Government Directs Public Agencies to Prioritize Nepali Products and Services

Kathmandu, August 20, 2026

The Government of Nepal has directed public agencies across the country to give priority to domestically produced goods and services when making purchases, as part of a wider effort to support Nepali businesses, create jobs and reduce dependence on imported products.

The directive was issued by the Office of the Prime Minister and Council of Ministers following instructions from Prime Minister Balendra Balen Shah and consultations with domestic entrepreneurs.

The new policy applies across different levels of government. Federal ministries and agencies, provincial authorities, local governments and Nepali diplomatic missions abroad have all been instructed to follow the domestic product priority when purchasing goods and services.

Local Products to Get Priority in Government Purchases

Under the directive, government offices and other public institutions must prioritize Nepali products when purchasing commonly required items.

This includes stationery, furniture, construction materials and food products. The move could increase demand for products manufactured or supplied within Nepal because government institutions are major buyers of such goods every year.

The government has also extended the policy beyond regular office purchases. Local handicrafts must be prioritized for government meetings, official ceremonies and gifts.

This provision is expected to provide additional opportunities for Nepali handicraft producers and businesses involved in traditional and locally made products.

New Requirement for Government Tenders

Government agencies have also been instructed to clearly include the domestic product priority in their bidding and tender documents.

This means the policy is intended to become part of the formal public procurement process rather than remaining only a general recommendation to government offices.

By including the requirement in tender and bidding documents, authorities aim to ensure that agencies consider domestic alternatives during procurement and that eligible Nepali producers and suppliers receive greater opportunities to provide goods and services to public institutions.

Regular Monitoring and Quarterly Inspections

The government plans to monitor whether public institutions are properly following the directive.

Authorities will conduct regular monitoring along with quarterly inspections to check implementation. Government entities covered by the directive will therefore be expected to show that they are following the new requirements while making purchases and preparing procurement documents.

The monitoring system is intended to ensure that the policy is implemented across federal, provincial and local levels rather than being limited to selected government offices.

Government Aims to Support Nepali Businesses

According to the Prime Minister’s Secretariat, one of the main goals of the initiative is to encourage Nepali entrepreneurs by creating stronger demand for products and services produced within the country.

Giving domestic businesses greater access to government procurement could help local companies increase sales and production. The government also expects the policy to contribute to employment by creating more opportunities for businesses and workers involved in domestic production and supply.

Another major goal is import substitution. Nepal depends on imported goods for a significant part of its consumption, and encouraging government institutions to purchase locally available alternatives is intended to keep more spending within the domestic economy.

The government believes stronger demand for Nepali products can help stimulate economic activity across the country while encouraging entrepreneurs to expand their businesses and create additional employment.

Policy Covers Government Bodies at Home and Abroad

The broad scope of the directive means the domestic product priority will not be limited to central government offices in Kathmandu.

Provincial governments and local bodies have also been instructed to implement the policy. Nepali diplomatic missions operating in other countries are included as well.

With the directive now issued, attention will turn to its implementation and how effectively public agencies incorporate domestic product requirements into their purchasing decisions and tender processes.

Regular monitoring and quarterly inspections are expected to play an important role in determining whether the policy succeeds in increasing the use of Nepali goods and services across government institutions.