IANS/Kathmandu
India and Nepal are to hold annual economic summits alternately in each others’ countries, it was announced yesterday.
The Confederation of Indian Industry (CII) and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) jointly conveyed the decision to Nepal President Ram Baran Yadav and Prime Minister Sushil Koirala yesterday.
A CII delegation led by president-designate Ajay S Shriram is currently in Kathmandu to attend the Nepal Economic Summit-2014 as guests.
A statement released by FNCCI stated that the two industry bodies are intensely engaged and working closely to promote bilateral economic activities, injecting investment in new sectors.
“In a joint initiative of CII and FNCCI, the two sides have agreed to convene Nepal-Indian economic summit on annual basis in an alternative country,” the statement said
The CII team held separate talks with President Yadav and Prime Minister Koirala and discussed bilateral economic, trade and investment expansion.
Rajive Kaul, past president of CII, Chandrajit Banerjee, director general of CII, Sanjay Budhia, chairman of the CII National Committee on Exports, and Manish Mohan, director (South and Central Asia) of the CII were the members of the delegation that met Nepal’s top leaders.
The CII delegation said that Indian investors were interested in employment generation, energy development, and commercialisation of agro-based industries, investment expansion and tourism in Nepal and urged the Nepali officials to create such a favourable environment that they can come in the Himalayan nation in a big way.
The CII representatives informed the president and prime minister of Nepal that both business organisations would work closely to create employment and economic development of their respective countries.
“The CII delegation is very encouraged from these two meetings and will convey the kind support provided by the president and the prime minister to potential Indian investors,” the statement said.
While addressing the economic summit, CII president-designate Shriram stressed on closer economic integration and more balanced trade relations between Nepal and India. Highlighting how reforms initiated in the early 1990s in India heralded a new era in the Indian economy, Shriram said they were ready to share what they learnt.
“When import taxes were brought down from 350% to 30%, there was a hue and cry in India, but it ultimately helped enhance competitiveness of Indian industries,” he said.
According the government statistics, about 525 Indian companies are engaged in a range of activities from manufacture to tourism in Nepal, and India is the biggest source of foreign
investment.
Statistics provided by Nepal’s department of industry (DoI) showed that the total project cost of these 525 Indian ventures stood at Rs66.61bn, with total fixed cost of around Rs54.60bn. The component of foreign direct investment was almost Rs34.80bn up to the middle of the year 2013, the report said.
An Indian embassy report also said that Indian firms are the biggest investors in Nepal, accounting for 47.5% of total FDI proposals approved. Direct investment of Indian Rs42.53bn ($448mn) has flowed into Nepal in 2013.
The statistics also showed that since Indian companies started investing in Nepal decades ago, by mid-2013, 303 manufacturing firms, 125 service-related industries, 54 tourism-related ventures, seven agro-based industries, 17 construction firms, 13 energy based and six minerals-related industries, firms and companies have operated in Nepal.
In just the one year, 2012-13, at least 24 new Indian companies ventured into Nepal. The total project cost of these is estimated at Rs3.88bn, with Rs3.48bn fixed cost. These brought Rs2.29bn in foreign direct investment.
India had made a commitment of Rs780mn in the first six months of 2013. In 2013, Indian investment marginally increased to Rs2.50bn from Rs2.29bn in the previous year.
Since a new political environment has been created with the election of the constituent assembly and with heightened hope of political stability, more Indian investment can be expected, an official in Nepal’s
department of industry said.