On May 27, 2025, Nepal Economic Forum (NEF) hosted its flagship event, NEFtalk, on the theme ‘Rethinking Migration and Remittance in Nepal’. The event disseminated the findings of NEF’s research on migration and remittances in Nepal, funded by the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO), and conducted over a period of eight months.
Remittance flows have drastically increased in the past few decades, surpassing both Foreign Direct Investment (FDI) and official development assistance. Considering this, the NEFtalk unpacked recent trends in migration and remittances, analysed the role that they play as dual engines of Nepal’s modern economy, and explored the possibility of a middle path between people working at home and overseas.
The event began with a presentation from Rojesh Bhakta Shrestha on key findings from the aforementioned NEF study. In this, Rojesh outlined trends regarding the number of migrants, their composition, and characteristics of the remittance market. According to the research he presented, migration has seen a significant growth over the decades, and, despite a dip during the COVID-19 pandemic, it has seen a strong rebound with an estimated 800,000 departures in FY 2024/25. He mentioned that there are a total of 2.2 million Nepalis living abroad, according to the 2021 census.
In terms of the composition of migrants, Rojesh drew attention to the shifting demographic in labor migration. He noted that most migrants today are young (61% aged 15–30), with female representation rising from 11% to 17% since COVID-19. He also highlighted that Madhesh, Lumbini, Koshi, and Sudurpaschim provinces collectively account for over two-thirds of labor permits.
Rojesh noted that, as a result of increasing migration, remittance inflows have ballooned from USD 113 million (2% of the GDP) in 2000 to an estimated USD 12 billion (26.5% of the GDP) in 2025, averaging nearly USD 1 billion per month in FY 2024/25. Further, he underscored that although reliable data sources are absent, it is estimated that informal channels still carry about 25% of total remittance flows, equating to around USD 3.1 billion a year.
In his keynote speech, Giuseppe Savino gave a global overview on the increasing importance of migration in the face of aging populations, declining fertility rates, and rapid technological change. He highlighted that, by 2050, developed economies may face a shortfall of 85 million skilled workers. While Giuseppe noted that migration can be a political flashpoint or humanitarian concern, in developed countries, the reality of demographic and technological trends means that it will become an economic necessity.
As a result, Giuseppe urged the audience to look at migration not through the lens of a problem to be managed but rather an opportunity to be harnessed. He noted that this is particularly true for Nepal as the increased demand for labor could offer the country an opportunity to leverage its demographic dividend by sending workers to high-income countries through formal and cost-effective channels. Further, touching upon the increasing trend of high-skilled labor migration from Nepal, he also predicted that countries with welcoming policies and streamlined processes for work permits will be best-placed to attract this valuable segment of workers.
In her remarks, Ambassador Johnston painted a vivid portrait of the Nepali community in Australia, highlighting its impact on both economic and cultural development. Over 200,000 people of Nepali ethnicity, including 64,000 students, call Australia home, an increase from 35,000 in 2013. She also noted that Nepali is the third- and second-most spoken language in Canberra and Hobart, respectively.
On the other hand, Ambassador Johnston brought to light the fact that, despite the large size of the Nepali population in Australia, formal remittance channels remain highly underdeveloped. She attributed this to Australian banks withdrawing correspondent banking services from Nepal due to a riskaverse nature brought on by an international financial scandal. She noted that this gave way to the emergence of inventive forms of money transfer, which now play a major role in remittance flows between the two countries. Besides this, the Ambassador emphasized the need for an investmentfriendly environment in Nepal for entrepreneurs and the diaspora to encourage formal remittances and, ultimately, the diaspora’s return.
Highlighting the fact that remittances held up in Nepal during COVID-19 despite migration collapsing, Ambassador Fenn outlined various steps to be taken by Nepal to capitalize on migration in the short run and reduce it in the long run. He emphasized that, to make use of the diaspora, Nepal could develop social-integration pathways for returning migrants, like those by India and Bangladesh that have developed “red carpet” reintegration policies. Additionally, he underscored the importance of keeping the diaspora connected to Nepal.
Besides this, to reduce migration in the long run, Ambassador Fenn highlighted the need for creating a business environment for foreign private investment and improving the situation of education. He remarked that while Nepal has taken impressive strides in achieving the fourth Sustainable Development Goal (SDG) on quality education, learning outcomes have not witnessed similar improvements. Thus, he suggested exploring the untapped potential of transnational education, proposing that foreign universities offer locally priced programs in Nepal. Ambassador Fenn also lauded the talent present in the country and shed light on the need for both the creation of more job opportunities domestically and better awareness of the available opportunities.
Suman Pokharel, in his comments, contextualized the trends of remittance and highlighted Global IME Bank’s efforts to transform remittance services in Australia. He discussed the evolution of remittances from physically sending money through family and friends to bank cheques to digital mediums. He noted that Nepal’s banking system has acted as an enabler for migration by providing reliable and innovative banking tools to workers. He also shed light on increased diasporic capital market activity, giving the example of more than 25,000 Nepalis opening DEMAT accounts in South Korea.
Meanwhile, touching upon Global IME Bank’s engagement in Australia, Suman shared that the bank has a physical presence in the country and is working to obtain permission from the Australian government to upgrade to a full branch and provide international banking services, including remittance services. He also shared that the bank has launched micro-loan schemes that provide up to USD 5,000 in seed capital to help returnee migrants start SMEs in the country.
The moderator of the panel discussion, Sujeev Shakya, besides summing up the conversation, noted that most migration policies are formulated in Kathmandu and are often disconnected from provincial realities. Thus, he called for a more ground-up, evidence-based approach to policy design, informed by the lived experiences of high-migration districts.
Sujeev also urged stakeholders, from the government, financial institutions, multilateral partners, and the extensive Nepali diaspora itself, to co-create an ecosystem that turns remittance inflows into engines of entrepreneurship, human capital development, and private investment. He emphasized that, if successful, the next chapter of Nepal’s migration story could see remittances evolve from a safety net into a growth springboard that can propel the country towards an upper-middle-income status.
Formal remittances into Nepal are reaching record highs, but the use of informal channels remains significant. Remittances have grown from USD 113 million in 2000 (2% of GDP) to USD 11 billion in 2023 (26.5% of GDP) and are expected to surpass USD 12 billion in FY 2024/25, with an estimated further USD 3.1 billion sent informally to Nepal. Most remittances are used for consumption and education, with only 6.5% used for investment or savings.
Driven by aging populations, declining fertility rates, and the rapid pace of technological change, developed economies could face a shortfall of up to 85 million skilled workers by 2025. Thus, though migration has become a political flashpoint in many countries, it is also an economic necessity. Developed economies are competing to attract foreign workers, which could offer an opportunity for Nepal to leverage its narrowing demographic window.
High-skilled migrants in the Nepali diaspora, who are a valuable pool of capital and expertise, should be encouraged to invest in and return to Nepal, similar to the situation in India. Some policy options could include permitting dual citizenship, offering investment incentives, providing reintegration support, or developing financial instruments to support returning migrants.
