India Inc tests Nepal’s insecure waters
India accounts for 45% of total foreign investment in Nepal. But Indian ventures are facing a tough time in the Himalayan nation due to political instability and unfair treatment.world Updated: Nov 29, 2010 13:59 IST
India accounts for 45% of total foreign investment in Nepal. But Indian ventures are facing a tough time in the Himalayan nation due to political instability and unfair treatment.
In a bid to address these concerns and increase investment a team of Indian business leaders are in Nepal these days to confabulate with the government and industry bodies.
“Despite constraints, we need to renew our contacts and look for business opportunities,” said Sushanta Sen, Principal Adviser-Special Projects and South Asia (Confederation of Indian Industry).
The delegation met ministers for commerce, industry and information technology and urged them to address issues that are acting as impediments to more investment from India.
Non-signing of bilateral investment protection agreement and the revised provisions of double taxation—both approved by India—was one of the main issues that featured during deliberations.
Reduction of discount on custom duty given to Indian goods, government tenders carrying specifications that preclude Indian firms and problems faced by established Indian companies were also taken up.
“Nepal government needs to intervene and stop the smear campaign against Indian products and services,” said Sen.
He cited non-fulfillment of commitments made to the Manipal Group that has a medical college in Pokhara and adverse media reports against products made by Dabur Nepal as examples.
“Problems persist as Nepal is in a transitory phase due to political changes. No one is sure how long it will continue and that is an issue,” said Birendra Sasmal, CEO, Accel Frontline.
The delegation also held discussions with industry bodies and expressed concern at Indian hydro-power projects in Nepal getting targeted.
“Nepal’s trade deficit with India is growing and one way to bridge the gap is through investments. This visit was a step in that direction,” said Harsh Jain, First Secretary (Commerce) at the Indian Embassy in Kathmandu.