Nepal's gold jewelry sector, a cornerstone of cultural and economic life, is under severe pressure from erratic import quotas, rising taxes, and rampant smuggling. For overseas jewelry buyers sourcing from or trading with Nepal, these disruptions signal potential supply delays, price volatility, and compliance risks that could affect procurement strategies and cost structures.
Supply-chain impact
The core challenge for Nepal's gold jewelry supply chain is the unpredictable import quota system. In 2022, the Nepal Rastra Bank slashed the daily import quota from 20 kilograms to 10 kilograms amid a foreign currency crisis, creating immediate shortages. Even after the quota was raised to 25 kilograms per day in 2025, supply remains insufficient to meet domestic demand of 25–30 kilograms daily. This inconsistency forces jewellers to rely on recommendation letters and face frequent bank shortages, disrupting production schedules for rings, necklaces, and bridal sets.
Compliance and logistics signals
Frequent policy shifts have fueled smuggling, undermining transparency and market regulation. In 2022, customs at Tribhuvan International Airport seized over two quintals (200 kilograms) of undeclared gold jewelry in just two months, following the infamous 33-kilogram scandal in 2018. Such illegal flows not only taint the industry's reputation but also create compliance risks for international buyers who may inadvertently source from informal channels. The government's tax changes—from a fixed-duty system to a 20% ad valorem duty in FY 2024/25, later reduced to 10%—add further complexity for importers tracking landed costs.
What buyers should watch
Overseas buyers should monitor Nepal's gold import duty and tax structure closely. The current 10% customs duty, combined with a 2% luxury tax and 13% VAT on diamonds and related transactions, raises the cost of formal imports. Additionally, Nepal's tax policies often mirror India's market dynamics; following India's increase in raw gold customs duty from 6% to 15%, Nepal may adjust its own duties to manage cross-border price gaps. This could lead to sudden cost changes for private-label brands and trading companies sourcing gold jewelry from Nepal.
China sourcing context
While Nepal is not a major gold jewelry exporter compared to China, the country's supply-chain instability may prompt buyers to consider alternative sourcing hubs. China's established OEM/ODM ecosystem for gold-plated brass, sterling silver, and stainless steel jewelry offers more predictable import policies and stable pricing. For buyers seeking bridal collections or high-carat gold pieces, Nepal's craftsmanship remains valuable, but the current regulatory environment demands careful due diligence on supplier compliance and sourcing transparency.
Source: Read the original report | Published: May 27, 2026