Nepal is on the verge of lifting its ban on Indian currency notes exceeding ₹100, a move set to significantly ease economic interactions and boost tourism between the two nations. This decision comes after a period of restriction and responds to persistent currency exchange challenges faced by Nepali workers and Indian travelers alike. Official announcements are expected soon, signaling a new chapter in Nepal-India relations.
The Reserve Bank of India (RBI) has already amended its Foreign Exchange Management regulations, permitting individuals to carry Indian currency notes of all denominations up to ₹100 without any limit. Moreover, notes above ₹100, including ₹2000 and ₹500, can be carried up to a total value of ₹25,000. This reverses a previous restriction imposed after India's demonetization of ₹500 and ₹1,000 notes in 2016, which led Nepal to restrict the use of high-denomination Indian currency notes.
The upcoming change is expected to benefit millions of Nepali and Indian commuters, tourists, patients, and small traders who frequently cross the border. It will eliminate the need to carry large quantities of smaller denomination notes, simplifying transactions and making payments easier for tourists. Furthermore, it is anticipated to reduce informal transactions, money exchange hassles, and illegal currency trading, thereby encouraging more transactions within the formal banking system.
Guru Prasad Poudel, spokesperson for Nepal Rastra Bank, indicated that the process is in its final stages, with the official date to be confirmed soon. The Nepal Rastra Bank will issue its own directive before the new arrangement takes effect.
This decision is particularly beneficial for Nepalis who regularly travel to India for work, medical treatment, or business, as well as for Indian tourists visiting Nepal. It addresses long-standing currency-related issues faced by Nepali migrant workers, students, pilgrims, and medical visitors.
Beyond easing travel and trade, this move signifies strengthening economic ties between India and Nepal. Both countries are increasingly cooperating in trade, tourism, infrastructural connectivity, and energy. In November 2025, the two nations amended the Treaty of Transit to enhance cross-border connectivity and trade, facilitating rail-based freight movement between Jogbani in India and Biratnagar in Nepal. This liberalization extends to key transit corridors, strengthening multimodal trade connectivity and Nepal's trade with third countries.
India and Nepal are also forging closer ties in the energy sector, with the Indian Oil Corporation Ltd. (IOCL) exporting Liquefied Natural Gas (LNG) to Nepal. This is enabled by the development of cryogenic storage and regasification facilities at Simara, Nepal, promoting clean energy and sustainable power development.
The lifting of the ban on Indian currency notes above ₹100 represents a significant step towards deeper economic integration and improved people-to-people connections between Nepal and India. It reflects a commitment to addressing practical challenges and fostering a more seamless and prosperous relationship.
