Nepal to Allow Indian Currency Notes Above INR Hundred, Easing Cross-Border Travel for Tourists

Published on December 13, 2025

Nepal plans to allow circulation of Indian currency notes above ₹100 for the first time in nearly a decade, aiming to boost cross-border trade and tourism. Nepal’s central bank, the Nepal Rastra Bank (NRB), has announced a policy shift that is expected to significantly ease the financial challenges faced by Nepali migrant workers, Indian tourists, students, pilgrims, and medical visitors travelling between Nepal and India. The policy change is also likely to have an impact on the tourism and hospitality industries, which have been advocating for such an amendment for several years.

This change follows a revision to India’s Foreign Exchange Management (Export and Import of Currency) Regulations by the Reserve Bank of India (RBI) in late November 2025. The adjustment allows individuals to transport Indian currency notes up to ₹100 and above, with a limit of ₹25,000 in either direction. Both countries have welcomed the move, which addresses long-standing issues for travellers and tourism businesses.

Understanding Nepal’s Currency Restrictions

For nearly a decade, Nepal has maintained a strict policy on high-denomination Indian currency. Following India’s 2016 demonetisation, which withdrew ₹500 and ₹1,000 notes from circulation, Nepal banned the circulation of Indian currency notes above ₹100. This policy was intended to curb the smuggling of counterfeit currency and to control the inflow of high-value notes, which were believed to pose a security threat to the Himalayan nation.

Prior to 2015, Nepali citizens were allowed to carry up to ₹500 and ₹1,000 denomination notes into Nepal, up to a total of ₹25,000. However, following demonetisation, Nepal imposed tighter restrictions, allowing only ₹100 notes for cross-border travel. Indian tourists and other travelers, particularly those heading to Nepal for business or leisure, were often forced to deal with currency issues, leading to confusion and, at times, even legal complications.

This restriction has affected a range of sectors within Nepal’s economy, including tourism, casinos, and hospitality services catering to Indian visitors. Many travelers were unknowingly caught violating currency regulations, leading to arrests and fines. As a result, businesses dependent on Indian tourists have been at the forefront of lobbying for changes in the currency policy.

The Impact of India’s RBI Amendment

The recent amendment by the Reserve Bank of India (RBI) is expected to greatly benefit the tourism industry in Nepal. Under the new rules, Indian citizens can carry ₹100 denomination notes without any restrictions and can also transport higher denomination notes—up to ₹25,000—into Nepal, as long as they do so in both directions. This change offers a significant boost to Indian tourists, as it will reduce the need to exchange money or rely on local currencies during their stay in Nepal.

The new currency rules align with broader goals of fostering tourism and business exchange between the two nations and are seen as an important step in facilitating smoother cross-border travel. Additionally, the adjustment will likely benefit Nepali workers who send remittances from India. These workers, particularly those involved in seasonal or migrant labour, often face challenges when transferring money back home due to the existing currency restrictions.

Nepal’s Central Bank Prepares for Implementation

The Nepal Rastra Bank has been working closely with financial institutions and government agencies to ensure that the new currency regulations are implemented smoothly. The central bank has indicated that it is in the final stages of preparing the formal announcement, with plans to publish a notice in the Nepal Gazette soon. Once the regulations are finalized, the NRB will issue circulars to banks and financial institutions, officially enabling the circulation of Indian currency notes above ₹100 across the country.

This long-awaited change is expected to positively affect various sectors within Nepal. Notably, the tourism and hospitality industries, which have long struggled with foreign currency exchange issues, stand to benefit the most. While urban areas, especially Kathmandu, have seen improvements in payment systems through mobile applications and QR codes, the system remains unreliable in remote areas of Nepal. In these regions, high-denomination Indian notes will provide a much-needed alternative for travelers.

Challenges in Nepal’s Tourism Industry and Currency Systems

Despite the progress made with mobile payment systems, challenges remain, particularly in rural areas. Many parts of Nepal, especially in remote mountain regions, lack reliable internet connectivity, and travelers continue to face difficulties with mobile payment methods. The introduction of Indian currency notes above ₹100 is expected to fill this gap, allowing for easier transactions in areas that still rely on physical cash.

Moreover, this change will likely encourage more Indian tourists to visit Nepal, especially as it aligns with their financial habits. As of recent years, India remains the largest source of tourists to Nepal. With growing interest from Indian travelers, Nepal’s economy stands to gain from an increase in tourism-related activities, particularly in the casino, hospitality, and pilgrimage sectors.

Nepal’s Broader Economic Strategy and Future Outlook

Nepal’s economic strategy has been focused on enhancing trade, tourism, and cross-border cooperation with India. The easing of currency restrictions marks a significant milestone in the bilateral relationship between the two nations. Nepal’s government aims to attract more Indian tourists, especially in niche markets such as pilgrimage tourism, adventure tourism, and medical tourism. The increased flow of Indian currency is expected to boost local economies in areas dependent on tourism, creating new business opportunities and helping to revive sectors that have struggled in recent years.

Furthermore, as Nepal looks to position itself as a key destination for international tourists, these changes in currency policy could play a critical role in its economic recovery. The tourism sector, in particular, could see an uptick in arrivals, bolstered by the ease of currency exchange and more seamless financial transactions for visitors.

A Step Toward Stronger Nepal-India Relations

Nepal’s decision to allow the circulation of Indian currency notes above ₹100 is a significant step towards cross-border cooperation between the two countries. The change, which is expected to be announced soon, will make it easier for Indian tourists, Nepali migrant workers, and others travelling between the two countries to deal with currency issues. Tourism continues to play an important role in Nepal’s economy, and this policy shift is expected to improve the travel experience and open up new opportunities for businesses in both countries.

This development is part of a larger trend of strengthening bilateral ties, with both countries focusing on improving economic cooperation and facilitating smoother travel across their shared border. With the implementation of these currency changes, Nepal will be able to strengthen its position as a top destination for Indian tourists while also promoting long-term growth and improving financial systems.