Tourism is becoming an increasingly important source of foreign exchange. The Kathmandu valley, however, is the only area equipped with the necessary amenities for foreign tourists. Electricity is largely generated by hydroelectric-power stations. Per capita consumption of electricity lags behind that of most other Asian countries, and supplies of electricity are severely limited even in the cities. The difference between recurrent revenues and expenditures is made up by external aid.
Foreign aid finances large portions of the government's five-year development plans.
India dominates Nepal's foreign trade and has granted only limited transit rights. Capital and consumer goods, mineral fuels, and chemicals dominate imports. Nepal is a democratic constitutional monarchy. Except for those acts that fall exclusively within the King's right, the king must act only with the advice and consent of the Council of Ministers. The constitution can only be amended by a two-thirds majority in the lower house.