Nepal

Current status

Nepal faces heightened political instability with 63 security incidents recorded over the past 30 days, including 22 critical-severity events concentrated around military actions, detentions, and economic blockades. Student protests over university union bans and antigovernment demonstrations regarding squatter demolitions signal escalating domestic tensions. The Bagmati province, which includes Kathmandu, appears to be the primary flashpoint for unrest.

Supply chain impact

• Textile and carpet exporters face elevated risk as civil unrest concentrates in Bagmati province, home to Nepal's manufacturing centers and main export infrastructure around Kathmandu.
• Indian importers of Nepalese tea, textiles, and handicrafts should prepare for potential border disruptions, as economic blockades have already been reported and Nepal's landlocked status makes it entirely dependent on Indian transit routes.
• Tourism-dependent supply chains including hotels, airlines, and adventure gear suppliers may experience demand volatility as political instability conflicts with Nepal's tourism promotion efforts.
• Cross-border logistics operations between India and Nepal face heightened screening and potential delays, particularly given recent arrests of Indian nationals in regional cybercrime operations.

Watch points

• Monitor for escalation of student protests beyond university campuses into broader antigovernment movements that could disrupt commercial districts and transport networks.
• Track any expansion of economic blockades from Bagmati province to other regions, which could severely impact Nepal's already limited trade corridors.
• Watch for Indian government response to detention incidents and potential reciprocal border restrictions that would effectively cut off Nepal's primary trade lifeline.