This paper investigates the effects of the lack of state recognition of Tibetan medicine in Nepal. Although scholars have investigated the relationship between Tibetan medicine and state institutions, discussions on the different trends of modernization of Tibetan medicine induced by the lack of state recognition is missing. It is based on the ethnographic study (participant-observation) of three Tibetan clinics and a 10-day training course in Tibetan message therapy (called Kunye) in Boudha, Kathmandu, conducted from the second week of February until the last week of April in 2015. A total of 17 interviews were conducted with the doctors and the clinic staff, and other relevant actors—local and foreign patients and officials of the organizations promoting Tibetan medicine in Nepal. The interviews were based on structured, semi-structured, and unstructured questions as well as informal discussions.

I found that the two groups—Himalayan amchi and Tibetan doctors—practicing Tibetan medicine in Nepal are affected differently by the lack of state recognition. Himalayan amchi are striving hard to sustain their practice and therefore are actively seeking state support in order to survive. Since the state does not recognize the traditional lineage system of amchi, the amchi have had to transform their medical knowledge by aligning with the state’s policy of what makes a proper medical system, which is based on the biomedical model of healthcare; this requires the amchi to modernize their practice by institutionalizing and professionalizing amchi medicine.

Contrary to the Himalayan amchi, the Tibetan doctors in Boudha do not have a similar pressure to modernize their practice because they were trained in the modern institutes of Tibetan medicine in India; so their practice in Boudha is already professionalized and institutionalized. Since the Nepali state tolerates their practice and they are able to cater their service to their foreign clientele, they are not struggling for mere survival like the Himalayan amchi. Tibetan doctors have taken advantage of the absence of recognition and regulation by creating commercial training courses that suit the tastes of their foreign clients.

Thus, Tibetan medicine is undergoing two major trends of modernization in Nepal due to the lack of state recognition: i) the path of professionalization and institutionalization followed by the Himalayan amchi; and ii) the path of commercialization followed by the urban based Tibetan doctors in the institutionalized clinics of Boudha. The latter also entails westernization of Tibetan medicine. Some local actors realize the shortcomings of both the trends and hence they are trying to create a middle path by combining the most useful elements of each approach. They want to promote the traditional practice by professionalizing it in a way that it becomes a marketable commodity, thereby creating a third model of modernization of Tibetan medicine that is both professional and commercial. The state has thus far only acted as a silent observer of these developments. However, if it takes action and recognizes Tibetan medicine, there are serious benefits for all the stakeholders.