Top 7 Fastest Growing Cities of Nepal

The urban population of  Nepal increased from 9% in 1991 to 22% of the total population in 2023. Nepal Census 2021 shows that the population of urban areas was 66.17% that had been increased from 61.5% in 2011 of the total population of Nepal. Urban centres increased from 58 in 2013 to 293 in 2017 (Click for Source). The transition to urban areas from dominant rural areas of Nepal is primarily because of the decision of the government to merge rural areas to form municipalities. Municipalities are the administratively urban areas of Nepal. 

Migration from rural areas to cities is another important factor driving urban growth in Nepal. Cities with varied education and employment opportunities generally in the manufacturing, construction and services sectors are more attracted to people from rural areas. Top 7  fastest growing cities of Nepal are as follows: 

1. Kathmandu Valley:

Kathmandu Valley is the largest urban agglomeration and most developed city in Nepal. Kathmandu Valley includes cities like Kathmandu Metro, Tokha, Buddhanilkantha, Tarakeshwar, Nagarjun, Chandragiri, Mahalaxmi, Suryabinayak, Kageshwori-Manahara and many more. Kathmandu Valley is one of the fastest-growing cities in South Asia with an estimated population of around 5 million. 

Being the capital of Nepal and most of the central offices lie in Kathmandu, it is the top economic hub of Nepal. People from every other district migrate here to grab the economic opportunities and educational facilities.  Healthcare in Kathmandu is the best among cities in Nepal. It is the home to some of the best hospitals and clinics in Nepal. Though the annual population growth rate, according to Nepal Census 2021, of the main core Cities of Kathmandu Valley: Kathmandu Metro, Lalitpur Sub-metro and Bhaktapur municipality are almost zero or negative but the peripheral cities of Kathmandu have the highest annual population growth rate among the cities all over in Nepal.

According to Nepal Census 2021, Kageshwori-Manahara has the highest annual population growth rate following by other peripheral municipalities of Kathmandu Valley among the cities of Nepal. The reason for the fast growth of these regions are expansion of settlement areas towards periphery due to the shortage of spaces in the core areas of the Valley and affordable land prices in these areas than in the centre region. 

Nepal Census 2021 shows that out of the total population, outside the city-born population percentage of Kaeshwari-Manahara is 70.89%, Buddhanilkantha is 70.82%, Tarakeshwar is 69.17%, Nagarjuna is 66.91%, Mahalaxmi is 66.08%, Suryabinayak is 65.1% and Chandragiri is 62.41% which depicts the huge migration from outside to these areas. These municipalities have been coalesced into a large metropolitan area where agricultural lands and open spaces were aggressively converted to residential areas to accommodate growing demands for housing and other urban infrastructures.

Kathmandu valley has the maximum built-up areas. The built-up area of Kathmandu was 8.05% (56.21 square km) in 1990 and 37.7% (263.09 square km) in 2020(Click here for Source Link). Kathmandu valley witnessed a maximum increase in built-up areas among the cities in Nepal with 206.88 square km (368.06%) increase during the period of the last thirty years which shows the fastest growing of human settlement in the Valley. High demand of real estate properties in Kathmandu upsurges the prices continuously. (See prices of Real Estate in Kathmandu) So, the above data shows Kathmandu valley is the fastest growing city of Nepal.

2. Butwal-Tilottama:

Butwal is the sub-metropolitan city and Tilottama is the municipality in Rupandehi district of Lumbini Province in Nepal. Butwal-Tilottama urban agglomeration is another fastest growing city in Nepal. This urban agglomeration is primarily based on Siddhartha Highway. Siddhartha highway links the Indian border at Sunauli and to the hilly towns in the Tansen and Pokhara valley. Butwal is the junction of two national highways, Mahendra highway and Siddhartha highway. It connects Western Nepal to Capital City and terai areas to hilly areas such as Palpa, Syanjga, Pokhara. Butwal holds the title of being “The Best City in Nepal” five times in a row. 

Butwal-Tilottama urban agglomeration is a relatively newly urbanised area, emerging and growing rapidly. Mass migration from nearby hilly areas such as Palpa, Gulmi, Syangja, Argakhachi is the reason for rapid population growth. According to Nepal Census 2021, the annual population growth rate of Tilottama is 3.9% while annual population growth rate of Butwal is 3.1%. Nepal Census 2021 also shows that out of total population, outside the city born population percentage of Butwal is 60.72% and Tilottama is 53.27% which depicts the large shift of population from outside to these areas 

Butwal is mostly a commercial and trading city. Recently, huge investment is flowing in the hospitality sectors in Butwal. Employment oppurtunities are increasing. Health-care facilities are also good in this city. Patients from far-western regions and hilly regions to the north including Palpa, Gulmi, Arghakhanchi come to seek specialised care at different hospitals in the city. Being well facilitated and developed in infrastructure, this city is an attraction centre for people of nearby districts to migrate. So, Butwal-Tilottama is in the list of top 7 fastest growing cities of Nepal.

3. Itahari-Sundarharaicha:

Itahari is a sub-metropolitan city in the Sunsari District of Koshi Province, Itahari is the second most populated city in eastern Nepal after Biratnagar. Itahari is the junction point between East-West Mahendra highway and North-South Koshi highway. Koshi highway is the shortest North-South highway connecting India at Jogbani and China at Chentang. Itahari links big cities like Biratnagar in the south with Dharan and Dhankuta in the North. Sundar Haraicha is a municipality in Morang district which lies in the west of Itahari Sub-metropolitan city.

Itahari-Sundar Haraicha urban agglomeration also lies among the fastest growing cities of Nepal. According to Nepal Census 2021, the annual population growth rate of Sundar Haraicha is 3.9% and Itahari is 3.1%. Nepal Census 2021 data shows that 54.73% of total population of Itahari are born outside of Itahari while 54.29% of total population of Sundar Haraicha are born outside of the city. That means a huge population has migrated to these cities. 

Over the last 20 years, cropland area has decreased in Itahari depicting change in land uses. The Cropland area was 77.46 square kilometres, whereas the Built-up area was only 1.44 square kilometres in 2005. The built-up area then increased from 2005 to 2013, reaching 2.32 square kilometres, and then drastically increasing to 5.71 square kilometres in 2019 following the declaration of Itahari as a sub-metropolitan city in 2014. (Source: Assessment of Land Use Pattern using Remote Sensing and GIS: A Case Study of Itahari Sub-Metropolitan )

4. Birendranagar:

Birendranagar is a municipality in Surkhet district in Karnali province.It is the capital of Karnali province and headquarter of Surkhet district.It is on two national highways Ratna Highway and Karnali highway. Ratna highway connects with other cities Kohalpur and Nepalgunj and leads to the India Border. Birendranagar is the first planned town in Nepal. It is a major trade centre in Mid-Western Nepal.Birendranagar is the main educational and health centre in West Hilly Region of Nepal; various colleges and schools are there and a regional hospital and a district hospital are the major ones. 

Nepal Census 2021 shows the annual population growth rate of Birendranagar as 3.7% which is high and data also shows that 48.76% of total population of Birendranagar are outside born of the city which means about half of the population had shifted to Birendranagar from outside.

Object-based image analysis carried out for research published in Researchgate (Click for link) for years 1989, 1999, 2009, and 2019 found that the area of 103.15 square km of Surkhet Valley, showed decreasing area of cultivated lands and increasing spatial coverage of built-up areas. The cultivated lands that measured 42 square km for the year 1989 had decreased to  28.23 square km in 2019. And, the area covered by built-up class was only 1.16 square km in 1989 which rose to 15.41 square km in 2019.

5. Dhangadhi:

Dhangadhi is a sub-metropolitan city and headquarter of Kailali districts in Sudur-paschim province. Dhangadhi is the primary commercial and industrial hub of Sudurpaschim and one of the fastest developing cities of Nepal.  The city attracts migrants from the surrounding area, who move to the city for educational and health services.Dhangadhi is also among the fastest growing cities of Nepal. 

Nepal Census 2021 shows the annual population growth rate of Dhangadhi as 2.8% which is also high and data also shows that 45% of total population of Dhangadhi are outside born of the city, which is a huge shift of population to Dhangadhi. According to study in time interval 2013-2023, Urban expansion rate of Dhangadhi is 2.25 square km per year. So Dhangadhi is also one of the fastest growing city of Nepal.

6. Bharatpur:

Bharatpur is a metropolitan city in Chitwan district. It is the commercial centre that lies in the central region of Nepal.  It was declared a metropolitan city in 2017 after the merger of Narayani Municipality, Chitrawan Municipality, and Kabilas Village. Narayangarh of Bharatpur is the junction point of East-West Mahendra Highway and Narayangarh-Mugling highway that connects east and west part of Nepal to Capital city, Kathmandu and another major city Pokhara.

Traditionally, the economy of Bharatpur was based on agriculture. Gradually, Bharatpur possesses small-scale industry that primarily processes the food surpluses of the Chitwan. Compared to other parts of the country, Bharatpur has  well-facilitated and developed healthcare systems with several famous hospitals like B.P Koirala Cancer Hospital, Chitwan medical college, Bharatpur Hospital etc. So , these are attraction points for people to migrate to Bharatpur.

Bharatpur is also in the list of fastest growing cities of Nepal. Nepal Census 2021 shows the annual population growth rate of Bharatpur is 2.5%  and data also shows that 53.65% of total population of Bharatpur are outside born of the city, which depicts large population migrated to Bharatpur. According to the study, the built-up area of Bharatpur Metro was 4.44 square km in 1990 which increased to 20.74 square km in 2018. This study also shows Bharatpur as the fastest growing city of Nepal.

7. Pokhara:

Pokhara is a metropolitan city and Capital of Gandaki province. It has been declared as the tourism capital of Nepal. Pokhara is a growing city with people migrating here from all over the country searching for better opportunities. While the natural beauty of the mountains as well as numerous lakes are the major attractions of the city, its people are equally diverse, and it is the economic hub of the central region of Nepal. Services and manufacturing sectors contribute around 58% of the economy of Pokhara. Services sector mostly includes the hospitality sector. So, people from other nearby hilly areas like Parbat, Baglung, Syangja, Tanahaun etc migrate to Pokhara to grab economic activities.

According to Nepal Census 2021, annual population growth rate of Pokhara is 2.1% and 51.26% of total population of Pokhara are born outside which shows a large population migrated to Pokhara. Study shows that over the time frame of 20 years (2000-2020),  built-up area was increased by 15.65%. (Source: researchgate.com, Click here for sourcelink)

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Other fastest growing cities but smaller in size than above are Damak, Birtamod, Kohalpur and Kawasoti with annual population growth rate of 3.4%, 3.3%, 3.3% and 3.2% respectively according to Nepal Census 2021.