Nepal had long been noted for steady progress in digital freedom, e-governance, and the digital economy. But of late, it is now increasingly moving towards the ranks of countries imposing restrictions on social media and internet access, experts say.

Last year, the country entered the internet shutdown list for the first time after temporarily banning the video-sharing platform TikTok.

Analysts warn that the government’s recent move to block unregistered social media platforms could have serious consequences, potentially harming Nepal’s international reputation, straining ties with global tech giants, and directly impacting thousands of local content creators.

Experts warn that the decision goes beyond limiting citizens’ freedom of expression or access to daily services, with potential repercussions for economic relations and global rankings.

Nara Bahadur Thapa, former executive director of the Nepal Rastra Bank, said actions that negatively impact foreign platforms could undermine the country’s investment climate, particularly as Nepal prepares to graduate from the least developed country (LDC) status in 2026. He said such measures could also negatively influence Nepal’s sovereign credit rating.

“Once Nepal graduates from the LDC category, foreign aid and grants will decline, and concessional loans will carry higher interest rates,” Thapa said. He cited the World Bank’s increase of interest rates from 0.75 percent to 1.5 percent and the Japan International Cooperation Agency’s recent rate hike. “FDI is the only viable alternative to compensate for the reduction in aid. Any action that discourages or threatens foreign investors sends the wrong signal. At a time when we need policy stability, the government is creating confusion. Our development approach is inconsistent.”

The restrictions have created additional risks for the domestic economy, particularly for IT and digital service exporters. Rijan Shrestha, founding president of the Nepal Association for Software and IT Services (NAS-IT), said the social media bans are complicating international business.

“The government’s decision affects Nepal’s reputation and sends a signal of unpredictability,” Shrestha said. “Foreign clients are hesitant to engage with us. Many Nepali firms rely on automation, digital marketing, and business process outsourcing using social media platforms. Blocking access has a direct impact on operations and potential investment. Countries that restrict social media are not attractive destinations for IT companies or investors.”

Digital rights advocate and lawyer Santosh Sigdel warned that Nepal, previously recognised as an open and liberal society, risks joining countries such as North Korea, China, Pakistan, Afghanistan, and Turkey in restricting digital freedoms. He pointed out that even blocking one or two platforms can reduce global freedom rankings.

“The plan to block multiple platforms will significantly affect Nepal’s ranking in internet freedom, e-governance, and freedom of speech indices,” Sigdel said. “It will also harm rankings related to civic space and expression. Many e-governance services rely on log-in through platforms like Facebook or X. Blocking access means citizens lose entry to government services, directly reducing e-governance scores.”

Advocacy group Access Now, which campaigns against internet restrictions, listed Nepal as a ‘new offender’ after last year’s TikTok ban. Their February 2024 report again classified Nepal among countries experiencing internet shutdowns.

In 2024, Nepal experienced one internet shutdown. Globally, 54 countries reported 296 shutdowns: Myanmar 85, India 84, Pakistan 21, and Russia 19. Shutdowns include cutting mobile or fixed-line internet, blocking platforms like Facebook, WhatsApp, Telegram, or X, or limiting internet access in certain districts or cities. “Blocking a platform is considered a shutdown because it restricts user access and disrupts information flow,” the report noted.

Analysts also warn that the bans could affect Nepal’s performance in indices such as the Ease of Doing Business and open economy indicators. Online access is a key component of e-governance indices, and restricted access will inevitably lower Nepal’s scores.

According to the UN, Nepal ranks 119 out of 193 countries on the e-governance development index, scoring 0.5781, an improvement from 125 in 2022.

However, in the e-participation index, which evaluates how governments use digital tools to provide services, Nepal ranks 152, highlighting persistent challenges.

Former finance secretary Laxman Aryal said the government’s move may appear logical from a regulatory perspective, but the broader implications are significant.

“Platforms must comply with regulations and cooperate with government requirements,” Aryal said. “But if these matters are not managed diplomatically, Nepal’s international relations will suffer. In today’s open societies, technology use is closely tied to social media. Decisions like these must be made carefully, considering economic, diplomatic, and digital governance consequences.”