Why Nepal’s Inflation Surged in Late 2024 While India’s Stayed Moderate

The CPI data for late 2024 (November–December 2024/25) shows a striking contrast between Nepal and India. Nepal experienced one of its sharpest inflation spikes in years, while India’s inflation remained comparatively moderate.

In November 2024, Nepal’s CPI jumped 5.60%, followed by an even higher 6.05% in December—the peak of that fiscal year. This surge was fueled mainly by seasonal food shortages during winter, when fresh supplies of vegetables and cereals tighten, and reliance on imports increases. The pressure was compounded by festival demand (Tihar and Chhath), higher transport costs, and non-food price hikes in housing, utilities, and health services. For Nepalese households, these months were particularly difficult, with grocery and service costs peaking simultaneously.

India, by contrast, recorded 5.48% in November and 5.22% in December, keeping inflation close to the 5% mark. While India also experienced seasonal food pressures, its larger and more diversified agricultural base, better storage infrastructure, and stronger policy interventions helped keep prices relatively stable compared to Nepal. India’s inflation stayed more balanced between food and non-food categories, whereas Nepal’s was highly food-driven during this period.

The difference highlights how structural weaknesses in Nepal’s supply chain and reliance on imports make its inflation more volatile, especially in food-heavy months, while India’s scale and policy tools allow for better moderation. This explains why Nepal saw a sharp inflation spike in late 2024, while India managed to contain price growth more effectively.