More than three and a half decades after Nepal embraced economic liberalisation, the country has failed to develop enough large employers to absorb its growing workforce, forcing around 2,000 young people to seek jobs abroad every day.

Economic reforms were introduced to encourage private investment, production, and trade. But political instability, internal conflict, inadequate infrastructure, and weak governance have prevented the country from creating enough jobs.

Prakash Kumar Shrestha, a former vice-chairman of the National Planning Commission, said the deteriorating investment climate and the government’s inability to increase capital expenditure in recent years had directly affected job creation.

“Investment in the service sector has expanded somewhat in recent years, but it generates relatively fewer jobs,” he said. “Significant employment opportunities come when investment expands in industrial and manufacturing sectors. Those sectors remain weak in Nepal.”

Nepal has had 32 governments in the 35 years since multi-party democracy was restored in 1990. Around 500,000 young people enter the labour market every year, yet the number of business groups directly employing more than 10,000 people remains small.

Golchha Organisation, Chaudhary Group, IME Group, Vishal Group, Shankar Group, Golyan Group, Triveni Group, and Bhatbhateni Supermarket are among the country’s largest private-sector employers. Their investments span industry, trade, financial services, energy, manufacturing, agriculture, tourism, and retail. Some employ more than 20,000 people directly.

Although these business groups have created employment, their combined contribution is not enough to absorb the pressure on the wider labour market. While new workers continue to enter the workforce, established businesses are struggling to expand investment and production capacity. Businessmen and entrepreneurs say Nepal has failed to attract new industrial enterprises capable of employing thousands of people over the past decade. Even existing factories are not operating at full capacity.

According to Shrestha, private-sector credit growth of around five to six percent in recent years, coupled with weak government capital expenditure, has further restricted opportunities for new jobs.

The expansion of the service sector has also been concentrated largely in trade, hospitality, and traditional financial services. Investment in higher-value sectors such as information technology, knowledge-based services, innovation, artificial intelligence, data centres, and digital technologies remains below expectations.

Despite these constraints, some major private-sector employers continue to provide jobs to thousands of people within the country.

Chandra Prasad Dhakal, chairman of IME Group and a former president of the Federation of Nepalese Chambers of Commerce and Industry, said around 20,000 people were currently employed directly across the group’s businesses. More than 1,000 additional jobs are expected once the group’s projects under construction become operational.

“More than 81 percent of total employment in the country comes from the private sector. Since the private sector bears the main responsibility for creating jobs, the government must create an environment conducive to investment expansion,” Dhakal said. “Although good policies and commitments to reform are announced, the failure to implement them has undermined private sector confidence.”

Golchha Organisation also says it employs more than 10,000 people directly. One of Nepal’s oldest business groups, its investments began with jute mills and have since expanded into steel, food products, sugar, electrical goods, automobiles, financial services and technology.

Ramlal Golchha was one of the promoters of Biratnagar Jute Mills, Nepal’s first industrial enterprise. The family’s fourth generation is now involved in the business.

“More than 10,000 people are directly employed across our group,” said Abhimanyu Golchha, a director of Golchha Group. “If the investment climate improves and businesses can expand, we can create even more jobs.”

Chaudhary Group says it directly employs around 15,000 people in Nepal. Its investments cover food and beverages, hotels, financial services, energy, education, and manufacturing. The group is also pursuing several projects, including a chemical fertiliser plant, which are expected to generate additional employment once operational, said its general manager, Madhusudan Poudel.

Triveni Group employs more than 15,000 people, according to director Aditya Sanghai. The group aims to create another 300 to 500 jobs over the next three years. Projects including cable cars and hydropower plants are under construction and are expected to add to its workforce once completed.

Shankar Group also says it provides direct employment to around 15,000 people through more than 100 businesses and industrial enterprises. Its investments span steel, cement, automobiles, financial services, agriculture, and hydropower.

Bhatbhateni Supermarket is a major retail sector employer. Chief Executive Officer Panu Poudel said the company currently employs more than 10,000 people. It is working to reopen stores damaged during last year’s Gen Z protests and open four new outlets. The company expects to generate another 2,000 to 2,500 jobs over the next year and a half.

Golyan Group also reports more than 10,000 direct employees. Its investments span agriculture, manufacturing, renewable energy, and hospitality. Chairman Akshay Golyan said the group plans to create additional jobs through Reliance Spinning Mills and its energy and hotel businesses.

These examples show the potential of private-sector expansion to create large numbers of jobs within Nepal. But the failure to foster an environment that encourages fresh investment and industrial growth continues to limit that potential.

Foreign employment figures underline the scale of the challenge. In the fiscal year 2024-25, Nepal issued more than 839,000 labour permits for overseas employment. The figure includes both new and renewed permits, and reflects the country’s reliance on foreign labour markets and the shortage of job opportunities at home.

Remittances from migrant workers contribute to foreign exchange reserves, boost consumption, and help reduce poverty. But the continued departure of skilled and semi-skilled workers also increases the risk of labour shortage for domestic industries. Over time, this could affect Nepal’s production capacity, human capital, and competitiveness.

Shrestha said the government needs to increase capital expenditure, encourage private investment, and ensure markets for domestically produced goods. Manufacturing cannot expand without export promotion, infrastructure development and policy stability, he said.

Economic liberalisation in Nepal was intended to make the private sector the driving force of the economy. Yet, 35 years later, the country has still failed to develop enough large employers. Policy uncertainty, administrative hurdles, inadequate infrastructure, high industrial production costs, and limited market access continue to discourage business expansion.

As more young people leave the country in search of work, the question is no longer simply how many jobs Nepal can create. It is also about the kind of economic structure the country is building, and whether it can offer its own young people a viable future at home.