Nepal’s Growing Outflow of Foreign Currency

Nepalis spent Rs 209 billion on international education and travel in a single year. That is a significant sum of money leaving a country with a small GDP. In fiscal year 2025/26, Nepalis spent Rs 141 billion on international education and an additional Rs 67.18 billion on overseas travel. Another concerning disparity can be seen in Nepal's overall travel account: Nepalis spent Rs 119 billion overseas while earning Rs 90.05 billion from foreign tourists. Education accounts for the majority of the outflow. From 2020/21 to 2025/26, 548,717 Nepalis acquired No Objection Certificates to study in 83 countries. Over the course of six years, Rs 556.68 billion was spent on education overseas. Tuition costs are simply one component of the expense. Students need foreign currency for rent, food, transportation, insurance and other everyday expenses. Some of them find work after completing their courses and eventually transfer money home to Nepal. Many, however, prefer to stay overseas. When this happens, Nepal loses not just foreign currency but also young people and the skills they acquire. Is it a capital flight? Not quite, at least in the conventional economic sense. Capital flight refers to individuals shifting money and assets overseas because they are concerned about economic or political instability, seek to evade taxes, or feel their wealth would be safer elsewhere. Paying for education or travelling abroad is not the same thing. People pay for services that they choose to use. However, the economic consequences cannot be ignored. Every dollar spent overseas leaves Nepal's foreign currency system.