Home ／ Insights on entering the Indian market
2026.04.07
Nepal's caste system shares common roots with the Hindu-based status system of neighboring India, but has its own distinctive structure that incorporates Tibeto-Burman mountain peoples. Caste can often be identified from surnames, and this is a topic that requires understanding in business and interactions with Nepalis living in Japan as well.
This article explains in detail everything from an overview of Nepal's caste system to a list of surnames, how to identify caste, its historical evolution, the reality of modern-day discrimination, and its relevance to Japanese people. India's Caste System— comparing it with Nepal's system as well, this content offers a multidimensional understanding of South Asian social structure.
Nepal's caste system is a unique social structure that, while based on the Hindu Varna system, incorporates Tibeto-Burman indigenous peoples. Despite being a small country with a po
Nepal's caste system is based on the Hindu concept of social status introduced from India, but there are several important differences.
| Point of comparison | India | Nepal |
|---|---|---|
| Population | About 1.4 billion | About 30 million |
| Basis of the Caste System | Varna + Jati | Varna + Ethnicity (Jat) |
| Top Caste | Brahmin | Bahun (the Nepali form of Brahmin) |
| Warrior Class | Kshatriya | Chhetri (the Nepali form of Kshatriya) |
| Proportion of Dalits | About 16.6% | About 13% |
| Ethnic Diversity | Subdivided by jati | Tibetan-descended ethnic groups positioned in the middle tier |
| Abolition of Untouchability | 1950 (Article 17 of the Constitution) | 1963 (the New Muluki Ain) |
| Reservation System | SC15%/ST7.5%/OBC27% | Includes quotas for Dalits, indigenous peoples, women, and others |
The biggest difference is that Tibeto-Burman mountain peoples not found in India (Gurung, Tamang, Magar, Sherpa, and others) exist as a middle tier. These groups do not fit entirely within the Hindu framework, and many follow Buddhism or animist beliefs.
Nepal's social groups are broadly divided into three geographic and cultural groups: the Hindu castes of the hill region (Bahun, Chhetri, Dalit, and others), the Tibeto-Burman peoples of the mountain region (Gurung, Tamang, Sherpa, and others), and the Indian-descended Madhesi population of the southern Terai plains.
According to the 2011 census, the largest ethnic group is Chhetri (about 16.6%), followed by Bahun (about 12.2%), Magar (about 7.1%), Tharu (about 6.6%), and Tamang (about 5.8%). Dalits (Scheduled Castes) make up about 13% of the total population.
Nepal's caste system was formally stratified by the 1854 Muluki Ain (national legal code). It is broadly explained in four tiers — "Tagadhari" (sacred-thread-wearing castes), "Matwali" (alcohol-drinking peoples), "Pani Nachalne" (those from whom water cannot be accepted), and "Achhut" (untouchables) — though academically it is common to classify it into five categories by adding a tier of those whose touch is acceptable but from whom water is not accepted (Muslims, foreigners, and others).
Bahun (Brahman), Nepal's top caste, is a priestly class equivalent to India's Brahmins. Though they make up only about 12.2% of the population, they wield overwhelming influence in politics, administration, and education. Many past prime ministers have been Bahun, and the tendency for Bahun to be well represented among bureaucrats and educators continues today.
Chhetri (equivalent to Kshatriya) is Nepal's largest ethnic group, making up about 16.6% of the population. They have historically held military and administrative roles; King Prithvi Narayan Shah, who founded the Gorkha dynasty, belonged to Thakuri, a royal sub-caste ranked above Chhetri. Bahun and Chhetri together are called the "hill Hindu upper castes" and have formed the ruling class of Nepali society.
The Newar are the indigenous people of the Kathmandu Valley, with their own language (Newari) and culture. More than 25 occupational castes exist within the Newar community itself, and it is uniquely a group in which a complete caste system — from a high caste equivalent to Brahmin down to untouchables — exists within a single ethnicity. They are skilled in commerce and have long supported Kathmandu's economy.
Tibeto-Burman mountain peoples such as the Gurung, Tamang, Magar, Rai, and Limbu were classified as "Matwali" (alcohol-drinking peoples) under the Muluki Ain. Because drinking alcohol is considered "impure" under the Hindu concept of purity and impurity, these peoples were positioned in the middle tier of the varna system.
The Gurung and Magar, known worldwide as Gurkha soldiers, have a long history of enlisting in the British and Indian armies as brave soldiers in large numbers. Among Nepalis who run Nepali restaurants in Japan as well, many come from these ethnic groups.
Nepal's Dalits (untouchables) make up about 13% of the population. They are broadly divided into hill Dalits (Kami, Damai, Sarki, and others) and Terai Dalits (Dom, Chamar, Dhobi, and others).
India's Dalits, like Nepal's, have been made to engage in occupations considered "impure." Occupational names such as Kami (blacksmith), Damai (tailor/musician), and Sarki (leatherworker) have become surnames and caste names as-is.
In rural areas, discrimination against Dalits is still reported today, including restrictions on using public facilities, bans on entering temples, and prohibitions on sharing meals with upper-caste people. Violent incidents targeting inter-caste romantic relationships also continue unabated.
High-altitude peoples such as the Sherpa, Thakali, and Dolpo culturally belong to the Tibetan Buddhist sphere and do not naturally fit within the Hindu caste system. However, they were classified as "Matwali" under the Muluki Ain for the sake of convenience.
The Sherpa are world-famous as Everest climbing guides and are a group that has achieved economic success in tourism. Within the framework of the caste system they are positioned in the middle tier, but in actual economic power and international recognition, they sometimes surpass the high castes.
The Thakali are a minority ethnic group in the central mountain region, known for their business acumen, and run hotels and restaurants across Nepal. It is said that the Thakali spread the "dal bhat" (lentil curry and rice) set-meal style nationwide, exerting a major influence on Nepali food culture. As this shows, caste ranking and actual economic power or social influence do not necessarily match.
In Nepal, surnames (family names) are directly linked to caste and ethnicity. Surnames tend to be even easier to infer from than in India. However, some surnames, such as Thapa and Rana, span multiple groups, so caste cannot be determined from a surname alone. This social structure is the background behind searches for "list of Nepali caste surnames" and "how to identify Nepali caste."
Nepali surnames broadly fall into three patterns: cases where the caste name becomes the surname as-is (Gurung, Tamang, Magar, and others), cases where a title becomes the surname (Sharma = Bahun, Thapa = Chhetri, and others), and cases where an occupational name becomes the surname (Kami = blacksmith, Damai = tailor, and others).
There is no need to try to guess someone's caste in interactions or business with Nepalis living in Japan, but knowing the meaning of surnames as background knowledge is useful for cultural understanding.
| Caste/Ethnicity | Tier | Main Surnames | Notes |
|---|---|---|---|
| Bahun (Brahman) | Top | Sharma, Poudel, Panta, Dahal, Timilsina, Acharya, Upadhyaya, Regmi | Common among priests, teachers, and administrators |
| Chhetri | Upper | Khadka, Basnet, Thapa, Karki, Pande, Rana, Shahi, Bista | Common among military and administrative officials. Nepal's largest ethnic group |
| Newar | Middle (with internal hierarchy) | Shrestha, Joshi, Pradhan, Maharjan, Shakya, Bajracharya | Indigenous to the Kathmandu Valley. Strong in commerce |
| Gurung | Middle (Matwali) | Gurung | Famous for Gurkha soldiers. Many are Buddhist |
| Tamang | Middle (Matwali) | Tamang, Lama | Common in the mountainous areas around Kathmandu |
| Magar | Middle (Matwali) | Magar, Ale, Pun, Rana Magar | Common in western Nepal. The mainstay of Gurkha soldiers |
| Rai | Middle (Matwali) | Rai | Eastern Nepal. Part of the Kirat cultural sphere |
| Limbu | Middle (Matwali) | Limbu, Subba | Eastern Nepal. Has its own Kirat religion |
| Sherpa | Middle (Matwali) | Sherpa | World-famous as Everest climbing guides |
| Tharu | Middle (Terai ethnic group) | Tharu, Chaudhary | Indigenous to the Terai plains. Engaged in agriculture |
| Kami | Dalit | Kami, Bishwakarma | The blacksmith caste. Bishwakarma is a surname adopted in recent years |
| Damai | Dalit | Damai, Pariyar, Darji | The tailor/musician caste |
| Sarki | Dalit | Sarki, Nepali | The leatherworker caste |
Notably, some Dalits have adopted surnames such as "Bishwakarma" and "Nepali" to avoid caste-based discrimination. "Bishwakarma" is the name of a Hindu god of crafts, and it is the surname that people of the blacksmith caste chose in place of the discriminatory "Kami."India's Dalits This is a similar phenomenon to the movement among Dalits in India to change their surnames.
The Newar surname system is also especially complex. Surnames such as Shrestha (upper merchant caste), Shakya (Buddhist goldsmiths who claim descent from the Shakya clan), Maharjan (farmer caste), and Bajracharya (Buddhist priest caste) directly reflect the internal caste hierarchy of the Newar community. Knowing this internal hierarchy is helpful for understanding business customs when dealing with the Newar in Kathmandu.
Another point to watch when identifying caste from a surname is that the same surname can mean different things depending on the region. "Lama" is a Tamang surname, but it differs from the Tibetan Buddhist "lama" (senior monk). "Sharma" is a Bahun surname in Nepal, but it is also widely used as a Brahmin surname in India, so it cannot be used to determine nationality.
Nepal's caste system was institutionalized under Hindu monarchy and reinforced through legal codes.
Nepal's caste system was substantively introduced in the Kathmandu Valley during the Malla dynasty of the 14th-15th centuries. When King Prithvi Narayan Shah of the Gorkha Kingdom unified Nepal in the 18th century, hill Hindu values spread across the entire nation, and Tibetan-descended peoples and indigenous groups were also incorporated into the Hindu hierarchy.
What decisively fixed Nepal's caste system in place was the "Muluki Ain" (national legal code), enacted in 1854 by Jang Bahadur Rana, prime minister of the Rana family. This code classified every ethnic group and caste within Nepal into four tiers.
| The Muluki Ain's Classification | Nepali Term | Meaning | Corresponding Groups |
|---|---|---|---|
| Tier 1 | Tagadhari | Wearers of the sacred thread | Bahun, Chhetri, high-ranking Newar |
| Tier 2 | Matwali (cannot be enslaved) | Drinkers of alcohol | Gurung, Magar (cannot be enslaved) |
| Tier 3 | Matwali (enslaveable) | Drinkers of alcohol | Tamang, Chepang, and others (could be enslaved) |
| Tier 4 | Pani Nachalne / Achhut | Those from whom water cannot be accepted | Dalits such as Kami, Damai, and Sarki |
A distinctive feature of the Muluki Ain is that it divided the Matwali (alcohol-drinking peoples) into a group that "could not be enslaved" and one that "could be enslaved." The Gurung and Magar, valued militarily as Gurkha soldiers, were deemed "non-enslaveable," while the Tamang and others were classified as "enslaveable." This distinction was based on military usefulness, a logic separate from religious purity and impurity.
In 1963, under the reign of King Mahendra, the New Muluki Ain was enacted, and caste discrimination was legally abolished. However, legal abolition did not mean a change in social practice, and caste discrimination remained deeply entrenched, especially in rural areas.
Under the multi-party system restored after the 1990 pro-democracy movement (Jana Andolan), voices calling for caste and ethnic rights grew louder. After the 2006 peace agreement with the Maoists, the monarchy was abolished and the country transitioned to a federal republic. In this process, the political voice of Dalits and indigenous peoples has expanded.
Nepal's new constitution, enacted in 2015, explicitly prohibits caste discrimination and establishes the following provisions.
However, a large gap remains between the constitution's ideals and social reality. In particular, discontent has erupted among the Madhesi community in the Terai region over what they see as unfair electoral districting, leading to large-scale protests and a blockade of the border with India in 2015.
The new constitution introduced a federal system, distributing authority across seven provinces, but the fact that provincial boundaries do not match caste and ethnic distributions has become a new source of conflict. How effectively the rights of indigenous peoples and Dalits are protected will depend on how provincial governments operate going forward.
The reservation system in Nepal is also not as systematically developed as in India. Quotas for Dalits, indigenous peoples, women, Madhesi, and others have been set in civil service hiring and parliamentary seats, but the specific ratios and implementation are Reservation System not as clearly defined as India's, and challenges remain regarding effectiveness.
While caste discrimination is legally prohibited in modern Nepal, discrimination as a social practice remains deeply entrenched.
In rural areas, discrimination against Dalits occurs on a daily basis. Specifically, reported cases include bans on entering upper-caste homes, restrictions on using public water sources, bans on entering Hindu temples, and refusal to share meals.
In 2020, in western Rukum district, a Dalit boy was beaten to death by a group over his relationship with an upper-caste girl, sparking nationwide protests. Violence against inter-caste romance and marriage is recognized internationally as Nepal's version of "honor killing" and is regarded as a serious problem.
In urban areas such as Kathmandu and Pokhara, caste consciousness is not as strong as in rural areas. Especially among the educated younger generation, economic power and education level are increasingly becoming the standard of social evaluation, rather than caste.
Nepal relies heavily on exporting its labor force abroad, with remittances accounting for about 25% of GDP. Many of the migrant workers heading to the Middle East and Malaysia are of Dalit origin, and their work experience abroad is a factor driving change in caste consciousness. While more people feel "caste no longer matters" after returning home, a contradiction also arises in that they are drawn back into the old caste order once they return to their hometowns.
In the IT industry and tourism, an environment where people are evaluated by ability regardless of caste is spreading. Especially in the trekking and tourism industries of Pokhara and Kathmandu, mountain peoples such as the Sherpa and Gurung have succeeded as business owners, and cases of them earning more than Bahun or Chhetri are increasing. Economic globalization is becoming a force that shakes up the fixed hierarchy of caste.
Dalit women face a "double discrimination of caste and gender." Limited educational opportunities, the practice of early marriage, domestic violence, and caste-based sexual violence combine to place them in the most vulnerable position in Nepali society.
According to UN reports, the literacy rate among Dalit women is far below the national average, and their political participation is also limited. Although the quota for women's political participation was expanded under the new 2015 constitution, Dalit women remain a small minority among elected officials.
In rural western Nepal, a practice called "chhaupadi" remains, in which menstruating women are treated as "impure," driven from the house, and made to stay in a shed or cattle barn. This practice is not limited to Dalit women, but lower-caste women tend to be placed in worse conditions. A law criminalizing chhaupadi took effect in 2017, but it has not been eradicated.
Education is the most effective means of changing the situation of Dalit women. With support from NGOs and international organizations, school enrollment rates among Dalit women are improving, but high dropout rates, the practice of early marriage, and dropping out for economic reasons remain major challenges. Cases of educated Dalit women improving their social standing are increasing, but structural change will likely still take time.
The Nepali community in Japan is expanding year by year, and understanding the caste system is increasingly needed within Japan as well.
There are more than about 150,000 Nepalis in Japan, many of whom run "Indian" restaurants (actually serving Nepali food) across the country. Caste consciousness remains among Nepalis in Japan as well, and caste is sometimes taken into consideration in community interactions and marriages between Nepalis.
That said, there is no need to be concerned about a Nepali person's caste within Japanese society, and it would be discriminatory for a Japanese person to judge someone's caste from their surname and change how they treat them. The caste system is strictly an internal structure of Nepali society, and it is inappropriate to use caste as a basis for employment or business dealings in Japan.
When Japanese companies hire Nepalis, there are points to be mindful of regarding caste. Asking about caste or ethnicity in an interview is a discriminatory act. On the other hand, it is worth being aware that caste consciousness can sometimes affect relationships among Nepali staff themselves.
Consideration around food is especially important. Hindus do not eat beef. Some Bahun are strict vegetarians, and some even avoid using the same cooking utensils as meat dishes. On the other hand, mountain peoples such as the Gurung and Tamang have no aversion to eating meat and regularly eat buffalo or chicken. When choosing food for a staff cafeteria or social gathering, these differences need to be taken into account.
Religious holidays are also important to understand. During Nepal's biggest festivals, Dashain (around October) and Tihar (around November), Nepali staff often want to go home to visit family. South Asia's cultural background— management that takes this into account leads to building a relationship of trust.
In many cases, caste or ethnicity can be identified from a surname. Sharma and Poudel correspond to Bahun (top caste), Khadka and Thapa to Chhetri (upper caste), Gurung and Tamang to mountain peoples (middle tier), and Kami and Damai to Dalit (lowest tier). However, in recent years some Dalits have changed their surnames, so there are limits to judging by surname alone.
In the Muluki Ain's classification, the Gurung belong to the "non-enslaveable" group within "Matwali" (alcohol-drinking peoples) and are positioned in the middle tier. They are known worldwide as Gurkha soldiers and remain active in the British and Indian armies today. Many are Buddhist, and many hold a self-identity distinct from the Hindu caste hierarchy.
Dalits, classified under the Muluki Ain as "Pani Nachalne" (those from whom water cannot be accepted) and "Achhut" (untouchables), are the lowest tier. This includes occupational castes such as Kami (blacksmith), Damai (tailor), and Sarki (leatherworker). They make up about 13% of the population; legal discrimination was abolished in 1963, but social discrimination continues, especially in rural areas.
Japan does not have a caste system like Nepal's, but caste consciousness can remain within the Nepali community in Japan. Japanese people do not need to concern themselves with a Nepali person's caste, and treating someone differently based on caste in employment or business would constitute discrimination.
Caste discrimination is explicitly prohibited under the new 2015 constitution, but discrimination remains deeply entrenched, especially in rural areas. Reported cases include restrictions on Dalits using public facilities, violent opposition to inter-caste marriage, and employment discrimination. Change is progressing in urban areas and among younger generations, but it has not been fully eliminated.
A major difference is that while Nepal's caste system is based on the Hindu varna framework, it incorporates Tibeto-Burman mountain peoples as a middle tier. The top caste is called Bahun, and the warrior class is called Chhetri. The timing of legal abolition also differs from India's.
The Muluki Ain is a national legal code enacted in Nepal in the 19th century that classified every ethnic group and caste into tiers, fixing the system in place. It was divided into tiers such as sacred-thread wearers, alcohol drinkers, and untouchables, with some mountain peoples of military value given their own distinct positioning.
In many cases, caste or ethnicity can be identified to some extent from a surname. However, some people change their surname to avoid discrimination, and some surnames are shared with Indian Brahmins, so there are limits to judging by surname alone.
As a mountain people, the Gurung are positioned in the middle tier. They are known worldwide as Gurkha soldiers, with a history of serving in the militaries of various countries. Many are Buddhist, and quite a few hold a self-identity distinct from the Hindu caste hierarchy.
Caste discrimination and untouchability are explicitly prohibited under the constitution. However, discrimination remains deeply entrenched, especially in rural areas, and reports include restrictions on using public facilities and bans on entering temples. Incidents rooted in discrimination have also led to protest movements.
Asking about caste or ethnicity in an interview is a discriminatory act, and judging someone's caste from their surname and changing how you treat them is also discriminatory. On the other hand, consideration around food is practically important — Hindus do not eat beef and some are vegetarian, while some mountain peoples eat buffalo or chicken. It is also worth understanding that many staff want to go home during Dashain and Tihar.
Nepal's caste system is a distinctive social structure in which Tibeto-Burman peoples have been added to India's Hindu-based status system. Let's review the key points of this article.
India's Caste System, The Reality of Dalits, How the reservation system works— reading this alongside that article gives a deeper understanding of South Asian social structure.
[References and sources]
-Ministry of Foreign Affairs of Japan, "Basic Data on Nepal"
-Central Bureau of Statistics, Nepal
-Wikipedia"Caste system in Nepal"
-Wikipedia, “Caste system in Nepal” (including the Muluki Ain chapter)
-Ritsumeikan University, "The Objectivity and Arbitrariness of Nepali Perceptions of Caste Hierarchy"
-Nepal Tourism Board, "The People of Nepal"
MORE
Can Japanese products be placed on India's quick commerce?Will supermarkets in India stock Japanese products?Is wholesaling to India's ubiquitous kirana shops possible?Which malls in India are UNIQLO and MUJI in?Where does sales channel development in India start? How distribution works and how to choose a channelOrders placed in India do not arrive | How to find suppliers of ingredients and materials, and what to do about itSOJAPAN
We support Japanese companies entering India, from market research through local partner development, test sales, and import.