Nepal to Fast Track Karnali and Arun Projects Nepal Industry Minister meets Anand Sharma.

Press Information Bureau

Government of India

Ministry of Commerce & Industry

18-January-2012 17:34 IST

Nepal to Fast Track Karnali and Arun Projects Nepal Industry Minister meets Anand Sharma

Nepal has assured India of quick resolution of issues pertaining to Indian investment in Nepal. The Industry Minister of Nepal Mr Anil Jha in his meeting with Shri Anand Sharma , Minister of commerce Industry and Textiles, here today, singled out Karnali and Arun power projects for fast-track clearances. Shri Anand Sharma said that “this move on the part of Nepal will send a very positive signal for deepening of economic relations and boosting investor confidence.” Indian firms are the biggest investors in Nepal accounting for about 47.5% of total approved foreign direct investments. There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services (banking, insurance, dry port, education and telecom), power sector and tourism industries. Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India. They also provide direct employment to around 30,000 Nepali citizens and indirect employment to more than twice that number. As per extant FDI policy there is no restriction for inflows of FDI from Nepal. Both Governments have signed the text of bilateral investment protection and promotion agreement. Shri Anand Sharma assured Mr Jha of continued special relationship with Nepal.

The Nepalese Minister asked the Minister for better concessions for the jute products from Nepal. He also made a strong pitch for further concessions for Nepal imports and more investments from India. The bilateral trade between the two countries has increased from US$ 1985 mn in 2009-10 to around US$ 2700 in 2010-11 registering an increase of around 36%. Exports from Nepal to India have also grown from US$ 452mn in 2009-10 to US$ 476mn in 2010-11 (an increase of around 5.3%). Our growing mutual cooperation in the development of the hydropower potential of Nepal confirms the special relationship between our two countries. India would like to accelerate such cooperation which would usher in a new era of prosperity for citizens of Nepal. It is estimated that sale of electricity from the 40,000 MW hydropower potential of Nepal can generate revenues of more than 10 billion US$ per annum. Nepal could also attract a lot of investment in manufacturing/services sector by overcoming its present power shortage.

DS/gk