Iran War Impact on Nepal: Gulf Jobs and Remittances Face Uncertainty

The Iran war impact on Nepal is increasingly visible in the uncertainty facing Gulf-bound workers, overseas recruitment and the future of remittance income. Nepal is not directly involved in the conflict, but its reliance on employment in the Middle East means regional instability can affect households thousands of kilometres away.

The conflict began on February 28, 2026, after US and Israeli strikes on Iran. It has disrupted business confidence, shipping and economic activity in parts of the Gulf. For Nepal, one immediate concern is whether employers will continue hiring migrant workers at the same rate.

Gulf Recruitment Has Fallen

A November 3 analysis in The Kathmandu Post reported that new approvals for Nepali workers travelling to Gulf countries fell by 52.12% between the start of the war and mid-September, compared with the same period a year earlier. The number dropped from 228,165 to 109,249.

The report also described workers who had been sent home on unpaid leave as hotels and other businesses reduced staff. But the decline should not be attributed entirely to the war. Gulf countries were already expanding policies that favour local workers, while sector-specific labour demand and other economic conditions were also changing.

What Could Happen to Remittances?

Nepal received a record Rs2.363 trillion in remittances in fiscal year 2025/26, up 37.1%, according to the same analysis. That strong annual figure reflects money sent by workers already employed abroad; it does not guarantee that future inflows will keep rising.

If recruitment remains weak, workers lose jobs or wages are delayed, households could face pressure over education costs, healthcare, loan payments and daily expenses. The impact would not be uniform: it would depend on the destination country, industry, employer and the length of the disruption.

Why the Strait of Hormuz Matters

The conflict has also disrupted shipping near the Strait of Hormuz, an important route for global energy supplies. Prolonged disruption can push up oil prices, freight charges and insurance costs. Nepal imports petroleum products, so higher international prices could add pressure to transport costs, inflation and household budgets.

What Nepal Needs to Watch

The key indicators are Gulf recruitment approvals, workers’ reports of unpaid leave or job losses, remittance trends, fuel prices and the duration of shipping disruption. Nepal also needs reliable support for workers facing sudden unemployment and better access to information about safe employment.

The conflict’s economic consequences for Nepal will depend on how long instability lasts. The immediate risk is not that remittances suddenly disappear, but that fewer job opportunities and uncertain working conditions weaken the income pipeline over time.