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.
Country sees outflow of around Rs 13.5 billion in eight months
Remittances now provide Nepal with a comfortable cushion. They increased by 37.1 percent to Rs 2.363 trillion in the previous fiscal year, greatly outpacing spending on education and tourism. That is heartening, but Nepal should not expect the situation to always remain this favorable. A disturbing trend is developing. A large number of Nepalis move overseas to work and send their money home. Families then use part of that money to send their children abroad for education. Many of those young people eventually choose to pursue their careers and spend their lives overseas. Nepal continues to receive remittances, but it is also losing workers, students, skills and money. Foreign currency reserves cannot be seen as an unlimited stream of money. Nepal needs foreign currency to purchase gasoline, medicines, machinery, technology, industrial raw materials and other necessities. If overseas spending continues to climb while remittance growth slows or imports rise, the strain on foreign currency reserves may swiftly worsen. Foreign vacations are a little different. Nepalis with the financial means have every right to travel. Increased international travel reflects rising wealth and changing lifestyles. The larger concern is why Nepal cannot retain more of its tourism revenue at home. Improved roads, dependable air services, cleaner destinations, better hotels, recreational facilities and fairly priced domestic packages should entice more Nepalis to travel within the country.
Trying to prevent individuals from studying or travelling overseas will not address the issue. Tighter foreign currency regulations may limit spending for a time, but they will do little to address the underlying reasons people seek opportunities elsewhere in the first place. That is where Nepal should concentrate its efforts. Universities must provide courses that students value, maintain consistent academic calendars and link education more directly to employment. Better research facilities and collaborations with reputable overseas institutions might also enable more students to receive a quality education without leaving the country. Nepal must also provide families with more compelling reasons to spend their remittances at home. When consumers perceive lucrative opportunities, stable rules and a business climate they can trust, they will spend their savings on businesses and productive investments rather than only on consumption. The larger question is why so many Nepalis seek better education, opportunities and experiences overseas. Though Nepal cannot stop money from crossing its borders, it can create conditions in which more people find good reasons to spend, invest and plan for their future at home.
