Indian currency can be used in Nepal

A question that’s guaranteed to be on the mind of anyone travelling to Nepal from India. You’ve probably heard that Indian Rupees are accepted in Nepal, but let me tell you that it isn’t that straightforward. While I was there, I realised that the reality is a bit more nuanced. I’ve explained my experiences in more detail in this blogpost.

The Basics

The official currency of Nepal is the Nepali Rupee. The standard conversion rate applied is 1 Indian Rupee = 1.6 Nepali Rupee. However, given that India and Nepal share a very liberal equation (in terms of border control and regulation) you will find that Indian currency can often be used in Nepal. But, there are a few things you should know.

Some Limitations

  1. Smaller denomination Indian currency notes (10, 20, 50 and 100) are more widely accepted. However, coins and higher denomination notes (500 or 2000) are less likely to be of any use while you’re in Nepal. In my experience, a few hotels were willing to accept payment in 500 rupee notes, but there were no takers for 2000 rupee notes or coins.
  2. In towns close to the Indo-Nepal border and bigger cities (like Pokhara and Kathmandu) it was easier to find people who would accept Indian currency for payment. In more remote areas, they preferred payment in Nepali rupees since it is more difficult for them to be able to use Indian currency subsequently.
  3. Most of the official money changers in Kathmandu and Pokhara did NOT accept Indian currency for exchange to Nepali currency. While they readily convert US Dollars, Japanese Yen and several other currencies of the world, they generally do not accept or deal with Indian Rupees. Therefore, if you’re forced to convert money, its more difficult to do so with INR. I was told that certain banks would accept and convert INR, however, I never had a chance to test that. I did convert some currency “unofficially” through locals in Pokhara who were willing to accept INR and give me Nepali Rupees in return.
  4. Related to the subject of money conversion, I found that it was very easy to convert Indian Rupees to Nepali Rupees at places near the Indo-Nepal border. However, this was again an “unofficial” process done without any receipt. While this does increase the risk of getting counterfeit currency, I did not face any problems. The conversion was done at the standard rate of 1 INR = 1.6 NPR and no service charge or commission was taken from me. 

The Debit/Credit Card Conundrum

Coming to the subject of Indian Debit Cards and Indian Credit Cards. As I was to discover, there are some challenges around using these in Nepal. Firstly, almost all Indian Debit and Credit Cards have fine print on the back that reads “Not Valid for Foreign Exchange Transaction in Nepal or Bhutan” or something along those lines. This is something that many of us easily miss, but very crucial to know in this context.

I was unable to use my Indian Debit Card or Credit Card for any swipe transactions in Nepal – i.e. I was not able to pay for food, fuel or anything else by card. Using these cards at ATMs also proved to be a challenge. I was told that Indian Cards only work at certain ATMs of banks that have a tie-up with Indian banks, for e.g. NAABIL Bank, Nepal SBI and Everest Bank. In Kathmandu, I was able to withdraw Nepali Rupees from an ATM quite easily. However, in Pokhara this proved to be a challenge. After trying more than ten ATMs (and being declined) I was only able to withdraw money from a “Naabil Bank ATM”. Overall ATMs of “Naabil Bank” were the ones with the highest likelihood of success, while others like “Nepal SBI” would sometimes disburse money and sometimes decline.

Also relevant to mention here is that while there are several ATMs in Kathmandu and Pokhara, you are unlikely to find any ATMs (especially those that accept Indian cards) in any other part of Nepal. Therefore, it’s important to plan and withdraw necessary cash before you head off to any other part of Nepal from these cities.

Note: If you’re using an Indian ATM Card in Nepal you will most probably be charged a transaction fee of 500 Nepali Rupees or more per transaction. Therefore, it’s best to plan your withdrawals and do as few as possible.

Summing it Up

To summarise, Indian currency can be used in Nepal in some situations. However, to make your life easier, I would recommend converting some (or all) of the money you need into Nepali Rupee. In the interest of safety, it might be smartest to convert some money at the border/airport and then subsequently make necessary withdrawals while in bigger cities so as to not be travelling with too much cash in hand.

I hope you found this post useful. Do also read my other blogposts about tips and information for planning a trip to Nepal. If you haven’t already seen them, you should also head to my Youtube Channel and see the travel vlogs that I made during my trip to Nepal.