Dear captains of business and industries from Nepal and India.
Thank you for hosting this roundtable which is different from what I addressed last time.
I have carefully listened to you. Very important suggestions and comments have come from the floor. It has been really encouraging to get such valuable feedbacks.
CEO from Investment Board of Nepal made a comprehensive presentation. I will not repeat what he has said. But let me underline a few points that I deem important to share with you.
This is a commitment by a Prime Minister whose only aim is to bring about visible changes in the living standard of our people.
- Nepal’s political transformation has been truly historic. We have institutionalized our political gains through a new constitution. Our next objective is economic transformation. Our Motto is: Prosperous Nepal and Happy Nepalis.
- We aspire to be middle income country by 2030 and graduate from LDC status at an early date.
- We have a strong government at the centre that enjoys majority of three-fourth membership of the lower house. Stable Government means stability and continuity in policy regime.
- Following the formation of the strong government, law and order situation has improved. This means Nepal is nowsafe for foreign investment. Any attempts to disturb law and order situation will be firmly dealt with.
- We need massive investment in every sector. Nepal is considered a virgin land as far as investment is concerned. Investment in any sector is highly profitable. There is no competition for investment.
- Indian investors have invested across the globe so why not togo to the next door Nepal? Geographical proximity, easy access, cultural similarities are all there to make you feel good about Nepal. Seize the opportunity!
- Investors always look for markets. Look at Nepal’s position. For us, market is not a problem. Production is a problem. It is laying between the two vibrant economic powers of the world, India and China, that assure you of a promising market of over 2.5 billion populations. We enjoy duty free quota free market access in our neighbourhood. In addition, we enjoy duty free access to European market and preferential market into the USA for over 70 products as an LDC.
- We are ready to listen to you. We want to know your views. We are committed to further improving business climate in the country. Reform is always desirable. We have enacted the laws and policies on foreign investment, Public-Private Partnership, industrial enterprises, banking and intellectual property. Come and talk to our authorities.
- We are committed to liberal economic policy with private sector as a key partner. We have no intention to reverse the trends. Rest assured, we cannot go against the global trends.
- Nepal has to offer attractive incentives. Compared to other countries, our incentive structure is quite attractive. We have reduced tariffs, simplified tax regimes and focused on the development & operation of trade related infrastructure.
- We are planning to establish SEZ in major industrial centres of Nepal mostly in cities bordering India with incentives for industries including liberal labour law.
- We have streamlined administrative procedures. Our bureaucracy is accessible and accountable. We are committed to provide corruption- free administration. We are pursuing policy of zero tolerance on corruption. Good governance and rule of law are at the core of our governance system.
- We have stablished a high-powered investment board headed by prime minister that brings together government and private sector.It is facilitating the big investors by providing all services from single window.
- There is a favourable fiscal environment:we have low tax slabs, no income tax on dividends and export earnings, exemption of tax and tax holidays for certain industries, exemption of duty and fees on the key inputs used by an export Industry.
- Our law permit full repatriation of income earned from investment and reinvestment.
- Foreign Companies registered in Nepal can purchase, own and sell land.
- No discrimination between national and foreign investors. No nationalization of private industry. Double Taxation Avoidance Agreement has been signed with India. We are discussing the new version of bilateral investment agreement.
- The other factor that makes you competitive in Nepal is availability of cheaper labour force. Since we are not taking about high-tech industries at this point of time, our labour force will be an added asset for any business enterprise. We have reformed labour law and industrial relations have improved.
- Infrastructure is key to economic development.Top priority of Government is cross border infrastructures for better connectivity. Modern ICP at Birgunj is operating soon. ICPs at 3 other places are being built and Railway connectivity is being established at 5 border points.
- Bilateral motor vehicle agreement has been signed and operationalized which facilitates the movement of people across the border.
- Almost every sectors including manufacturing, hydropower, IT, mining and agro based industries are opened for foreign investment. It is quite a liberal regime.
- Power Trade Agreement with India has been signed. Nepal India both can benefit from utilization of hydropower resources.Cross border transmission lines are operational and we are going to build new transmission lines.
- Tourism is an attractive sector. There are many things that Nepal can offer. It is a tourist paradise. Combination of nature and culture makes Nepal adestination throughout the year. Nepal is an idle place for Indian tourists. Building tourism infrastructure is our priority. Regional airports are being developed in Pokhara and Lumbini.
- Agriculture and herbal processing are yet other areas in which investment can be profitable.
- IBN is facilitating the big Indian investments in Arun-3 and Upper Karnali. We were able to receive a pledge of 14 billion dollars in Investment Summit organized in Kathmandu last year.
Closing Remarks by the Rt. Hon. Prime Minister at Business Interactive Roundtable, New Delhi, Friday, April 6, 2018