The Hindu Business Line : Nepal seeks joint ventures with Indian textile firms

CITING a highly liberalised FDI policy with macro-economic stability to boost, Nepal has sought joint ventures in textiles with Indian companies for taking advantage of the duty-free EU access now available for Nepalese items, as an LDC (Least Developed Country).

Making a presentation on `Investment opportunities in Nepal', at an interactive session organised by the Indian Chamber of Commerce (ICC) here on Friday, Mr Dinesh Chandra Pyakurel, Secretary, Industry, Commerce & Supplies, His Majesty's Government of Nepal, said in the post-quota regime, effective January 1, 2005, such joint ventures with Nepalese outfits would strongly benefit the Indian textile sector, which has inherent strengths in primary fabrics. He said such joint venture exports from Nepal with value-addition would be beneficial to both nations.

He said as part of the reforms initiatives being pursued for accelerated industrialisation and export promotion, a new industrial and FDI policy has been created. Nepal is also planning to set up export processing zones and SEZs (special economic zones) through enactment of an SEZ Act, for such exports, with built-in infrastructure and services, concessionary tax measures and flexible labour laws.

Citing a favourable investment climate in Nepal, he said operationalisation of the new Birganj Inland Container Depot is a major milestone for furthering Indo-Nepal trade through the transit corridor. He said talks are already on to include bilateral cargo. The issue of Nepal serving as a transit route for Indian cargo on India-registered and Nepal-registered vehicles is being discussed and likely to be finalised soon. He said the 1999 Transit Treaty and the importance of the Kolkata-Haldia transit route are major achievements.

The plus factors for investment, according to the senior bureaucrat, are added value of WTO membership, higher domestic level of certainty in policy procedures and delivery, increased transparency and economic governance. He said some 63 sectors/sub-sectors have been opened up for foreign investment, and an independent autonomous tribunal is being appointed for a close look at amendments to the existing laws and/or framing of new laws.

Pointing out that Nepal is a safe place to invest now, as talks were on with the Maoist rebels, and solutions would be found soon, Mr Pyakurel said deregulation of PSU enterprises has been taken up, and an Act is now in the process of being enacted to deregulate the petroleum sector and end the State monopoly.

Citing Nepal's legal provisions like the 1994 Privatisation Act, he said a privatisation committee has been set up to draft programmes, set priorities, evaluate enterprises, bid and recommend for Cabinet approval.

According to Mr Umang Kanoria, senior Vice-President, ICC, India is Nepal's largest trading partner, accounting for nearly 30 per cent of that country's total trade. The key sectors where the two countries can do business, said Mr Kanoria, are tourism, hydel power,agro-based industries, IT-related industries, education. Nepal has a sizable trade deficit with India at Nrs (Nepalese Rupees) 46 billion, with imports from India at Nrs 60 billion and exports at Nrs 22 billion. Nepal's major exportable items include woollen carpets, readymade garments.