Providing assurance of a conducive socio-political and business environment, the visiting Prime Minister of Nepal, Mr Baburam Bhattarai, announced a slew of steps to attract Indian investment.
Addressing a business meeting organised by industry chambers on Friday, Mr Bhattarai said: “We have planned Special Economic Zones targeting Indian, Chinese and other markets for which infrastructure development is currently underway. We expect private sector investment in these economic zones.”
Other measures include setting up a Social Security Fund for better industrial relations and constituting a Board of Investments chaired by the Prime Minister to provide a helping hand to potential investors. He also outlined Nepal's plans to announce 2012 as ‘Investment Year' for putting up different infrastructure and business projects for large scale investments by joint ventures or foreign companies.
India and Nepal are expected to sign two agreements-Double Taxation Avoidance Agreement and Bilateral Investment Promotion and Protection Agreement (BIPPA). “The new DTAA between the two countries embodies modern principles for creating better investment environment and reducing the cost of doing business”, added Mr Bhattarai.
During 2010-11, bilateral trade stood at $4 billion. Mr Bhattarai said: “India remains a significant economic partner of Nepal and the single largest source of our foreign investment. But there is serious imbalance in our trade and this can change only when Nepal produces commodities and services that can find market in India.”
“Nepal's trade deficit with India was $3 billion. This trade imbalance is not just bad for Nepal. It is equally bad for India in the longer run. Correcting this is in the interest of both the economies,” he added.