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Nepal has been unable to attract significant foreign investment despite offering a range of incentives to investors, according to the government’s own assessment.

However, the country could turn the large and dynamic Indian market to its advantage by making effective use of the recently signed trade treaty with India, which lowers the domestic value-added requirement to 50 per cent.

The treaty would allow a substantial share of the resources generated by multinational corporations to remain within Nepal, while encouraging the production of high-quality goods capable of competing in the Indian market. This, in turn, could boost revenue and help build a stronger industrial base.

People’s Review June 22, 1992