Three years ago, the Auditor General's Office asked for justification for the government’s revenue exemption on vehicle assembly plants. That year, Bajaj, which assembles two-wheelers in Nepal, received an exemption worth Rs767 million in excise duty and VAT on imported spares.
Since then, Yamaha, Hero, Honda, and TVS have all set up two-wheeler assembly plants in Nepal, and most motorcycles now sold in the country are assembled here. The distributor of Hyundai vehicles Laxmi Intercontinental is even assembling cars in Nepal.
These companies get a 50% rebate on excise duty but there is no value addition, they do not use local materials or resources, rendering the tax exemption they enjoy rewarding the captains of industry, and not citizens. The cost savings are not passed down to the consumers, instead two-wheelers assembled in Nepal are as expensive as imported ones.
An advisory committee on tax system reform last year recommended gradually doing away with the Rs200 billion in revenue exemptions that the government provides every year that does little to boost the economy or generate employment.
“Year after year, we have a different finance minister who hands out tax exemptions to cronies. This is disastrous and should be abolished,” says one of the members of the committee, Ram Prasad Gyanwaly, a professor of economics at Tribhuvan University.
Every year around budget time, there is a big debate about taxing electric vehicles. On one side are environmentally conscious groups in favour of tax rebates, while others consider it a luxury that needs to be taxed. But rebates on private EVs and battery-powered buses would reduce the petroleum import bill and clean up the air-- an argument that is lost in the annual cacophony.
One in every five Nepalis (6 million people) live in poverty, which means they earn Rs200 or less daily. They can barely make a living, let alone afford education or regular healthcare. Most are forced to migrate.
This monsoon was deadly on Nepal’s roads because taxpayers' money did not get to where it could save lives. It is not fair to award large tax rebates to individuals so they can drive their SUVs on potholed highways.
Seventeen years ago, the government announced that it would give a 50% VAT refund to businesses importing mobile phones, the argument being that it would control the theft of mobile phones and reduce the market price. Two years later, this figure was increased to 60%. But a task force three years since has concluded that this tax exemption worth billions has nothing to do with consumers but only goes to benefit powerful importers with political connections.
The number of goods and services with VAT exemptions should be decreasing every year, but it has been increasing annually. The International Monetary Fund (IMF) has also reminded the government that the current system of VAT refunds and tax exemptions is not working. If concessions must be given, it says, that should be a subsidy through the budget.
Then there is the whole question of transparency in announcing these exemptions at budget time every year. Two years ago, nearly Rs100 billion in tax exemptions were handed out through the Economic Act and the Customs Act, even though such exceptions are only allowed for certain items like foreign loans and diplomatic facilities.
Nepal’s airlines are also exempted from paying customs duty on spare parts, even though the same exception is not made for surface public transport companies that may need it more.
Even more anomalous was a budget two years ago during when Finance Minister Janardan Sharma allowed the import of 10 buses at 1% customs duty for under construction five-star hotels. Such irregularities are widespread in other sectors including oil, jute, private healthcare as well as LPG. Tax exemptions in Nepal are essentially making the rich richer and the poor poorer.
The Auditor General’s report goes on to state that there is no record of the basis on which these exemptions were made, and an analysis about how it would benefit the economy. There is no attempt to correlate the tax cuts and rebates with encouraging manufacturing, creating jobs, and attracting investment. It is not difficult to see that it is you-scratch-my-back-I-scratch-yours.
India is doing away with tax exemptions to stamp our political cronyism, even though it has been only partly successful.
Committee member Laxman Aryal put it simply: "If tax exemptions do not help in job creation, economic expansion and growth in manufacturing, it is ill-gotten.”
Ramesh Kumar

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The taxman looteth

<figure><img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221110161132/636d19939c7e80680e0ac827jpeg.jpg" alt="" width="664" height="450"/><figcaption></figcaption></figure>Even as Nepal tries to recover from the impact of the pandemic, the country’s economic indicators released this week by the central bank show dismal performance in the first two months of the fiscal year.The report by the Nepal Rastra Bank shows that Nepal’s foreign currency reserves fell to $11.1 in mid-September, 6.6% below the figure for last year, this is enough to pay for only 8 months of total imports.Even more worrying is that <a href="https://www.nepalitimes.com/banner/defying-predictions-nepals-remittances-still-high/" target="_blank" rel="noopener noreferrer">overseas remittances that had held steady despite the pandemic</a> for the past two years have now started declining. Nepalis abroad sent home Rs155 billion in the past year, which is 6.3% below the same period last year.Despite the pandemic, remittances had risen by 8.1% in fiscal year 2019-2020. Experts attributed that to overseas workers sending money home as the economic crisis hit families back home, and not necessarily due to higher earnings.The concurrent decrease in foreign currency reserves to finance <a href="https://www.nepalitimes.com/editorial/blood-sweat-tears/" target="_blank" rel="noopener noreferrer">Nepal’s imports, mainly of petroleum</a>, food and other commodities, is seen as an indicator of an impending economic crisis. The main reason for the current downturn is shrinking remittances, which prop up Nepal’s economy.Indeed, compared to 2019-2020, the past year has seen a steep 76% increase in imports to a record Rs352 billion, mainly due to a rise in the import of petroleum products, gold, silver and other items, according to Rastra Bank figures.Even though exports went up by 115% in the same period to Rs44.4 billion, it did not put much of a dent on the trade deficit which has risen to Rs270 billion in the past two months of the fiscal year. This represents a 71% increase in the trade gap compared to last year.The <a href="https://www.nepalitimes.com/latest/nepal-less-and-less-able-to-feed-itself/" target="_blank" rel="noopener noreferrer">growing asymmetry between imports and exports</a> means that the country’s balance of payments situation is now Rs83.4 billion in the red — up from Rs38.7 billion in July.With the alarm bells ringing, the government has drastically reduced the amount of money Nepalis can officially exchange before traveling abroad from $1,500 to $200-500. This week, further austerity measures were announced, including a ban on the purchase of vehicles for official use.The negative trend in economic indicators could not have come at a worse time. Just as the country was recovering from the <a href="https://www.nepalitimes.com/banner/the-real-cost-of-nepals-second-wave/" target="_blank" rel="noopener noreferrer">economic impact of the pandemic</a>, it was hit by extreme rainfall this month which killed more than 110 people across the country, and destroyed up to one-third of the country’s ready to harvest rice crop.The Ministry of Agriculture estimates that nearly 90,000 hectares of rice fields were severely damaged by <a href="https://www.nepalitimes.com/latest/post-monsoon-rain-ruins-nepals-crops/" target="_blank" rel="noopener noreferrer">the unseasonal post-monsoon rains</a>, and paddy losses will amount to more than Rs8 billion. Lumbini Province is said to have suffered the worst, with more than half of the initially reported damage nationwide.The unprecedented destruction comes just as farmers and officials were optimistic about a healthy rice harvest because of a healthy monsoon season. Rice is such an important component of Nepal’s economy that it will impact on the GDP, economic growth, and have a knock-on effect on the trade deficit because more rice will now need to be imported.Last year Nepal produced 5.6 million tonnes of rice from 1.4 million hectares of paddy fields, up 1.3% from the previous year. However, rising income levels of Nepalis has also meant that rice consumption is growing, and the country had to import Rs 51 billion worth of rice last year, compared to only Rs23 billion in 2019.Analysts say the <a href="https://www.nepalitimes.com/here-now/are-nepalis-really-eating-more-rice/" target="_blank" rel="noopener noreferrer">sharp increase in rice imports</a> cannot be attributed only to rising consumption, explaining it by the rise in demand from Nepal’s breweries and the dramatic rise in domestic beer consumption.

Nepal’s remittances, forex reserves drop

<img src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101128/636a21709c7e80680e04173ejpeg.jpg" alt="" width="730" height="886"/>In 1991, India’s foreign exchange reserves almost emptied when the country’s balance of payments collapsed. The Central Bank eventually averted a full-blown crisis, but poverty in India increased in the years that followed. Manmohan Singh was finance minister, and he introduced dramatic economic reforms that unleashed India’s economy and has been the foundation of its growth.Today, Nepal is at the risk of facing the same crisis India experienced three decades ago. There is a net outflow of foreign exchange, as remittance income fails to keep pace with the growth in <a style="background-color: #ffffff; font-size: 15px; letter-spacing: 0.01em;" href="https://www.nepalitimes.com/banner/from-a-fossil-past-to-an-electric-future/" target="_blank" rel="noopener">imports, mainly petroleum. </a>Nepal’s foreign exchange reserves currently can sustain only 7 months and 26 days of imports, compared to 14 months and 3 days as recently as 2016. (See graph above) Nepal Rastra Bank also calculated that in the first four months of the fiscal year, Nepal’s balance of payments deficit stood at Rs57 billion and in just the last month it increased by Rs22 billion.“The current rate of increase in the balance of payments deficit will be a huge crisis in the future,” warns Bijaya Nath Bhattarai, an ex-governor of Nepal Rastra bank.Read also : <a href="http://archive.nepalitimes.com/news.php?id=18194#.XC73rFUzbIU" target="_blank" rel="noopener">Hydrocratic dreams</a>, Ratna Sansar Shrestha Nepal’s over-dependence on <a href="https://www.nepalitimes.com/banner/kleptocrats-of-kathmandu-and-kualalampur/" target="_blank" rel="noopener">remittance </a>is deepening the crisis. Among different sources of foreign exchange for a country such as investments, exports, or tourism, remittances from overseas workers is the most unreliable income source because it can easily be affected by political tension and conflicts. Nepal’s remittance income is also not ploughed into productive sectors, and is mostly used up in paying for imported consumer goods and energy.Some 65% of Nepal’s total import bill is paid through remittances, while exports constitute only 6% and investment only 17% of Nepal’s annual foreign exchange income that is used to pay for imports. But even with all these sources combined, Nepal cannot meet 12% of its import bill, which is what is leading to the balance of payment deficit. The country has been forced to dip into its foreign exchange reserves to meet the gap.In the first four months of the current fiscal year, Nepal imported goods worth approximately Rs400 billion while exports were only worth Rs29 billion. Even though this is a tremendous difference, finance minister <a href="https://www.nepalitimes.com/banner/calendar-of-economic-change/" target="_blank" rel="noopener">Yuba Raj Khatiwada</a> admits that what worries him more is the gap in the service sector. Most of the current outflow is for energy and vehicle imports, while there is also a huge outflow due to <a href="https://www.nepalitimes.com/banner/migration-certificate/" target="_blank" rel="noopener">students</a>, medical patients and <a href="https://www.nepalitimes.com/banner/where-are-you-going-this-dasain/" target="_blank" rel="noopener">Nepalis vacationing abroad</a>. Nepali tourists spent Rs35 billion abroad in the four months of this fiscal year, but foreign tourists spent only Rs25 billion in Nepal during the same period.This deteriorating balance of payments deficit may compel the government to adopt a restrictive monetary policy, but economist Keshav Acharya explains that this will mean only two choices for the government: “Either the government must take foreign loans, or reduce imports to prevent the outflow of hard currency.”The easiest step would be to borrow, but ex-governor Bhattarai notes that adhering to the strict conditions of the donors might be very painful for Nepal as it has been for other countries. Moreover, the crisis may also lead to policies to stop Nepalis going abroad, and limit imports to only basic goods.The CEO of Nepal Rastra Bank Nar Bahadur Thapa says, “If the balance of payments deficit and growth of imports continues at the present rate, we may not be able to import even the goods needed for development projects.”It is accepted practice that an import-dependent country without a sustainable source of foreign currency needs to maintain foreign exchange reserves to handle at least six months of imports. But with Nepal’s total annual export meeting only 24 days of imports, Nepal Rastra Bank’s policy is to maintain foreign exchange reserves to last at least 8 months.If not, depleted reserves can put pressure on Nepali fixed <a href="https://www.nepalitimes.com/opinion/12-full-opinion/dollar-laxmi/" target="_blank" rel="noopener">exchange rate </a>with Indian currently at Rs160. If that happens, there will be ruinous capital flight to India, as has occurred in the past. Ex-governor Krishna Bahadur Mandandhar says that the government and the central bank still have time to remedy the situation by limiting imports of luxury items. But this could lead to an expansion in the black market.Earlier this year, when the government applied quantitative restrictions on the import of sugar, the price immediately shot up by Rs5 per kg. Worse, if there is a devaluation of the Nepali rupee it will raise inflation and that could lead the economy into a downward spiral.Experts advise that while the central bank needs to be free from political interference to stabilise the economy, the government and the central bank must coordinate their actions. In the longer-term, there is no other way but to attract investors by increasing the competitiveness of the Nepali economy and increase exports.

Nepal living beyond its means

Kathmandu Valley alone now has over 700 cafes serving mugs made from freshly ground beans. ‘Americano double shot’, ‘Cappuccino’ and ‘Mocha’ have entered the Nepali language. It has also become a cash crop for thousands of farmers with near-perfect growing conditions along the Himalayan foothills.&nbsp; Yet, annual coffee production has declined by 15% to only 550 tons in the past years, and this meets only a fraction of the domestic demand of 6,000 tons.&nbsp; Nepali coffee fetches $22 per kg in the international market, but Nepal only exports 3% of its crop. If cleverly promoted, the international demand for Nepali coffee can be 8,000 tons. “Coffee is all about story-telling,” explains <a href="https://archive.nepalitimes.com/article/business/Gagan-Pradhan-and-Himalayan-Java,1076">Gagan Pradhan, founder of Himalayan Java Coffee</a>. “Nepali coffee has brand value because it is grown in the highest elevations on earth and is a cash crop for cooperatives and small farmers. There is tremendous potential for growth.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100216_1f366d8a85cc133fedee0ee72d7768d3a23bf51f8d43edbdadf98443bc0c01ba.jpg" data-media-id="editor_1" data-image-id="20260205100216_1f366d8a85cc133fedee0ee72d7768d3a23bf51f8d43edbdadf98443bc0c01ba" data-rendition-name="original" width="2000" height="1518" loading="lazy" alt="coffee culture in Nepal"> </figure>  The reason for the decline in coffee production lately is attributed to erratic weather caused by climate change, but mostly it is because it is manual-intensive, needing initial capital and patience for a return on investment. The strategy that makes most sense for <a href="https://nepalitimes.com/here-now/make-way-for-makalu-coffee">Nepal’s coffee industry</a> is to sell it as a rare, specialty product.&nbsp; Says Raj Kumar Banjara, master trainer at Nepal Coffee Academy and originator of the Himalayan Arabica brand: “There is no better crop for Nepal because we have the ideal soil and weather to grow specialty coffee, which can be exported to third countries directly instead of sending it through India like with ginger, cardamom, or tea.” These favorable conditions are at altitudes between 800m to 1,600m along the mid-mountains and temperature not exceeding 22°C, which allows cherries to &nbsp;develop slower, giving it a denser taste with complex flavours of fruits and nuts.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100216_35e470381d258d9598d30165d0dbb6b4294c389c61695bf8c47d72d2273b4629.jpg" data-media-id="editor_3" data-image-id="20260205100216_35e470381d258d9598d30165d0dbb6b4294c389c61695bf8c47d72d2273b4629" data-rendition-name="original" width="3872" height="2592" loading="lazy" alt="coffee culture in Nepal"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100216_f7ccb42d7a7fb656dadc7ba5132a6243b8f99a28f7877875172411b7a4c96bc0.jpg" data-media-id="editor_4" data-image-id="20260205100216_f7ccb42d7a7fb656dadc7ba5132a6243b8f99a28f7877875172411b7a4c96bc0" data-rendition-name="original" width="1024" height="768" loading="lazy" alt="coffee culture in Nepal"> </figure>  This is ‘Arabica’ coffee, and it is also considered ‘organic by default’ because farmers have limited access to chemical pesticides and fertilisers, adding to its premium. All of Nepal’s coffee is grown in only 4,300 hectares total, and this is just 0.36% of the area suitable for coffee farming. Still 31,000 households across 44 districts depend on this cash crop.&nbsp; Challenges include out-migration, limits on land ownership, and climate breakdown leading to colder, drier winters, droughts and heat stress. Shreeyanch Shrestha is the founder of Samparka Cloud Loyalty, a startup that helps businesses retain customers by giving them insights about customer behaviour. Among the services offered is a digital loyalty card for coffee shops, one of his biggest clientele.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100216_c80e17ac78016ae5a90f4b27105e16af6c39d1422665f9f9c9b1d8404e5e7d54.jpg" data-media-id="editor_5" data-image-id="20260205100216_c80e17ac78016ae5a90f4b27105e16af6c39d1422665f9f9c9b1d8404e5e7d54" data-rendition-name="original" width="1280" height="960" loading="lazy" alt="coffee culture in Nepal"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100212_968c5b264ec2fb65014dc3ebc2777f0bf19f596a4152c59f9cad9d99dee79df7.jpg" data-media-id="editor_6" data-image-id="20260205100212_968c5b264ec2fb65014dc3ebc2777f0bf19f596a4152c59f9cad9d99dee79df7" data-rendition-name="original" width="1200" height="900" loading="lazy" alt="coffee beans"> </figure>  Shrestha is also a coffee enthusiast, and recently collaborated with Baato Maps on the playfully designed ‘Kathmandu Coffee Map’.&nbsp; “This was a marketing campaign but also a way to pay tribute to cafe owners we worked with,” he says. “A new generation of coffee farmers, processors, roasters and consumers seem to want to invest in upgrading their coffee experience.” COFFEE CULTURE Operators such as Raj Kumar Banjara have been in that game for over 30 years, even earning a PhD in Coffee Agriculture, running farms and teaching roasting and barista courses. Now, he makes short how-to videos on social media. Banjara’s Academy is run by Specialty Coffee Association certified Q Graders and Authorised Trainers.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100216_22433d3a8b71224cd8cb38105b9eb5502a104e03ccec2e3864c8b23efc9f3fc6.png" data-media-id="editor_7" data-image-id="20260205100216_22433d3a8b71224cd8cb38105b9eb5502a104e03ccec2e3864c8b23efc9f3fc6" data-rendition-name="original" width="3612" height="2028" loading="lazy" alt="coffee culture in Nepal"> </figure>  Also promoting a coffee culture through social media is Santosh Shah of Bariko Coffee. He documents his process on Instagram, from hand picking and processing coffee cherries to brewing.&nbsp; Nepal appears to be riding the Third Wave of Coffee (see box) as the beverage moves away from the café chain culture to one that values knowledge of the cherries, beans, the roasting process and brewing -- right from the plant to the cup.&nbsp; Along the way, there are tales to be told about where the coffee is grown, who grows it, and how farmers get a fair price for the product. Coffee then becomes a shared social experience that directly connects the consumer to the producer. Nima Tenzing Sherpa returned to Nepal from the United States to start Lekali Coffee Estate in 2018, and produces fine single origin coffee beans so that the quality of the product improves the quality of life of the growers.&nbsp; He told Nepali Times: “Specialty-grade beans are the only future for Nepal’s coffee industry. I am continuously hunting for the best coffee origins in Nepal.” &nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100212_e08ba44d6396eb75da868404dd8cf2a26b71cd6d90ab3afaf7175790c111d21e.jpg" data-media-id="editor_8" data-image-id="20260205100212_e08ba44d6396eb75da868404dd8cf2a26b71cd6d90ab3afaf7175790c111d21e" data-rendition-name="original" width="3000" height="4000" loading="lazy" alt="coffee beans"> <figcaption>Photo: LEKALI COFFEE ESTATE </figcaption> </figure>  HISTORY OF COFFEE Human consumption of coffee began in Ethiopia when herders found their goats became perky after eating beans from a wild Arabica bush. The first commercial cultivation of the brew began in Yemen 600 years ago. &nbsp;&nbsp; Nepal’s coffee history is much younger. A holy man is said to have brought coffee seeds from Burma in 1938, and planted them in Gulmi, the district in the mid-mountains where the first coffee nursery was set up in 1981. The Nepal Coffee Company was founded in 1983 by Krishna Ghimire in Manigram near Butwal which educated farmers about the crop and recruited them to cultivate it. He then roasted the beans, and convinced the BhatBhateni stores, which had just opened, to sell it. The company still supplies coffee to cafes and has its own brands and farm. It supplies green beans to those who want to self-roast, or build a brand. In the 1990s, the National Tea and Coffee Development Board was established, and Himalayan Java Coffee (Nepal Made, right) opened its first shop in Kamaladi before moving to Thamel. Itr now has nearly 100 franchises across Nepal and overseas.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260207030236_1908f4a4246d373f51affa8ac48be90129e888f1222b8f10e5cd25421e931dd8.jpg" data-media-id="editor_9" data-image-id="20260207030236_1908f4a4246d373f51affa8ac48be90129e888f1222b8f10e5cd25421e931dd8" data-rendition-name="original" width="2052" height="1455" loading="lazy" alt="coffee map"> </figure>  What is the Third Wave? First Wave: Profit-driven, mass marketing, air tight containers and instant coffee. Consumption of coffee worldwide starts growing.&nbsp; Second Wave: Artisan-driven, origin and roasting style become important, epitomised by Starbucks and espresso. &nbsp; <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/Nepali-specialty-coffee,4106">Third Wave</a>: Characteristics of the beverage take centre stage: origin of the beans, consistent processing techniques, and roasting style. Independent coffee shops demonstrate craftsmanship and knowledge of coffee beans from plant to the cup, promoting ethics and transparency.&nbsp; Coffee Districts Coffee is grown in over 44 districts of Nepal (see map, above). In the last fiscal year, Nepal produced 550 tonnes of Bourbon, Typica and Yellow Caturra varieties of Arabica coffee. The total plantation area in Nepal is 4,300 hectares, a fraction of the total suitable land. &nbsp;

Caffeine buzz

The series <a href="https://nepalitimes.com/multimedia/looking-good-by-doing-good">Nepal Made</a> profiles world-class Nepali products and the people behind them. The Dutch colonised Indonesian island of Java in 1596, and found that the coffee plant thrived in its fertile volcanic soil. Java had become the primary source of coffee for the world by 1720, and the place name became synonymous with the beverage.&nbsp; Four hundred years later, in Kathmandu an entrepreneur named Gagan Pradhan founded Himalayan Java Coffee. After returning from Australia in 1990, he found that opening a café was the most affordable investment. Now, 27 years later, there are 100 Java franchises in the Kathmandu Valley, Pokhara, Kurintar, Itahari and even Toronto and Lhasa.&nbsp; The story of Himalayan Java is pioneering, yet simple, combining consistent delivery in tastefully designed cafes at strategic locations to create a juggernaut of a brand. New Javas seem to pop up exactly where you would expect them to. “It all started as a passion, a hobby, and I never expected this venture to spread so widely so rapidly,” founder Pradhan told us at the Thamel outlet, where Himalayan Java moved in 2000 after opening the first small café in Kamaladi. Located on the first floor of a North Face showroom opposite Fire &amp; Ice Pizzeria in Thamel, the cafe has seating overlooking the street, and a spacious, bright indoors that is packed with locals, tourists, furniture, staff, baked goods on display, Himalayan Java merch, and coffee paraphernalia.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260208020256_12442271634ac9d5c2fa0ff723e42acb521a4b5d6f02b2c8ddb43664acf3f4b9.jpg" data-media-id="editor_1" data-image-id="20260208020256_12442271634ac9d5c2fa0ff723e42acb521a4b5d6f02b2c8ddb43664acf3f4b9" data-rendition-name="original" width="1416" height="943" loading="lazy" alt="Himalayan Java"> </figure>  On a recent Friday afternoon, there were Nepalis, tourists from India and China in groups and solo, and monks in maroon. Westerners lounged on sofas, focused intensely on their laptops with headphones on. On an isolated balcony corner, two UML cadre could be overheard planning a campaign rally for the March election.&nbsp; CUSTOMER SATISFACTION Nearby in Darbar Marg is another Himalayan Java on the top floor of a building overlooking Narayanhiti Palace. On Mandala Street up a flight of stairs and in JP Marg is another Java outlet. That makes four outlets within a 400m circle in Kathmandu. Over in Patan, the density of locations is even higher: within 1sq km in the Sanepa-Jhamsikhel- Pulchok area are eight Himalayan Java outlets.&nbsp; Himalayan Java’s franchise business model is unique for Nepal: there is no other food or beverage business that has pulled it off on this scale.&nbsp; “We want Java to become a part of the customers’ life, as a casual place to meet or rest,” says General Manager Diwakar Ojha, explaining that an interested party applies, is vetted and can buy a franchise for a certain location. The criteria is whether the franchise has the resources and capacity to handle running the outlet long-term.&nbsp; The investor must follow rules and regulations to ensure quality of the product, standard of service and interior décor. But the management, marketing, staffing and supply chain are all handled by Himalayan Java which charges a franchise fee and a percentage of sales.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260205100212_f1f71a5f440495f3a66c02ca81b12e0bd65f819b43b6b95bc7e6dd25692ad3e1.jpg" data-media-id="editor_2" data-image-id="20260205100212_f1f71a5f440495f3a66c02ca81b12e0bd65f819b43b6b95bc7e6dd25692ad3e1" data-rendition-name="original" width="641" height="960" loading="lazy" alt="Himalayan Java coffee"> </figure>  Some investors are prolific – there is one in Kathmandu who opened three franchises in two years. The outlets have a common ambience, but each location has its own unique vibe as well.&nbsp; “Same same, but different. We put a lot of thought into it,” Ojha says. “We are careful about location, and getting the design and feel of the cafe to gel with the surroundings. We integrate core things like furniture, bar counters, colours, but each one is unique.” A key value of the brand is consistency, and the main challenge is managing the supply chain. There are sister companies under the Himalayan Java brand: The Bakery, Bakery School, Roastery, Barista School, Import and Export, and Brewshala, where coffees and drinks are trialed and experimented. The hub of the operation is the Roastery and the Bakery in Bluebird Mall from where all beans and baked goods are sent to the outlets. Java now also has its own coffee farm in Ilam, and the rest of the beans are sourced from the Nepal Coffee Company, and it sells only Nepali coffee sourced from small farmers. Java has also evolved into co-working and lounge-type spaces where customers can meet, explore and follow social media trends like Matcha the green-tea based beverage that Java modified into the popular Blended Matcha, a Matcha Latte, and a Strawberry Matcha drink. Himalayan Java Coffee recently received a large investment from NIBL Equity Partners who acquired a 28.8% stake opening the way for more expansion (pictured). Plans are afoot to open more franchises across Nepal and in New Delhi. Despite its popularity, one criticism is the price point. An Americano can cost up to Rs355. Ojha justifies this saying the price reflects the high overheads.&nbsp; One solution is Himalayan Java Express, designed much more pragmatically, mainly for to-go orders where drink prices are slashed by half. &nbsp;&nbsp;

Java in the Himalaya

The arrest on 25 January of six people on charges of insurance fraud has brought the scandal of fake helicopter rescue of trekkers in Nepal to the fore once more, denting the image of the tourism industry. Trekking companies, helicopter operators and hospitals were said to be in cahoots to carry out medical evacuations that were not necessary. In some cases, even the rescues were said to be fake with false names of ‘patients’ and their ailments. The six who were arrested were charged by the Central Bureau of Investigation (CIB) with <a href="https://asia.nikkei.com/business/travel-leisure/nepal-s-rescue-helicopter-scam-casts-doubt-on-tourism-credibility2" target="_blank">cheating insurance companies</a>of millions of dollars in the past four years with more than 300 <a href="https://nepalitimes.com/multimedia/heli-rescue-fraud-tarnishes-nepal-s-image" target="_blank">fake chopper medevacs</a> from the base of Himalayan peaks to hospitals in Kathmandu. Nepali personnel of three companies, Nepal Charter Service, Everest Experience and Mountain Rescue were accused of heavily overcharging &nbsp;for fraudulent rescues, faking or inflating medical bills, and claiming payment of over $18 million over the years, the CIB said.&nbsp; In some cases, trekkers themselves who do not want to walk back along the same trail to Everest Base Camp or other routes, and pretend to be sick, are also said to be involved in the scam. “Tourism will attract opportunists, that is true everywhere,” explains Raj Gyawali of <a href="https://socialtours.com/" target="_blank">socialtours</a> and a partner of <a href="https://ethicaltravelportal.com/" target="_blank">Ethical Travel Portal</a>. “Our responsibility as an industry is to weed them out, protect what matters, and keep tourism rooted in passion, integrity, and long-term value.” The scam got <a href="https://www.nytimes.com/2026/02/03/world/asia/mount-everest-helicopter-insurance-fraud.html" target="_blank">wide international attention</a>, and tainted the reputation of Nepal’s mountain tourism sector that employs up to 1 million people. International media headlined allegations that trekker food was spiked to cause diarrhoea to force evacuations. Despite the bad publicity, tourism operators see a silver lining. It shows that Nepal is cleaning up its act and the system is working. Besides, the cheaters are in a minority in an industry that provides some of the best organised and most experienced mountain tourism service in the world.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260210040232_141217f8e5dc8a584642f7cb8d130de1a05cdcf149467334f9ab4e392f7d67aa.jpg" data-media-id="editor_5" data-image-id="20260210040232_141217f8e5dc8a584642f7cb8d130de1a05cdcf149467334f9ab4e392f7d67aa" data-rendition-name="original" width="1584" height="1500" loading="lazy" alt="Helicopter medevac scam NT"> </figure>  “After years of talk and investigation, we are now seeing arrests and it’s encouraging to finally see action. This didn’t happen overnight,” Gyawali says. “The post GenZ interim government works with much less politics, we are seeing a functional system for the first time in decades in Nepal.”&nbsp; This is not a new story. <a href="https://archive.nepalitimes.com/article/nation/Insurance,361" target="_blank">Nepali Times first covered </a>trekking insurance scams in 2013, following up on an investigation by the British Mountaineering Council in <a href="https://www.thebmc.co.uk/" target="_blank">Summit magazine</a> about insurance fraud involving fake helicopter rescues. In <a href="https://nepalitimes.com/multimedia/heli-rescue-fraud-tarnishes-nepal-s-image" target="_blank">another news item</a> published in this paper in 2018 cited an investigation by insurance watchdog <a href="https://www.travellerassist.co/" target="_blank">Traveller Assist</a> which showed that a third of the 1,600 helicopter rescues in Nepal that year were fraudulent, costing up to $4 million. Insurance companies gave the Nepal government <a href="https://nepalitimes.com/banner/nepal-trekking-industry-in-damage-control-mode" target="_blank">an ultimatum</a> to clean up its act, and an investigation committee was formed and 13 companies said to be involved were named. It now looks like although insurance fraud declined, it was still continuing to some extent till 2025. In the cut-throat competition in Nepal’s mountain tourism industry, companies undercut each other, and there are some trying to make a quick buck. These rotten apples spoil the whole barrel. Given Nepal’s remote terrain and extreme weather along Himalayan trekking routes, helicopter rescues are vital in saving hundreds of lives every year, rescuing trekkers and mountaineers suffering from acute mountain sickness, stomach or lung infections. “Nepal has a unique advantage over other Himalayan countries like India, Pakistan, or China because it allows private helicopter companies to conduct rescues,” Gyawali says. “This makes rescues faster and more accessible, often life-saving.” The real problem is that sometimes rescues take too long because of &nbsp;permission needed from multiple government agencies to conduct rescues near the Chinese border, which is considered sensitive. Last year, a mountaineer died on Himlung Himal because a helicopter company could not get clearance in time for a rescue.

Fake rescues hurt Himalayan tourism

One aspect of colonial cartography of South Asia leaps out in this must-see exhibition – while the coastline of India, Ceylon, Burma are extraordinarily accurate in maps made more than 200 years ago, the Himalayan hinterland is wholly approximate and inexact. The accuracy improves as modern survey techniques are introduced by atlas-makers, but even then formidable terrain and forbidden lands thwart precision. Map aficionados will be fascinated by the 40 antique maps from The Rajbhandari Collection on display at the exhibition ‘Imaging South Asia: Nepal in the Making at Kathmandu Art Gallery’ at Baber Mahal Revisited from 13 February - 17 March.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_0cbeb88674a97c6292e2b43b2135df219257ca641cbd4723e9aabf5541c2b258.jpg" data-media-id="editor_0" data-image-id="20260211090252_0cbeb88674a97c6292e2b43b2135df219257ca641cbd4723e9aabf5541c2b258" data-rendition-name="original" width="4160" height="3485" loading="lazy" alt="Map Land NT"> </figure>  The first maps were made on clay tablets and cave paintings, but maps improved with Chinese maritime charts of Southeast Asia and beyond. Nautical maps created during the European Age of Exploration used geometry, latitude and longitude. Competition for colonial riches rested on the accuracy of these maps. The Portuguese had the lead in the 15th century, but were soon overtaken by the Spanish with Columbus voyaging to India but landing up in the Americas.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_1fb21d20cf29b408119f5279ce666e73dee089356e52277d753a27e3440364eb.jpg" data-media-id="editor_1" data-image-id="20260211090252_1fb21d20cf29b408119f5279ce666e73dee089356e52277d753a27e3440364eb" data-rendition-name="original" width="4030" height="3407" loading="lazy" alt="Map Land NT"> </figure>  European mapping of the coastline of peninsular India &nbsp;began after Vasco de Gama sailed around the Horn of Africa to arrive at what is now Kerala in 1498. The British and French struggled for control of India, and the Carnatic Wars of the 19th century were extensions of their rivalry in Europe.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_0fb0969dc3e07c5a77123b4aa5eb0f11d2ffea73c108077f7e4d1892d6bd4bb6.jpg" data-media-id="editor_2" data-image-id="20260211090252_0fb0969dc3e07c5a77123b4aa5eb0f11d2ffea73c108077f7e4d1892d6bd4bb6" data-rendition-name="original" width="2842" height="4160" loading="lazy" alt="Map Land NT"> </figure>  While most of the maps at this exhibition were commissioned by the East India Company and the Survey of India, there are quite a few made by Parisian cartographers and feature Pondicherry and the Danish trading outpost at Tranquebar. Followed chronologically, the maps show improvements in cartographic techniques. The earliest French map L’Inde of J D Barbié du Bocage from 1760 is a copper engraving with hand painted colours demarcating boundaries. ‘Napaul’, ‘Gorka’ and ‘Catmando’ are depicted. The rivers of India are precisely drawn, as is the Brahmaputra (Yarou Tsanpou) even though locations across the rest of Tibet are rough estimates.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_486dc1b12f391550516be164f27170d4702a69b5125c1b8c4b10f76fdae4c0b1.jpg" data-media-id="editor_3" data-image-id="20260211090252_486dc1b12f391550516be164f27170d4702a69b5125c1b8c4b10f76fdae4c0b1" data-rendition-name="original" width="1675" height="604" loading="lazy" alt="Map Land NT"> </figure>  The 1781 map Carte des Indes en deçà et au-delà du Gange of Rigobert Bonne has slightly more detail about Nepal with even ‘Pattan’ and ‘Bagmally’ river marked. William Darton’s 1802 map has ‘Nogarcot’ and ‘Mocaumpour’ wrongly placed to the east of the valley of ‘Napaul’. Samuel Arrowsmith’s 1828 map ‘India and the Birman Empire’ has Nepal’s rough boundaries demarcated for the first time within a hand-coloured green border, with the mountain ‘Dholagiri’ and ‘Dhunchi’ appearing for the first time. The 1835 map by Boston-based American cartographer Thomas Bradford has a more precise ‘Burrampooter’ river with ‘Sgigatoe’, ‘Lassa’ and ‘Bootan’ marked. In Nepal, ‘Batgan’, ‘Macwampour’ and ‘Lelit Pattan’ appear near ‘Catmandu’.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_5509c8e043a74b3e34e399c0684ca8eef7fc79953ee0dd18aedc738e8189d552.jpg" data-media-id="editor_4" data-image-id="20260211090252_5509c8e043a74b3e34e399c0684ca8eef7fc79953ee0dd18aedc738e8189d552" data-rendition-name="original" width="4094" height="3646" loading="lazy" alt="Map Land NT"> </figure>  One striking landmark appears consistently through a century of map-making from 1760 onwards, and that is the sacred Yamdrok Tso near Lhasa. It is precisely located, although it is drawn as a circular lake called ‘Jamdro or Palto Lake’ till J Bartholomew’s lithographic map in 1893 Constable’s Hand Atlas of India. Bartholomew’s map is also where ‘Mt Everest’ appears for the first time with its altitude ’29,002ft’ after Peak XV was calculated to be the highest mountain in the world by the Survey of India. Meanwhile, ‘Kinchinjunga’ appears in some of the earlier maps from the mid-1800s, north of ‘Dorjeloo’. The maps did not only have locations of towns, rivers and mountains but also other interesting facts about places. History buffs will find much to pore over in these maps.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_8280c979b175946a2ac29e22b7a2b2427f7f36f22093c3456524f1f529311498.jpg" data-media-id="editor_5" data-image-id="20260211090252_8280c979b175946a2ac29e22b7a2b2427f7f36f22093c3456524f1f529311498" data-rendition-name="original" width="4160" height="2762" loading="lazy" alt="Map Land NT"> </figure>  Many have sites of major British battles while conquering India. The ‘British India’ map by J Rapkin has dates and times of the ‘Principle Massacres’ during the Indian Mutiny of 1857. The map also shows India’s growing railway network with completed lines and those ‘in progress’. Narrow gauge lines can be seen in successive maps snaking up to the Nepal border to haul sal logs for sleepers for India’s expanding railway network. Many maps were drawn by British military intelligence. One even has the Kuti route of the Nepal Army while invading Tibet in 1791, and the Chinese Army’s advance in hot pursuit through Kerung to Nuwakot.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_a41ff6a7453f95d1e83c12ed3f831911d65ebd4d2389e0e3b774252dfa037132.jpg" data-media-id="editor_6" data-image-id="20260211090252_a41ff6a7453f95d1e83c12ed3f831911d65ebd4d2389e0e3b774252dfa037132" data-rendition-name="original" width="1173" height="679" loading="lazy" alt="Map Land NT"> </figure>  Pre-1857 maps show the western Tarai as a part of British India, but in later ones the Naya Muluk districts of Banke, Bardia, Kailali and Kanchanpur have reverted back to Nepal. The maps clearly mark Nepal as an independent nation, and represent it differently from Indian princely states. The Atlas of India of 1846 shows the ‘Dominion of the King of Nepal’.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260211090252_52132146d9ee8b922560b98e90d866149715d7f53ced408b5f3af8f3b142a07b.jpg" data-media-id="editor_7" data-image-id="20260211090252_52132146d9ee8b922560b98e90d866149715d7f53ced408b5f3af8f3b142a07b" data-rendition-name="original" width="4149" height="3682" loading="lazy" alt="Map Land NT"> </figure>  Visitors will be curious about Nepal's claim to Limpiyadhura and Lipu Lek. A map by Mason &amp; Payne from 1846 clearly shows the ‘Kallee River’ as being the border between Nepal and British India, with Kalapni within Nepal. The Lipu Gad tributary (which India claims is the border) is not marked. Some other maps, however, seem to show the border not following the Kali river to Limpiyadhura but the tributary up to Lipu Lek.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026021112024_9a1b6055a9fbecca7b64c3882c205efb336aac03e64ecf43a2044cb079cd699f.jpg" data-media-id="editor_8" data-image-id="2026021112024_9a1b6055a9fbecca7b64c3882c205efb336aac03e64ecf43a2044cb079cd699f" data-rendition-name="original" width="875" height="1215" loading="lazy" alt="Map Land NT"> </figure>  Imaging South Asia: Nepal in the Making&nbsp; Kathmandu Art Gallery, Baber Mahal Revisited&nbsp; 13 February – 17 March For guided walk-throughs and curatorial tours: +977 1-5318048 Panel discussions: -Cartographic Practices from the &nbsp;Gorkha Polity to the Present with Buddhi Narayan Shrestha and Kanak Mani Dixit&nbsp; Friday, 13 February, 4pm -Mapping Beyond Borders with Akhilesh Upadhyay and Amish Raj Mulmi Wednesday, 25 February, 4pm&nbsp;