Remittances in Nepal: Economy, Migration, Geopolitical Vulnerability and the West Asia Crisis
Summary
Nepal's remittance economy has grown to nearly 29 percent of GDP by FY 2024–25, driven by large-scale labor migration primarily to Gulf countries, fueling rural livelihoods but also raising concerns about exploitation and geopolitical risks.
Key Points
- Nepal's remittances reached USD 11 billion in 2023, constituting 26.6% of GDP, and rose to 28.6% in FY 2024–25.
- Over 7% of Nepal’s population lives and works abroad, mainly in GCC countries, with the UAE being the largest host nation.
- Remittances finance Nepal's trade deficit and maintain foreign exchange reserves covering 16.4 months of imports.
- The Gulf's kafala system and high recruitment fees expose Nepali migrant workers to exploitation and health risks abroad.
