Presidents and office bearers of Chambers of Commerce and Industries from both India and Nepal,
Members in my delegation,
Senior officials from the Government of India
Ladies and Gentlemen:
I thank the organizers for providing me this opportunity to be amongst the captains of industry and business here in New Delhi and for making excellent arrangements for this meeting.
That I have brought a business delegation with me underscores the importance that I attach to this meeting today. I hope our business delegation will fully utilize the valuable time by engaging their Indian counterparts in explaining business and investment opportunities in Nepal.
I thank the Chief Executive Officer of National Reconstruction Authority, Mr. Sushil Gyawali and that of Nepal Investment Board, Mr. Radhesh Pant, for their excellent presentations. I believe the presentations have been useful and informative for prospective investors present here.
In Nepal, we have recently accomplished the historical task of constitution making. The longstanding political agenda that hugely occupied us in the past several years is now successfully resolved.
Conclusion of the peace process is now a job accomplished, and growth, development and prosperity is an unfinished business. Without development, peace and stability cannot sustain.
There is an overwhelming consensus in Nepal that economic agenda should now be among the foremost priorities.There is also consensus that foreign investment is vital and we need to attract it.
In a globalized world, strength of economy can ensure dignity of a nation and its people. Nepal is fully aware of this reality and has accordingly identified economic development as its priority.
To develop, economy must grow and to grow, we need businesses, investment, industries and employment. As you represent the engine of growth, this opportunity to interact with you is important for me.
Growth can only be achieved when we have investors – both locals and foreign.When it comes to foreign investment in Nepal, Indian investorshave natural advantage.
Our two countries and peoples are close.The private sectors and business communities of the two countries are well known to each other. Nepalese entrepreneurs thus are reliable business partners for you.
I have come to tell you that Nepal needs you and it has many things to offer.
Nepalis pursuing a liberal economic policy. Government is only a facilitator. Investors are key actors, innovators, entrepreneurs and leaders.
Over the years, we have taken steps to improve and facilitate trade and investment environment. We have reduced tariffs, simplified tax regimes and focused on the development and operation of trade related infrastructure.
Export and import rules and procedures have been made open and liberal. Trade facilitation measures have been improved.Nepal and India have exchanged four different letters to expand, simplify and streamline transit facilities during this visit. We must emphasize that commerce and connectivity between our two countries must not be affected by consideration other than economic development.
Our tax slabs are low. There is no income tax on dividends and export earnings. We exempt tax, duty and fee on the products, machinery, equipment, tools and raw materials used by an export industry.
We have made administrative procedures simple. Our government machinery is easily accessible.
National Investment Board has been established to facilitate large scale investments. Board negotiates projects and provides one window services.
Simplified and liberal visa rules apply to investors and their family members. For Indian nationals, visas are not required.
We permit full repatriation of income earned from the investment. The same rule is applicable to reinvestment. Foreign companies registered in Nepal can purchase, own and sell land.
We provide sector-specific incentives of various kinds and scope. Nondiscrimination between Nepalese and Indian investors is our firm policy.
Law ensures that no private industry will be nationalized.
We have planned to set up Special Economic Zones and Industrial Estates in major business hubs of the country. Most of these will beestablished in the plain land next to Nepal-India border.
Investing within SEZ has multiple benefits that include flexible and investment friendly labour law.
Double taxation avoidance agreement between our two countries has also been signed.
Industrial relations have been improved.Labour law is being reformed.
We have defined private sector as partner for development and are promoting public private partnership, including in large scale infrastructure projects.
Consumer market is growing in Nepal as well as the rising towns and cities in populous Indian States of Bihar, UP and West Bengal that border Nepal.
Our financial sector is growing. Banks are ready to lendat competitive interest rate.
Workforce is our assets. Latest census shows that the working age population has increased to 57 percent, which is high even from developing country standard. Every year over 500 thousand youths enter into job market.
Labor cost is low and competitive. Literacy rate is high. Skill development is Government’s priority. Nepali people are known for hard work and honesty.
Rate of return is high. Talk to manufacturing companies like Dabur Nepal and Unilever as well as telecom operators, banks and insurance companies – how good profit they are making.
Further reform has been planned. Draft policies, bills and regulatory measures are under active consideration.
On top, our strategic location guarantees that access to market is not a problem in short, medium and long term.
Nepal is a least developed country and has benefits of preferential schemes offered by developed and developing countries. Most of our products enjoy zero tariff in developed countries. In WTO, Members — both developed and developing — have committed to further expand duty free coverage to products from LDCs like Nepal.
WTO Members have also pledged to offer preferential treatment to services and service suppliers from LDCs. To invest and produce in Nepal means to be able to benefit from these global, regional and bilateral preferential schemes, which are non-reciprocal.
Nepal believes that regional integration has benefits and is actively involved to make SAARC and BIMSTEC processes successful. We are also working closely with India, Bangladesh and Bhutan to improve trade, transit, connectivity and cooperation in energy at the sub-regional level.
The paradigm of trade and investment in the 21st century is shifting. Economies are integrating and production is disintegrating. Value chains are on the rise. This means there is more reason now for producers of two countries to link up.
India’s progress is inspiring – in business, technology, IT, infrastructure and so on.You are a fast growing big economy.As a close neighbour, we want to benefit from your success. Prime MinisterModiji has rightly said ‘sabkaasaath, sabkaabikaas’.
India is ourmajor partner in trade and development.
Our cross border infrastructures are improving. Railway connectivity is being established at 5 different points and modern integrated check posts at 4 places.
Cross border roads are being improved. Bilateral Motor Vehicle Agreement has been signed between the two countries to make movement easy.
Our doors are open for investment in almost every sector. These includemanufacturing, hydropower, tourism, services, IT, mining and agro based industries.
Hydropower could be a prime choice. 7000 rivers and rivulets in Nepal have massive power generation capacity. Solar and biomass have also good possibility.
We have already reached two big hydropower deals with Indian companies (Upper Karnali and Arun III). More are in the pipeline.
We have signed Power Trade Agreement with India. I have been informed that Government of India is reviewing its policy and regulation to ensure that our private power developers have access to huge Indian power market. This isof course goodnews.
Transmission infrastructure is being strengthened. Prime Minister Modiji and I inaugurated just the other day the first double circuit cross border transmission line between us. Several such transmission infrastructures have been planned.
Tourism is an attractive sector for investors in Nepal. We are gifted with beauty of nature and treasures of culture and civilization, in which we are closely linked with India.
Over the years, tourists from India are increasing – as pilgrims, vacationers and business delegations. It’s an opportunity to invest in facilities to cater to this growing number. Infrastructure is the key. We are developing regional international airports at two prime touristic hubs of Pokhara and Lumbini.
Our vision is to build Nepal a modern, prosperous and just country. We plan to graduate into a developing country by 2022. For this, we need massive investment in human resources, institutions and infrastructures to bring about economic transformation.
We want to overcome the vicious circle of poverty and underdevelopment. Government alone has limited capacity and resources. We invite the private sector, domestic and foreign, to invest resources, produce goods and services and create jobs.
My Government is committed to reform policies and expect private sector’s willingness to invest.
My Government will extend all needful support to facilitate your investment in Nepal.
Our common future lies in our shared prosperity. We are bound to be good friends forever. There is no alternative to cooperate and collaborate for mutual benefits.
I thank you for patience. This has been a long event.
Keynote Address by Rt. Hon. K.P. Sharma Oli, Prime Minister of Nepal, at the Interaction Programme with the Business Community
New Delhi, February 22, 2016