, had already acknowledged that India sent the invitation.

Amid media reports claiming that Prime Minister Shah's adviser, Kumar Ben, met India's National Security Adviser, Ajit Doval, the Foreign Ministry spokesperson said that the ministry has no information about such a meeting. Earlier this week, media reports claimed that Shah had sent Ben to India to pave the way for a possible visit to New Delhi.

Previously, Ben himself dismissed media reports suggesting that he had visited India, clarifying that he had not made the trip. There are also reports that Prime Minister Shah is scheduled to meet India's Ambassador to Nepal this week. Since the formation of the new government, there have been no high-level visits from New Delhi to Kathmandu. However, Nepal's Foreign Minister Shisir Khanal and RSP Chairman Rabi Lamichhane have visited India. Over the past few days, some Indian media outlets have become critical of the Balen Shah-led government. It remains uncertain whether Prime Minister Shah will visit India in the near future.

Four months after its formation, the Shah-led government is increasingly facing street protests. Victims of microfinance institutions have organized demonstrations in Kathmandu, demanding the return of their deposits. They have also begun a collective, indefinite hunger strike, with a total of 25 victims participating to demand that the government implement the Supreme Court's mandamus order. Meanwhile, the Nepal Medical Association has halted all services except emergency care at hospitals across the country, stating that the government has failed to meet its demands. Other social groups are also protesting in the streets.

Amid media reports of growing friction between Prime Minister Shah and Finance Minister Swarnim Wagle, the finance minister has insisted that coordination between the Prime Minister's Office and the Ministry of Finance remains strong. Wagle was absent from a series of consultations organized by the Prime Minister with members of the business community, but while addressing business leaders later, he reiterated that coordination between the two offices remains solid.

Senior Nepali Congress leader Gopal Man Shrestha has died at the age of 83. A few days ago, Nepali Congress President Gagan Kumar Thapa appointed him as a senior leader of the party.

Mangal Bahadur Shahi has been appointed Chief Minister of Karnali Province. His appointment follows an agreement between the CPN-UML and other communist parties regarding power-sharing arrangements across five provinces. In the coming days, new government will be formed in other provinces.

In a meeting with Speaker Dornath Aryal, opposition political parties stated that Prime Minister Shah should be accountable to Parliament. As the Speaker prepares to resume the parliamentary session, opposition parties have demanded that the Prime Minister speak in Parliament on national issues. PM Shah has not honored parliamentary practices, as he rarely attends meetings.

Greetings from Kathmandu,

Welcome to The ApEx Daily, your daily briefing on Nepal's politics, governance, and public affairs. Designed for an international audience, this newsletter explains the developments shaping one of South Asia's youngest federal democracies.

Nepal has witnessed a worrying rise in communal violence, particularly between Hindu and Muslim communities, over the past few years. This marks a significant departure from the country's long-standing reputation for religious harmony and tolerance. The gradual erosion of this social fabric has become a matter of growing concern.

The situation in Dewanganj, Sunsari, has remained tense for the past two days following violent clashes between two groups. The government has deployed the Nepal Army to restore order after incidents of attacks and vandalism. The National Human Rights Commission (NHRC) has announced an investigation into the violence that occurred on July 26, which left one person dead and dozens injured.

Communal tensions in Nepal's southern plains have increasingly followed a pattern in which the celebration of a religious festival by one community is disrupted by another, often leading to violent confrontations. The Nepal Army has already described communal violence as a national security issue. Unless the government responds effectively, there are concerns that the unrest could spread to other vulnerable areas.

Victims of Nepal's cooperative crisis have once again taken to the streets, demanding the return of their savings. An estimated seven million people have been affected by the crisis.

The new government, led by Prime Minister Balendra Shah, has begun returning depositors' money. However, victims argue that the reimbursement process remains too slow.

Nepal inaugurated its first mountain road tunnel on July 27, a landmark infrastructure project built with an Official Development Assistance (ODA) loan from Japan.

Japan provided approximately 22.3 billion Japanese yen (around NPR 21.2 billion) for the project. The tunnel, which connects the Kathmandu Valley with western Nepal, is expected to significantly reduce travel time, improve the movement of people and goods, and contribute to the region's economic development.

Despite its potential benefits, concerns remain over the project's long-term economic viability and technical operation. The government now faces the challenge of ensuring an adequate number of skilled technical personnel for maintenance while generating sufficient revenue to sustain the tunnel's operation. The financial sustainability of such mega infrastructure projects remains one of Nepal's major policy challenges.

Home Minister Sudan Gurung has visited Nepal's border points with China after previously inspecting border areas along the Indian border. The government is preparing to introduce new measures to strengthen border management with both neighboring countries.

A report from the House of Representatives (HoR) has revealed poor attendance by senior political leaders, including Prime Minister Balendra Shah. According to the report, only 219 lawmakers attended more than 30 of the 41 parliamentary meetings held so far, while just six lawmakers maintained perfect attendance. The findings have once again raised concerns about lawmakers' accountability and commitment to their parliamentary responsibilities.

Youth leaders within the CPN-UML have become increasingly vocal, arguing that party chairman K.P. Sharma Oli should step down instead of consolidating power and signing political agreements that strengthen his position.

They believe Nepal's communist movement cannot move forward unless the current generation of leaders makes way for younger leadership. Meanwhile, senior communist leader Madhav Kumar Nepal has also expressed dissatisfaction with the recent political agreement.

Political parties have begun preliminary negotiations to form provincial governments.

The ruling Rastriya Swatantra Party (RSP) has adopted stricter disciplinary measures against its lawmakers. The party recently cautioned several members who publicly criticized the government's performance. Among them is lawmaker Kanti Shika Dhital, who raised concerns about the hardships faced by squatters living in temporary shelters. The disciplinary action has sparked debate over the state of intra-party democracy within the RSP, as more lawmakers have recently begun speaking openly about the government's shortcomings.

More than 1.209 million tourists visited Nepal during the 2025/26 fiscal year, representing a 4.8 percent increase compared with the previous fiscal year. According to the Nepal Tourism Board, India remained Nepal's largest source of international tourists, followed by the United States and China.

Despite promotional campaigns targeting the Chinese market, arrivals from China have fallen short of expectations. Analysts believe that last year's GenZ movement and political uncertainty negatively affected the recovery of Chinese tourist arrivals.

Greetings from Kathmandu,

Kamal Dev Bhattarai\ editor

Welcome to The ApEx Daily, your daily briefing on Nepal's politics, governance, and public affairs. Designed for an international audience, this newsletter explains the developments shaping one of South Asia's youngest federal democracies.

Nepal's first road tunnel—the 2.68-kilometer Nagdhunga–Sisnekhola Tunnel—officially begins operations on Monday after nearly seven years of construction. Built at an estimated cost of NPR 29 billion, the project includes a parallel emergency rescue tunnel and supporting road infrastructure, including the Balambu Flyover.

Authorities will initially allow only emergency vehicles before gradually opening the facility to regular traffic, while motorcycles, pedestrians, and hazardous cargo remain prohibited. The government's challenge now shifts from construction to operations: maintaining safety standards, managing tolls efficiently, and demonstrating that Nepal can consistently deliver complex infrastructure rather than isolated successes. However, it remains unclear whether the government has sufficient trained manpower to operate the tunnel.

Authorities have arrested the principal suspect behind the leak of Tribhuvan University's Master of Business Studies (MBS) first-semester examination after question papers surfaced in a WhatsApp group of over 1,000 members just minutes after the exam began. Education Minister Sasmita Pokharel directed the Central Investigation Bureau (CIB) and the Cyber Bureau to launch an immediate investigation, leading to an arrest within 24 hours.

The rapid arrest demonstrates improved coordination between education authorities and cyber investigators. However, the incident reveals a broader institutional problem: examination systems remain vulnerable to organized digital misconduct. Restoring confidence will require stronger examination protocols, tighter digital security, and systemic reforms rather than treating the case as an isolated criminal incident.

Thousands of demonstrators organized by the Farmers and Workers Movement Nepal marched in Kathmandu demanding reforms to the country's microfinance sector. Protesters accused lending institutions of exploitative practices, calling for debt relief, tighter regulation, and stronger borrower protections. Microfinance has long been promoted as a cornerstone of Nepal's financial inclusion strategy. However, increasing borrower distress is shifting public discourse from expanding credit access to regulating lending practices.

Formal negotiations between government representatives and medical reform campaigner Prof. Dr. Govinda KC are expected to continue following preliminary discussions in Dhangadhi. The talks focus on longstanding demands relating to medical education, public healthcare governance, and institutional reforms. Every round of negotiations with Dr. KC has implications beyond the health sector. A negotiated settlement would demonstrate the government's capacity to resolve long-running policy disputes through dialogue, while failure could trigger renewed protests and reinforce perceptions that structural reforms remain politically difficult despite repeated commitments.

Nepali Congress President Gagan Thapa has urged party leaders to postpone an internal unity gathering while a four-member reconciliation task force works toward resolving factional disagreements before mid-August. The NC rank and file are worried about a possible split in the party, as talks remain underway between the Thapa faction and the Purna Bahadur Khadka faction.

On the international front, Indian Prime Minister Narendra Modi has announced the establishment of a high-powered task force under Nandan Nilekani to prepare a report on examination reforms.

Meanwhile, massive wildfires in France and Spain continued to gather strength overnight, forcing further evacuations of residents near France's western city of Bordeaux and Spain's capital, Madrid.

The US has refrained from striking Iran for a second consecutive day following a nearly two-week streak of nightly strikes. Iran has not announced any new attacks either. However, the Middle East conflict, which spread to the Red Sea this week, has now reached the Caspian Sea, with Tehran accusing Ukraine of a deadly attack on one of its vessels.

In Ukraine, government figures indicate the highest number of monthly civilian casualties in over four years. Russian attacks this month have killed at least 377 civilians and injured 2,129, making it the deadliest month of the war since April 2022.

Welcome to The ApEx Daily, your daily briefing on Nepal's politics, governance, and public affairs. Designed for an international audience, this newsletter explains the developments shaping one of South Asia's youngest federal democracies.

Prime Minister Balendra Shah has stepped in to address growing concerns over Nepal's weakening capital market. When the RSP-led government took office, the NEPSE index was around 2,950 points with daily trading turnover of approximately Rs 13 billion. Since then, the benchmark index has slipped below 2,600 points, while daily turnover has nearly halved.

During a meeting with market stakeholders, the Prime Minister assured participants that the government would take necessary measures to address the downturn. Over recent weeks, Shah has also held consultations with representatives from various private-sector groups to hear their concerns directly.

However, Finance Minister Swarnim Wagle's absence from these high-level consultations has fueled political speculation. Several lawmakers with business backgrounds have reportedly been facilitating the meetings, while rumors continue to circulate that the Prime Minister is considering replacing Wagle over dissatisfaction with his performance as finance minister. There has been no official confirmation of any cabinet reshuffle.

The internal power struggle within the Nepali Congress (NC) remains unresolved. Vice President Bishwa Prakash Sharma said negotiations are underway to unify rival factions ahead of the party's upcoming general convention.

According to Sharma, Party President Thapa has been holding consultations with senior leaders representing different factions in an effort to build consensus and ensure the convention proceeds in a united manner.

The government has decided to suspend recruitment across government offices for one year as part of an ongoing administrative restructuring. Following the reduction of ministries from 22 to 18 and the merger of several government agencies, authorities say the immediate priority is to reorganize and redeploy existing permanent civil servants before opening new vacancies. The recruitment freeze is intended to facilitate workforce management during the transition.

Recent monsoon rainfall has significantly improved Nepal's agricultural outlook. Government authorities report that more than 75 percent of paddy transplantation has been completed nationwide.

The improved planting season is expected to contribute to higher paddy production this year, providing positive momentum for the agricultural sector and rural economy.

The government has published a notice in the Nepal Gazette allowing members of Parliament to appoint personal assistants. The decision has generated criticism from some quarters, as it appears inconsistent with the RSP government's commitment to fiscal austerity and reducing public expenditure.

Supporters, however, argue that dedicated parliamentary assistants could strengthen legislative performance by conducting policy research, preparing briefing materials, and supporting lawmakers in drafting speeches and parliamentary interventions—tasks for which many MPs have increasingly relied on AI tools.

Nepal and the Russian Federation marked the 70th anniversary of diplomatic relations on 20 July, with Foreign Minister Shisir Khanal and Russian Foreign Minister Sergey Lavrov exchanging congratulatory messages.

Minister Khanal conveyed Nepal's commitment to further expanding bilateral cooperation and exploring new areas of partnership, while Minister Lavrov reaffirmed Russia's willingness to strengthen the longstanding relationship for the mutual benefit of both countries. Diplomatic relations between Nepal and Russia were formally established on 20 July 1956.

Foreign Minister Shisir Khanal also held a joint meeting with the United Nations Resident Coordinator and heads of UN agencies based in Kathmandu, including UNDP, WFP, UNESCO, UNODC, UNRCPD, UNICEF, UNFPA, and WHO.

During the meeting, Khanal reaffirmed Nepal's strong commitment to the United Nations and the multilateral system. He emphasized the government's priorities of improving governance, accelerating economic transformation, creating employment opportunities, and achieving inclusive and resilient development.  Representatives of the UN agencies reiterated their continued support for Nepal's national development priorities and pledged to further strengthen cooperation with the government.

Key Takeaways

· Prime Minister Balendra Shah has personally engaged with capital market stakeholders as concerns over the economy and stock market deepen.

· Speculation continues over Finance Minister Swarnim Wagle's position amid his absence from key economic consultations.

· The government has frozen civil service recruitment for one year while implementing administrative restructuring.

·  Nepal's paddy transplantation has surpassed 75 percent, raising expectations for improved agricultural output.

· A new provision allowing MPs to appoint personal assistants has sparked debate over the government's austerity agenda.

· Nepal and Russia celebrated 70 years of diplomatic relations with an exchange of messages between their foreign ministers.

· Foreign Minister Shisir Khanal reaffirmed Nepal's commitment to multilateral cooperation during a meeting with UN agency leaders in Kathmandu.

Nepal’s oldest democratic party, the Nepali Congress (NC), finds itself at an existential crossroad where systemic organizational fatigue intersects with a generational transfer of power. Rather than a conventional ideological dispute or a standard power struggle among elites, the current crisis represents a profound structural realignment.

The ascension of Gagan Kumar Thapa to the party presidency via a special general convention—effectively sidelining veteran leader Sher Bahadur Deuba and the traditional establishment—signifies a decisive rupture in the party’s historical hierarchy.

Though Thapa himself is in his late 40s and may not fit the definition of a youth leader among younger demographics, his election represents a reform-oriented cohort taking the helm over a legacy leadership long defined by transactional consensus.

However, the transition remains severely contested. The establishment old guard, now coalesced under senior leader Purna Bahadur Khadka alongside stalwarts such as Krishna Prasad Sitaula, Prakash Man Singh, and Bimalendra Nidhi, continues to resist this new reality.

Their reluctance to accept Thapa’s leadership highlights a fundamental friction: while convention delegates sought a generational reset, the senior political class views this shift as an existential threat to their long-held dominant influence within the party structure.

The conflict has played out across constitutional bodies and informal party organs, revealing a stark divide between legal authority and political consensus.

Having lost their initial legal battles when both the Election Commission and the Supreme Court affirmed the statutory legitimacy of the special general convention and Thapa’s presidency, the dissident old guard shifted strategies.

 Deprived of legal leverage to overturn the convention, Khadka-led faction has resorted to institutional bargaining to secure significant central committee representation and maintain operational relevance.

By running parallel organizational activities and operating from a separate office, the dissident faction is leveraging the threat of an outright party split as political currency.

While Thapa’s leadership remains confident that a formal rupture is improbable due to the lack of substantive ideological justification, the physical and operational division renders unified governance nearly impossible. Even if a negotiated truce prevents a formal party split, the underlying dynamic suggests that the intra-party tussle will persist as a chronic institutional paralysis rather than a resolved political dispute.

At the technical center of this political deadlock lies the contentious issue of active membership distribution, renewal, and record updating. In the constitutional architecture of the NC, active members serve as the foundational electorate: they vote for the general convention delegates who, in turn, elect the central office-bearers and the party president. Consequently, controlling the active membership registry is equivalent to controlling the party's future electoral math.

The dissident faction’s grievances over transparency, non-uniform district standards, and allegations of centralized bias reflect deep-seated fears of being systematically disenfranchised from future conventions. Conversely, the establishment side, defended by General Secretary Pradeep Paudel, frames the membership update as a necessary modernization effort—transitioning from legacy paper records to a digitized database to eliminate duplicate entries and ghost cadres.

This debate encapsulates the broader struggle within the party: a clash between traditional patronage networks reliant on discretionary membership allocation and a modernizing push toward digital accountability.

This intra-party turbulence is further compounded by a leadership vacuum in the legacy faction. Sidelined former president Sher Bahadur Deuba remains abroad amid ongoing financial misconduct and money laundering investigations by state authorities, leaving his faction without its traditional anchor and increasing the sense of drift among his loyalists.

The ongoing internal attrition directly undermines the party’s readiness for upcoming local elections. The parliamentary elections of March 5 demonstrated that organizational division at the top translates directly into electoral setbacks at the ballot box, where contested legitimacy paralyzed grassroots campaigning.

For party cadres and local leaders, the imperative is clear: the NC cannot afford to contest upcoming municipal elections while operating as a house divided. Without reconciling legal legitimacy with structural inclusivity, the party risks repeating the tactical errors of the recent past, converting its rich historical legacy into contemporary political obsolescence.

Welcome to The ApEx Daily, your daily briefing on Nepal's politics, governance, and public affairs. Designed for an international audience, this newsletter explains the developments shaping one of South Asia's youngest federal democracies.

RSP’s closed-door Kavre meeting

A high-level meeting between Rastriya Swatantra Party (RSP) Chairman Rabi Lamichhane and Finance Minister Dr. Swarnim Wagle has fueled speculation about growing tensions within Nepal's governing establishment. The two leaders reportedly spent several hours in closed-door discussions at a hotel in Kavre district before returning to Kathmandu. While neither side disclosed the details of the meeting, political observers believe it focused on the ruling party's strategy amid mounting public criticism of the government's economic policies. The immediate source of controversy is Finance Minister Wagle's decision to introduce new taxes affecting sectors including health and education. The measures have triggered criticism from business groups, professionals, and sections of the public.

According to local media reports, Prime Minister Balendra "Balen" Shah, senior leader of RSP heading Nepal's current government, has expressed dissatisfaction with Wagle's performance. Members of the Prime Minister's team reportedly believe the tax measures have become one of the administration's biggest political liabilities. Although the government has earned praise for efforts to strengthen governance and reform state institutions, the RSP leadership is increasingly concerned that public dissatisfaction over economic policy could weaken the party's support base.

Nepali Congress edges closer split

Nepal's largest opposition party, the Nepali Congress (NC), appears increasingly vulnerable to a formal split as rival factions remain deadlocked over the party's future leadership. The dispute pits Party President Gagan Kumar Thapa, who represents a younger generation of leaders seeking organizational reform, against a traditionalist faction led by senior leader Purna Bahadur Khadka. According to party insiders, the Khadka faction has accelerated preparations to register a separate political party if negotiations fail.

Key developments

A struggle over leadership: Party insiders describe the conflict primarily as a contest for organizational control rather than an ideological disagreement.

Demands before the convention: The Khadka faction is seeking influential positions in the party's Central Working Committee before allowing the long-delayed general convention to proceed.

Pressure to preserve unity: Thapa faces growing pressure to negotiate a compromise that could prevent a formal split.

Background: Earlier this year, reform-minded leaders organized a special "generational convention" aimed at replacing long-time party leader Sher Bahadur Deuba, who served multiple terms as Nepal's prime minister. Since then, parallel power structures have emerged within the party. The Nepali Congress is now under pressure to hold its regular national convention and resolve the leadership dispute.

Oli acknowledges setback

Former Prime Minister KP Sharma Oli, chairman of the Communist Party of Nepal (Unified Marxist-Leninist)—better known as the CPN-UML—has publicly acknowledged that his party is facing a significant political setback. Despite the admission, Oli said the UML is preparing coordinated protest campaigns both inside Parliament and on the streets, arguing that they are necessary to counter what he described as growing "anarchism." Notably, Oli avoided his usual direct criticism of the current government during his latest public remarks. At the same time, he continues to face internal calls to step aside as party chairman, although he has rejected those demands.

Background: Nepal's political landscape changed dramatically after last year's youth-led Gen Z movement, which helped bring down the UML-led government. In the March 5 national elections, the party suffered disappointing results, and Oli lost his parliamentary race to Balendra Shah. Since then, the UML has positioned itself as one of the government's strongest opponent.

Monsoon rains expose Kathmandu's chronic infrastructure problems

Heavy monsoon rains continue to disrupt life across Nepal, forcing the closure of major highways and prompting authorities to issue warnings over flash floods and landslides. Kathmandu, the country's rapidly expanding capital, once again experienced widespread flooding after intense rainfall overwhelmed its drainage system. Roads quickly became inundated, bringing traffic to a standstill and disrupting daily life. The recurring floods have renewed debate over the city's urban planning, with experts arguing that decades of unplanned development, inadequate drainage infrastructure, and weak enforcement of building regulations have left Kathmandu increasingly vulnerable to seasonal flooding.

Provincial politics enter another period of instability

Political instability is once again spreading across Nepal's seven provincial governments. The Nepali Congress, CPN-UML, and the Communist Party of Nepal (Maoist Centre)—all currently outside the federal government—are attempting to reshape governing coalitions in several provinces, where they still hold significant political influence. The coalition maneuvering has drawn criticism from observers who argue that provincial leaders are prioritizing political calculations over governance and service delivery. Speaking on the issue, NC President Gagan Kumar Thapa warned against forming unstable three-party coalition governments, saying they would weaken provincial administration. He also called for carefully targeted constitutional amendments to improve governance while stressing that his party would not compromise on Nepal's democratic constitutional framework.

Background: Although the Rastriya Swatantra Party dominates the federal government, provincial governments remain largely controlled by the Nepali Congress, the CPN-UML, and the Maoist Centre. The differing political alignments have made coalition reshuffles a recurring feature of Nepal's provincial politics.