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Nepal

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Nepal country brief

Bilateral relationship

Australia and Nepal celebrated 60 years of diplomatic relations in 2020.  

Our relationship is built on a long‑standing history of development partnership and close people-to-people links. The Australian Nepali population is growing with over 90,000 Nepali’s now residing in Australia. 

Australia continues to be a destination of choice for Nepali students, with over 51,000 Nepali international students studying in Australia in 2020. 

Australia remains a committed development partner to Nepal. In 2020-21, Australia will provide an estimated $21.4 million in official development assistance. Our development assistance is supporting Nepal’s response to COVID-19 and its longer-term recovery needs. The COVID-19 Response Plan for Nepal outlines our development objectives in support of the Partnerships for Recovery Strategy. 

Australia has provided support to Nepal in times of disaster, including providing lifesaving food-assistance to those affected by floods and landslides during the 2020 monsoons, and providing more than $28 million to Nepal following the devastating earthquakes in 2015.

Political overview

Nepal was established as an independent monarchy in 1769 when the ruler of the small principality of Gorkha united 46 independent states to form the Gorkha Kingdom.

In 1996 the Unified Communist Party of Nepal (Maoist) (UCPN-M) began a nationwide insurgency against the government leading to a ten-year civil war. Almost 18,000 people were killed and over 1,300 disappeared before a peace accord was signed in 2006 following an agreement between the Maoists and an alliance of seven Nepali political parties.

In February 2005 the then-king Gyanendra Shah assumed absolute power in a coup supported by the army. A people’s movement in April 2006 and a joint alliance of democratic parties and the Maoists forced the king to relinquish direct rule. Parliament subsequently agreed to abolish monarchical rule, and Nepal became a secular republic in 2008 with the election of the first Constituent Assembly.

A new Constitution which was subsequently promulgated on 20 September 2015, and national elections were held over two phases in November and December 2017

Nepal – Heads of Government listing

Economic overview

Nepal is a low-income, developing nation with an estimated GDP of USD 29.8 billion in financial year 2019 and a per capita annual income USD 1,085. Nepal faces multiple constraints to economic growth, including its landlocked geography, susceptibility to natural disasters, limited infrastructure and low levels of foreign direct investment.

Poverty in Nepal is complex and multidimensional, with approximately a fifth of the population living below the poverty line and earning less than USD 1.90 per day.

Nepal’s key economic drivers include remittances, which account for more than 25 per cent of GDP, and tourism, which contributed approximately 7 per cent of GDP in 2018-19.

Trade and investment relationship

Australia's trade with Nepal totalled approximately $2.4 billion in 20129-20. The key sector is international education services, which accounts for approximately $1 billion.  Nepal’s interest in delivering vocational education to address skills gaps and ensure school graduates are fit for the Nepali jobs market presents potential opportunities for Australian vocational education providers  

There are also potential growth opportunities in technical advice in the agriculture and renewable energy sectors and in the gourmet foods sector. 

Australia is supporting Nepal to reduce the economic impact of COVID-19, with a particular focus on the most vulnerable, and to strengthen government systems that will support Nepal’s longer-term economic development. 

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