This paper argues that ethnic paintings connotate situational ethnicity, adjusted by social change and ethnic boundaries. Based on anthropological fieldwork focusing on painter and mercantile communities, social-political connotations of ethnic art are discussed by applying an analysis of social semiotics in three discourses, employing the case of post-1990 Nepal. In particular: 1) Modern visual expressions of ethnicity are adopted into anti-hierarchical representations, as people engage in ethnic politics and cultural activities. 2) The two genres of ethnic painting, paubhā, and thangka, which were developed by traditional creators and informed by ethnicity, have experienced and developed a cross-boundary mode of operating in industries in response to social change. 3) In the market and mass media, the narrative of value construction regarding the tradition of ethnic art reveals a sign arena that identifies a drift toward the nation, the state, and civilization, prepensely attempting to mobilize semiotic resources through the lens of politics, the market, and global values.