Industrial Capacity Utilisation Declined in Last Fiscal Year: NRB Report

Nepal’s average industrial capacity utilisation declined to 44.5 percent in the last fiscal year (FY 2024/25), down from 48.3 percent in 2023/24, according to the annual Economic Activities Study Report released by Nepal Rastra Bank on Thursday.

Sector-wise, tyre and tube industries recorded the highest capacity utilisation at 90.7 percent, while industries producing hydrogenated vegetable oil (banaspati ghee) posted the lowest utilisation at just 1.10 percent during the review year although the industries posted an increase in capacity utilization compared to the previous year.

Among the industries covered in the study, capacity utilisation increased in hydrogenated vegetable oil, soybean oil, biscuits, instant noodles, beer, cigarettes, synthetic textiles, other textile products, raw hides, plywood, tablet medicines, capsules, ointments, dry syrup, liquid medicines, soap, plastic goods, iron rods and sheets, steel products, GI pipes and transformers.

However, utilisation declined in mustard oil, processed milk, rice, wheat flour, animal feed, sugar, chocolate, processed tea, liquor, soft drinks, shoes, slippers and electricity generation.

Provincial data show that average industrial capacity utilisation increased in Madhesh and Karnali provinces, while it declined in Koshi, Bagmati, Gandaki, Lumbini and Sudurpaschim provinces.

During the review year, a total of 700 industries were registered with the Department of Industry. Of these, 235 were in tourism, 110 in service sector, 106 in manufacturing, 38 in energy, 185 in information and technology, 12 in agriculture and forestry, two in infrastructure, and 12 in mineral-based sectors. The registrations included 68 large, 54 medium, and 578 small industries.

The registered industries accounted for total capital mobilisation of Rs 2,581.18 billion and proposed employment for 35,141 people. Of the total registered industries, 543 were located in Bagmati Province.

Meanwhile, loans extended by banks and financial institutions to the industrial sector reached Rs 1,699.49 billion as of mid-July 2025, up 11.95 percent from mid-July 2024. In the corresponding period a year earlier, such lending had grown by 9.35 percent.

Industrial loans accounted for 30.42 percent of total outstanding credit. Of industrial lending, the largest share—35.27 percent—went to non-food manufacturing industries, followed by electricity, gas and water (26.26 percent), agriculture, forestry and beverage industries (21.85 percent), construction (11.70 percent), metal products, machinery and electronics (4.23 percent), and mining-related industries (0.69 percent).