Economic Development Initiatives in Madhesh Province
Madhesh Province, located in Nepal, is taking significant steps to enhance its contribution to the country's gross domestic product (GDP). Currently, the province contributes 13 percent to the national GDP, and the local government has launched several initiatives aimed at expanding economic activities, increasing production, and encouraging private sector investment.
The government has recognized that despite the province's rich natural resources, fertile agricultural land, large labor force, and potential for cross-border trade, its economic potential remains underutilized. To address this, they are implementing programs focused on expanding production, promoting industrialization, and attracting investment.
Jay Kumar Ghimire, Secretary at the Ministry of Industry, Commerce and Tourism of Madhesh Province, emphasized that tourism promotion is also a key priority alongside the expansion of the production sector. He stated:
"We have prioritised increasing investment in the province's industrial, business, and service sectors. Although a budget was allocated for an investment summit in the last fiscal year (2025/26), the event could not be held due to various reasons. Without sufficient investment in the industrial sector, we cannot significantly increase the province's GDP. Therefore, we plan to organise an investment summit in the current fiscal year 2026/27."
In addition to the investment summit, the government plans to launch programs to identify and promote the province's tourist destinations and attract more visitors. The initiatives also include developing industrial infrastructure, establishing agro-based industries, promoting small and medium-sized enterprises, improving cross-border trade management, and providing efficient administrative services to investors.
Ghimire outlined several strategies the government aims to implement to expand economic activities. These include:
- Agricultural modernisation
- Expansion of irrigation systems
- Development of industrial villages and industrial estates
- Promotion of tourism
- Better management of cross-border trade
- Creation of an investment-friendly legal environment
- Strengthening partnerships with the private sector
Dr. Bhogendra Jha, former vice-chairperson of the Madhesh Province Policy and Planning Commission, highlighted the importance of initiatives like an investment summit in creating a favorable investment climate. He stressed the need to convert investment commitments into actual projects, simplify legal and administrative procedures for industrial operations, and maintain regular dialogue with the private sector.
He said the province's economy cannot grow without the development of the production, industrial, trade, and service sectors. "The foundation of the province's economic growth is the expansion of economic activities," he added. "If we can establish industries, modernise agricultural production, create an investment-friendly environment, and increase private sector participation, we can significantly increase the province's GDP."
Economic Overview of Madhesh Province
According to the Nepal Rastra Bank's report on the economic activities of Madhesh Province published last year, the country's GDP at consumer prices was estimated at Rs 6.107 trillion in the fiscal year 2024/25, while Madhesh Province's GDP was estimated at Rs 804 billion. During the same period, the national economy was projected to grow by 3.99 percent, compared with 3.88 percent for Madhesh Province.
The report states that the agriculture, forestry, and fisheries sector contributes the largest share to the province's economy at 36.7 percent, while the mining and quarrying sector contributes the least at 0.15 percent. It also estimates the province's per capita GDP at USD 932 in 2024/25.
According to the report, food crop and other crop production increased by 14.01 percent, while vegetable and horticultural production rose by 9.79 percent. Milk, egg, and fish production increased by 3.13 percent, 9.64 percent, and 5.95 percent, respectively. However, fruit, spice, and meat production declined.
The Nepal Rastra Bank prepared the report using data from Saptari, Siraha, Dhanusha, Mahottari, Sarlahi, Rautahat, Bara, and Parsa districts. It examines the status, challenges, and prospects of key sectors, including agriculture, industry, services, and infrastructure development. The report also presents the province's overall economic situation and outlook for the upcoming fiscal year based on data from government agencies, development projects, industrial institutions, and stakeholder consultations and surveys.
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