Despite scores of law enforcement agencies across the world battling to control drug smuggling, the menace has mushroomed last year with growing links between South Asian neighbours India and Nepal, enforcement officials said.
"Cannabis has become the most widely used illicit drug worldwide and in the last two decades, more potent forms have been developed," said the annual report of the International Narcotics Control Board, released in Kathmandu on Friday.
"(It) is associated with an increasing number of emergency room admissions... There are also indications that cannabis use may be associated with an increased risk of psychotic disorders and schizophrenia."
Nepal is the biggest producer of cannabis resin in South Asia. According to Hemant Malla, senior police official at Nepal's Narcotics Drug Control Law Enforcement Unit, there has been an alarming increase in the cultivation of cannabis in the Terai plains in the south along the border with India.
Besides the home-grown cannabis, Nepal is also being flooded with low-grade heroin from India and with opium.
India is the main producer of opium poppy to meet the world's licit requirement for medicinal and other licit purposes.
However, the licit produce is being smuggled and sold illegally in Nepal through Raxaul in India's Bihar state with the source being the fields in India's western Rajasthan state, Malla said.
While Nepal serves as the transit for high-grade heroin that is made in Afghanistan and intended for Europe, America and Canada, low-grade cheap heroin is smuggled from India to be sold in the Himalayan republic.
In the past, Nepal was used as both transit and local market for amphetamines - like yaba, capsules containing a mixture of caffeine and methamphetamine. They came from Myanmar though Thailand.
However, recently, Nepal police have seized the substance in crystal form - commonly known as ice - that came from India.
"Most of the drug smugglers caught in India are Nepalis followed by Nigerians," Malla said. "In Nepal, most of them are Indians, followed by Nigerians."
In 2008, of the 634 people arrested in Nepal for drug smuggling, 72 were foreigners, including 17 women.
"About 50 percent of them are Indians," Malla said.
Law enforcement authorities fear that growing drug abuse will see a spurt in HIV/AIDS.
Nepal has about 48,000 estimated drug addicts. According to Kuber Rana, deputy inspector-general of Nepal Police, about 60 percent of them use drug injections, which increase the dangers of HIV/AIDS infection.
In India, nearly nine percent drug injectors reported HIV infection in 2006 while in Bangladesh it was seven percent.
Nepal has the highest rate of HIV among drug injectors due to the low average income, low awareness and lack of easy availability of new syringes.
In 2007, Nepal reported 34 percent infection among drug injectors.