Foreign employment approvals rise again, Signaling deepening reliance on overseas jobs in Nepal

KATHMANDU: The number of Nepali workers receiving first-time approval for foreign employment has shown a sustained upward trend over the past four fiscal years, underscoring Nepal’s growing dependence on labor migration as a core pillar of economic survival, household income, and macroeconomic stability.

According to official data, 3.55 lakh Nepalis received first-time labor approval in fiscal year 2021/22. The figure surged sharply to 4.98 lakh in 2022/23, reflecting a strong post-pandemic rebound in global labor demand, particularly in Gulf countries, Malaysia, and other major destination markets.

Although approvals moderated slightly to 4.60 lakh in 2023/24, the latest data for fiscal year 2024/25 shows a renewed rise to 5.06 lakh, the highest level in the period under review.

This trend highlights a structural reality of Nepal’s economy: limited domestic job creation continues to push a large share of the working-age population toward foreign employment.

Despite policy commitments to promote industrialization, private sector growth, and entrepreneurship, overseas labor migration remains the most accessible and reliable employment option for hundreds of thousands of Nepalis every year.

From a macroeconomic perspective, rising foreign employment has played a decisive role in stabilizing Nepal’s economy.

Remittance inflows—generated largely by migrant workers—have consistently supported foreign exchange reserves, helped finance imports, and reduced pressure on the balance of payments.

Nepal remains one of the world’s most remittance-dependent economies, with remittances accounting for a significant share of GDP, consumption spending, and household savings.

Economists note that the increase in first-time migrant workers directly translates into medium-term remittance growth, strengthening liquidity in the banking system and supporting credit expansion.

In recent years, remittance-driven deposits have helped banks manage liquidity stress and maintain financial stability during periods of weak domestic investment and sluggish industrial activity.

However, the growing scale of outbound labor migration also reflects deeper structural weaknesses in Nepal’s labor market.

The continued rise in first-time approvals suggests that foreign employment is not merely cyclical but increasingly a long-term necessity for many households.

Youth unemployment, underemployment, low wage growth, and limited opportunities in agriculture and manufacturing have constrained domestic absorption of labor.

The economic impact is therefore mixed. On the positive side, foreign employment has reduced extreme poverty, improved household living standards, boosted consumption, and expanded access to education and healthcare. Migrant income has also fueled real estate investment, small businesses, and urbanization across Nepal.

On the downside, heavy reliance on overseas jobs has created vulnerabilities. Labor shortages are emerging in agriculture, construction, and small enterprises, raising costs and reducing productivity.

Skilled and semi-skilled workers leaving the country have weakened the domestic human capital base, while remittance-driven consumption has not translated into proportional growth in productive sectors.

Globally, Nepal’s labor migration pattern mirrors trends seen in other remittance-led economies in South Asia and Southeast Asia. Yet experts argue that Nepal faces a narrowing window to convert labor migration into long-term economic transformation.

Without effective reintegration policies, skills recognition, and productive investment channels, the cycle of first-time migration is likely to intensify.

Policy analysts stress the need for a dual strategy: protecting migrant workers abroad through bilateral labor agreements and transparent recruitment systems, while simultaneously creating sustainable employment at home through industrial policy, infrastructure investment, digital economy expansion, and skills-based job creation.

As first-time foreign employment approvals cross five lakh again in 2024/25, the data sends a clear signal.

Overseas work continues to function as Nepal’s economic safety valve—but without structural reform, it may also entrench long-term dependency, delaying the transition toward a resilient, self-sustaining national economy.