Nepal has failed to attract significant foreign investment despite several incentives offered to investors, according to HMG’s own reckoning.

Nepal could exploit the large and vibrant Indian market to its advantage by using the recent trade treaty with Indian market to its advantage by using the recent trade treaty with Indian, which reduces the domestic value-added component to 50 percent.

Under this treaty, a substantial part of the resources would remain within the country and high-quality products would be manufactured for effective competition in the Indian market. This would lead to an increase in revenue and, most importantly, create a strong industrial base.

People’s Review, 22 June 1992.