Despite the government's professed commitment to economic diplomacy, Nepal’s efforts remain largely symbolic due to chronic underfunding, according to a senior official at the Ministry of Foreign Affairs (MoFA).

Economic diplomacy—the strategic use of diplomatic tools to advance a nation’s trade, investment, labor, and economic interests—has long been cited as a foreign policy priority. However, in practice, the government has yet to allocate sufficient resources to make that ambition a reality.

“The government has earmarked Rs 160 million for economic diplomacy this fiscal year,” said Kumar Raj Kharel, Joint Secretary at MoFA. “Of that, only Rs 3.5 to 4 million is dedicated to activities in the United States—a country with vast potential for trade, investment, and diaspora engagement.”

Kharel was speaking at the “Himalayan Dialogue”, an event organized by Foreign Affairs Media and Brandworth Company on Monday, April 7, in Kathmandu.

He emphasized that the limited budget restricts Nepali missions abroad from undertaking impactful promotional initiatives such as advertising campaigns or investment forums. “With the current allocation, embassies are barely able to conduct meetings with officials, politicians, and private sector representatives in host countries,” Kharel said.

Last fiscal year, MoFA had allocated just Rs 120 million for economic diplomacy—an amount officials argue is grossly inadequate given the country’s ambitions on the global economic stage.

Currently, economic diplomacy is managed by a unit within MoFA’s Policy and Planning Division. However, Kharel revealed that the ministry is in the process of establishing a dedicated division to strengthen strategic coordination. Additionally, MoFA is reviewing and updating its country-specific economic diplomacy strategies.

Nepal launched its first national strategy on economic diplomacy roughly seven years ago. The strategy outlines a framework for enhancing international trade, attracting foreign investment, managing labor migration, and engaging the Nepali diaspora more effectively.

At the same event, Chandra Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), underscored the need for clearer expectations from Nepali ambassadors. “In many countries, ambassadors are given specific economic performance targets. Nepal should adopt a similar model to make our diplomacy more results-driven,” he said.