Disaster capitalism creates political and economic space for neoliberal projects to benefit the wealthy disproportionately while marginalizing Indigenous groups. This paper examines how and the extent to which local disaster capitalism has affected Indigenous communities in Nepal’s Kathmandu Valley, as they recover from the 2015 earthquakes, and how local disaster capitalism ought to be countered. Based on an in-depth analysis of local disaster capitalism in Rudrayani Guthi, Nepal, the findings of this study demonstrate that Indigenous peoples have been negatively affected by state-sponsored disaster recovery schemes, whereas wealthy people and businesses have benefitted from them. Such schemes focus on “physical reconstruction” and “economic development”, dispossessing Indigenous lands to pave the way for housing, motorways, greenfield urban development, and hydropower. Many Indigenous groups are forced to be part of such schemes, while local disaster capitalism continues in the name of “disaster recovery”. The paper highlights the unfortunate reality of the local disaster capitalism taking shape and destroying Indigenous lives and livelihoods. The paper concludes by offering some principles used by Indigenous peoples while countering local disaster capitalism through confrontations with powerful actors and while protecting their land during the process of disaster recovery.