Nepal's past experiences have shown that market and investment from the United States of America are important for industrialisation to flourish in Nepal and generate the employment opportunity for the young Nepalese at home.
With the withdrawal of most favoured treatment for Nepalese garments, Nepal’s export to United States reduced drastically over the last one decade. Following the signing of Nepal's Duty Free Preferential Bill by President Obama in December, there is now room to revive the old market for Nepalese products.
At a time when Nepal’s trade deficit is growing widely and the earthquake badly destroyed industrial infrastructure, the Proclamation by the President of United States to implement Nepal Preference Program has its own significance and importance.
As Nepal Preference Program opens new opportunities for Nepalese products in the U.S. market, the 21st Annual General Meeting of the Nepal-USA Chamber of Commerce and Industry (NUSACCI) has concluded with a call to create conducive environment in Nepal for foreign investment.
NUSACCI also elected Moti Lal Dugar as vice president, Birendra Raj Rajkarnicar General Secretary, Sanjaya Agrawal Treasurer. The members include Gandhi Pandit, Brindaban Man Pradhanang,Bhakta Bahadur Gurung, Pawan Tuladhar and Kedar Man Rajbhandar.
“We must thank the American government for the President’s proclamation on the 15th of December 2016 to implement the Nepal Preference Program. Nepal can now start to enjoy duty free treatment on 66 items announced by the U.S. Senate last year,” said Kiran Sakh, who was elected the new president, with eleven members in the Executive Committee. “In fact, these 66 items will not help to increase export figure of Nepal to USA in any significant way. However, we should not lose hope. There are always possibilities of amendments and the only thing is we must keep trying and lobbying for our position.”
Nepal’s current legal regime is also not friendly towards foreign investor and foreign investment. Foreign Direct Investment Act and Foreign Investment and Technology Transfer Act have so many restrictions making it very difficult for foreigners, including Americans, to come to invest in Nepal.
As there are so many barriers for American investors, Nepal needs to reciprocate with the recent move, taking the initiatives to amend the FITTA. Addressing the general meeting, Ministry of Industry Nabindra Raj Joshi said the United States of America remains a main supporter of Nepal’s overall development. “As a main trading partner, America's investment and market is important for us,” said minister Joshi. “The government is amending FITTA, FDA and other regulations to create conducive environment for foreign investors, including the American.”
Business communities are also stressing the need to amend the acts. “The U.S. is a very big market for Nepali products like handicrafts, silver, jewellery, pashmina, carpets and garments. For this, Nepal needs to liberalise Nepalese laws, including FITTA, to pave the way for American companies to invest in Nepal,” said Sakha.
The role of private sector institutions like NUSACCI can be important to create the positive environment to increase the trade between the two countries.
“NUSACCI can play a role in recruiting American companies to come to Nepal and strengthen economic ties between our countries,” said U.S. Ambassador to Nepal Alaina B. Teplitz. Ambassador Teplitz said that this is a challenging time for private sector in Nepal. She said that Nepal government also needs to do more in legal reforms, making Nepal a conducive destination or American investors.
“I would like to draw the attention of Nepal government to work closely with private sectors for the promotion of export and bring in FDI form USA for the development of economy,” said Narendra Kumar Basnyat, president of NUSACCI. “Nepal also needs to take advantage of TIFA and use this platform to create a conducive export market in US and investment friendly avenues in Nepal for US investors.”
Despite new duty free preferential bill, there is the need of a lot of work to increase the trade between the two countries. “Since the majority of the 66 items mentioned in the sanction are non-sensitive categories in terms of the duty,this bill would at most have a very tepid effect on the Nepalese economy. In fact, these 66 items will not help to increase export figure of Nepal to USA in any significant way. Inclusion of at least a few categories like 340,341,347 and 348 same in 600 series can bring about the changes and stir up the economic activity as must have been the objective of the bill in granting Nepal this concession,” said Sakha.