The ongoing political strife in nearby Nepal threatens to affect Indian companies working out of Nepal while India Inc continues to fight the global downturn.
The Federation of Industrial Cambers of Commerce and Industry (FICCI) found in a recent survey in Nepal that Indian companies were facing stiff resistance from trade unions and the situation was worsening due to the political strife.
“Industries are badly hit by acute shortages of power and raw materials, petrol and diesel supply have run out and the labour unrest has struck at the very heart of businesses,” the survey said.
Nepal is going through a political turmoil after Prime Minister Pushpa Kamal Dahal ‘Prachanda’ resigned, protesting President Rambaran Yadav’s decision to overturn his sacking of Army chief General Rookmangud Katawal.
Several Indian industrial houses that have businesses or were planning to foray into Nepal with new ventures have now reportedly decided to step back.
“The ongoing social turmoil has made us change our mind. We have shelved our plans of exploring the possibility of setting up a hydel power plant in that country,” SN Agarwal, vice president, Bhoruka Enterprises, which builds hydel power plants, told Hindustan Times.
Dabur Nepal, which has a fruit juice plant in that country, is facing raw material shortage. “Packaged juices are exported from the plant all over India,” said a company official on the condition of anonymity. “A shortage of raw material, power coupled with the strike, has had an impact on our operations.”
FICCI secretary general Amit Mitra said the body plans to take up the matter with the authorities in Nepal “so that industrial operations are resumed at the earliest.”
Tata Communications, which has a joint venture with the Nepal government, felt if the situation deteriorates further it would make business environment unviable.