By The Straits Times | Created at 2026-09-04 06:06:25 | Updated at 2026-09-04 06:50:10
50 minutes ago
The clothes Ashok Kumar Chaurasiya wore as he fled his textile shop in Nepal’s Trishuli Bazaar last week were almost all he has left after the floods.
The 62-year-old trader, who moved from India to Nepal about four decades ago, had built six shops and stocked up ahead of the festival season.
On Aug 26, with only minutes between the warning and the water reaching the settlement, Chaurasiya, his son and mother raced to higher ground on a motorcycle. “If we had been 20 seconds late, three of us in the family would have gone,” he said.
The flash floods destroyed his shops and merchandise valued at 45 million Nepali rupees (S$375,000), none of it insured. “God has put me in such a position that now I need debt,” he said.
The catastrophe struck just ahead of Nepal’s crucial September-to-November Hindu festival season, when celebrations including Dashain and Tihar typically drive a surge in spending.
Like Chaurasiya, many traders had stocked up in anticipation, only to have inventory destroyed or stranded while bank loans and supplier bills remain due.
Jayant Kumar Agrawal, secretary-general of the Nepal Foreign Trade Association, estimates at least 1,000 importers were affected by the floods.
Replacing goods will be more expensive because of disrupted trade routes, while some insured businesses may struggle to prove their losses after customs agents’ offices and records were swept away.
Beyond the areas directly hit, businesses also face the prospect of weaker festival spending as the country reels from a disaster that has killed more than 1,200 people.
Any pullback in spending could weigh heavily on Nepal’s roughly US$45 billion economy. Private consumption accounted for about 82 per cent of Nepal’s gross domestic product in the fiscal year ended mid-July 2026, according to the National Statistics Office.
Nepal is one of Asia’s poorest economies with output per person about $1,500, little more than half the South Asian average.
The disaster comes at a particularly difficult time for the Himalayan nation, which was already grappling with higher fuel costs and weaker tourism before the floods. Reconstruction could cost Nepal at least $5 billion.
Destroyed Routes
The government has announced relief measures for flood survivors, including free medical care in government hospitals and shelter for displaced people.
It has also directed the finance ministry to prepare a relief, concessional-financing and rehabilitation package for affected individuals and businesses, though details have yet to be announced.
Nepal’s Ministry of Industry, Commerce and Supplies and Finance Ministry did not respond to requests for comment.
The damage to trade routes poses a broader problem for an economy heavily reliant on inbound shipments.
Imports of goods and services were equivalent to about 35 per cent of Nepal’s GDP in the fiscal year ended mid-July 2026, according to the National Statistics Office.
With major border crossings destroyed or closed, shipments are being forced onto longer and more costly routes.
Rasuwagadhi, the main overland route for trade with China, was washed out by the floods. Tatopani, the other principal gateway, has been shut for trade since Aug 29 after China cited landslide risks.
SPG Automobiles, the Nepal distributor for Chinese brands Omoda, Jaecoo and ICAUR, lost about 100 electric vehicles, worth 450 million Nepali rupees ($2.96 million), to the floods.
Most of those vehicles were already booked, while another 700 to 800 were waiting on the Chinese side of the border to enter Nepal.
Director Gaurav Sharda said rerouting could roughly double transport costs and delivery times.
The disruption comes just as the industry enters a roughly 45-day period that he estimates accounts for about 40 per cent of annual auto sales.
“The sentiment is very bad in Nepal right now,” said Sharda. “Whoever you meet has another story to tell of a loved one or a known person lost to the floods.” BLOOMBERG
