Kathmandu. According to the US State Department’s Human Trafficking (TIP) Report of 2025, Nepal has been placed in the Tier 2 watch list for the second consecutive year.
The situation highlighted that while the Government of Nepal is making “significant efforts” to combat human trafficking, it has failed to make adequate efforts overall compared to the previous reporting period. This stability is an important diplomatic and humanitarian warning, which could put Nepal at increased risk of international punishment.
The report classifies countries into three categories: Level 1, Level 2 and Level 3 on the basis of human trafficking risk. It refers to the failure of government mechanisms to control human trafficking in Level 1 countries and the failure of government mechanisms to control human trafficking in Level 3 countries.
‘Blocked’ progression:
The Tier 2 Watch List is for countries where the scale of human trafficking is large, or where government efforts to address it are also losing momentum. For the millions of Nepali migrant workers at risk, the report highlights the administrative and legal failures that have left the country’s security apparatus incomplete.
The report points to the lack of effective measures in the Level 2 countries to control human trafficking and continue to be impunished.
Decade of delay: Critically, the Government of Nepal has failed to adopt important draft amendments criminalizing all forms of labor and sex trafficking for the 10th consecutive year, leaving legal loopholes for exploitation by criminals.
Neglected victims: For the sixth year in a row, the government has not finalized standard operating procedures for victim identification and referral. This bureaucratic failure means that the police and local authorities on the front lines lack clear standards and guidelines to identify those escaping trafficking and ensure they are given life-saving care and shelter.
Impunity and corruption: The report specifically cites “serious concerns about official involvement in trafficking crimes”. This means that corruption is undermining law enforcement efforts and allowing traffickers to continue doing business with impunity.
Growing threat of Tier 3 restrictions:
The most immediate consequence of being on the watch list is the risk of being promoted to Tier 3 in the next annual report. This is not just a diplomatic embarrassment – it can lead to concrete economic sanctions, which can seriously hinder Nepal’s development.
Tier 3 issues that could compel the President of the United States:
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Restrictions on Foreign Aid: To withhold or restrict non-humanitarian and non-trade-related U.S. foreign aid.
Withholding of Multilateral Funds: Direct U.S. representatives to multilateral development banks, such as the International Monetary Fund, to vote against loans or other financial assistance to Nepal.
For a developing country like Nepal, losing access to critical development funds will have an impact on infrastructure projects, poverty alleviation programs, and public services. This will create long-term effects and ultimately harm those who are at risk of trafficking.
The Personal Trafficking Report poses an urgent challenge: Nepal must demonstrate decisive, measurable growth in effort and progress in the coming year to protect its citizens and avoid the economic fallout of falling into Tier 3.
