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.
