Wedged between India and China, Nepal is home to more than 1,300 Himalayan peaks – 414 of them, including Mount Everest, are open to foreign climbers who turn up in hundreds every year.
An ice avalanche on Mount Everest in April killed 16 Sherpa guides in the biggest disaster in the history of the world's tallest mountain, highlighting concerns that the Sherpas were paid too little compared to the risks they take in guiding their clients on the dangerous slopes of Mount Everest.
Dipendra Paudel, a Tourism Ministry official, said the insurance cover for the guides would be raised to $15,000 from $10,000. Medical insurance for each guide has also been increased to $4,000 from $3,000.
The new rates, to apply for all mountains including the 8,850 metre (29,035 feet) Everest, will come into force from next month, Paudel told Reuters.
"The hike will address to some extent the demand by Sherpas for better compensation," said Dambar Parajuli, chief of the Expedition Organisers' Association, said on Friday.
Following the Everest avalanche Sherpas criticised the government for doing little for their welfare compared to the hefty amount of money it collected from climbers as permit fees.
They also called for a climbing ban out of the respect for their fallen colleagues forcing 334 foreign climbers to call off their attempts to scale Everest this year.
The government said their permits would remain valid for five years as authorities moved to encourage climbers to return.
Sherpas earn up to $7,000 or more every year – 10 times Nepal's per capita income.