Nepal gets three-year extension for LDC graduation

High production costs, weak industrial base, limited range of export products are challenges: FNCCI

Kathmandu, Oct. 30

The United Nations General Assembly has unanimously adopted a proposal to extend the preparatory period for Nepal and Bangladesh’s graduation from the list of Least Developed Countries (LDCs) until 24 November 2029.

The decision was taken at the 81st session of the UN General Assembly at the UN Headquarters in New York.

The Permanent Mission of Nepal to the United Nations in New York said the Assembly unanimously decided to extend the preparatory period for the graduation of Nepal and Bangladesh.

With this, Nepal has got the third extension for the graduation. It was due to graduating in 2018, but because of the severe economic impacts of the 2015 earthquake, the country got an extension.

Likewise, due to the impacts of the COVID-19 pandemic in economic and social sectors, the UN General Assembly granted another five-year preparatory period in November 2021, pushing the graduation date to November 2026. 

With this decision, Nepal has been granted additional time of three years to pursue the structural and institutional reforms required before graduating from the LDC category more effectively.

The Ministry of Foreign Affairs (MoFA) said that the country will use the extended period to enhance productive capacity, strengthen institutions and advance economic and social transformation. It will also focus on the effective implementation of its Smooth Transition Strategy, the 2030 Agenda for Sustainable Development and the Doha Programme of Action to ensure a smooth transition after graduation.

At a press briefing, MoFA's spokesperson Lok Bahadur Poudel Chhetri said that the government had decided to request the United Nations to defer Nepal’s scheduled graduation from the LDC category in November 2026 by three years, until November 2029.

In line with this decision, the Foreign Minister had formally written to the Chair of the United Nations Committee for Development Policy (CDP) on 13 May 2026 and to the UN Secretary-General on 15 May 2026.

In response to Nepal’s request, the United Nations General Assembly unanimously adopted a resolution on Thursday extending the graduation period. "With this decision providing Nepal with an additional three years to prepare, we are confident that the country’s graduation from the LDC category will be smooth and sustainable," said Chhetri.

He added that the government wants to make the graduation sustainable and irreversible.

 

FNCCI welcomes the extension

Meanwhile, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) welcomed the decision to extend Nepal’s preparatory period for graduation.

The FNCCI had long been urging an extension of the preparatory period, citing the potential impact of changes in international trade facilities, preferential market access, and technical and financial assistance currently available to Nepal following graduation.

"In particular, the FNCCI had highlighted the possibility that Nepali products could lose some of the facilities they currently enjoy in international markets, including duty-free and quota-free market access, following graduation," it said in a statement.

It had also identified high production costs, a weak industrial base, and a limited range of export products and markets as major challenges.

According to the statement, the FNCCI has consistently expressed concern that graduating without adequate improvements in productive capacity, industrial infrastructure, technology, productivity and quality could adversely affect Nepali industries, exports and employment.

However, FNCCI President Anjan Shrestha said that real success will be determined by how competitive the economy becomes in international markets afterwards, how much the country increase production and exports, and how many sustainable jobs it can create.

According to him, priority should be given to industrial production and infrastructure development, reducing production costs, promoting exports, preserving international market access, transferring technology, upgrading quarantine facilities, establishing accredited laboratories, removing non-tariff barriers (NTBs), and enhancing the capacities of small and medium-sized enterprises and women entrepreneurs.

 

Efforts being made to open border with China

Chhetri informed that the MoFA is coordinating with the line ministries and Chinese side in opening of the main border points with China.

"The Nepal-China Tatopani-Zhangmu border point, which had been obstructed following the devastating flood in the Bhotekoshi River, has been opened for three days for the movement of open freight vehicles," he said.

 

Similarly, following an assessment of the heavy damage caused by the flood, an inter-ministerial body coordination meeting was held on Thursday to discuss bringing the border point back into operation, reconstruction, and opening other border points.

The meeting was chaired by Foreign Minister Shisir Khanal. 

Published in The Rising Nepal on 31 October 2026.