Prior to Prime Minister KP Sharma Oli’s scheduled visit to India from February 19 to 24, the government has asked private sector organisations to submit suggestions on issues that need to be addressed by the Indian government during PM’s visit for the larger benefit of the country. Hence, private sector organisations, together with Nepal-India Chamber of Commerce and Industry, have been preparing recommendations in an integrated manner. The recommendations of the private sector are largely focused on enhancing bilateral trade and economic relations, attracting investment from India and cooperation in infrastructure development, among others. Saurya SJB Rana, president of NICCI, spoke to Pushpa Raj Acharya of The Himalayan Times on the agenda that he believes should be prioritised during PM’s visit to India. Excerpts:

PM Oli is visiting India in the near future. In this context, what suggestions would you like to give to the government regarding the issues that need to be raised during the visit to strengthen bilateral economic ties?

The private sector organisations — Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries and Nepal Chamber of Commerce together with NICCI — are formulating suggestions to give to the ministers on how to improve India-Nepal’s relationship on trade and transit. We had met the commerce minister and secretary today and given the integrated proposal from all four chambers based on our suggestions for the commerce secretary-level talks (Inter-Governmental Committee Meeting) which will be held after the PM’s visit to India.

As the next IGC meeting is scheduled to be held in the first week of April, we have also presented some of our recommendations that we’d like to be incorporated during the review of Nepal-India Treaty of Trade, which is slated to take place in October.

During the PM’s visit, we would like to see the talks to be focused on how to increase investment from India, and ensuring infrastructure and other projects are sufficiently viable to lure Indian investment. The government should also raise certain issues — which have been incorporated in our proposal — on trade and transit that need to be addressed immediately.

Moreover, we will have to focus on how to expedite the implementation of ongoing projects like Pancheswar Multipurpose project, among others. We certainly want the issues related to transmission lines to be sorted out and installation of agreed transmission lines to be fast-tracked. Similarly, early completion of Integrated Check Posts (ICPs) on border points being built with the assistance of Indian government is critical.

What sort of programmes are scheduled with private sector in India during the PM’s visit?

A group of around 25 private sector players will be the part of the PM-led delegation. There will be a conference hosted by the business sector in New Delhi, where the private sector of both countries will discuss investment opportunities and the required reforms in Nepal. Towards the end of the trip, the PM is scheduled to visit Mumbai, where another intimate meeting will be held. Chairmen, CEOs and heads of Indian industries will be present during the meet and we will discuss new avenues of investment in Nepal.

This means the private sector is well prepared to make the PM’s visit fruitful?

Few days back, during an interaction with the private sector, the prime minister had pointed out that the key thrust of his visit is to further the friendship with India. This means improving and strengthening ties by eliminating misunderstandings. We are doing our best to ensure the PM’s visit is productive.

Is NICCI, as a bilateral chamber, going to showcase some specific projects to lure Indian investment in Nepal?

Generally we inform Investment Board Nepal (IBN) of major projects in the offing. During the interaction with investors in India, IBN will be showcasing the possible avenues of investment in Nepal. Apart from our PM’s keynote speech, the IBN CEO will be making a presentation on Nepal’s investment climate.

You are in regular contact with Indian investors as the president of NICCI. What is their perception towards Nepal?

Right now there is a fairly negative perception because of political instability, power outages, labour unrest and delay in enactment of certain policies and laws, which could encourage efficient investment. There are worries on intellectual property rights as well. The proposed Labour Bill and Electricity Act are yet to be endorsed by parliament. Unless the policies come into force, it will be very difficult to lure foreign investment.

Generally, Nepali business people have very close ties with Indian investors. They tend to be well aware of the investment opportunities and feasibility of pursuing any project in the country. In NICCI, we have the Indian Business Forum (IBF), which looks into all major Nepal-India joint ventures. Over two years back, we had prepared a position paper and had either discussed with or circulated it to concerned ministries. There are several areas where improvement is required for further FDI to flow into Nepal. Unfortunately, a lot of those suggestions, which were very generic in nature and are needed for international FDI enhancement, have not been taken into consideration by the government. So, we will definitely raise the key issues with the ministries later.

As India is the largest source of foreign direct investment in Nepal, how can we gain the trust of Indian investors to increase investment in the country?

We have repeatedly informed the government that unless there is stable political climate and an incentive to do business here, it would be extremely difficult to attract FDI into the country. There are certain hiccups and misunderstandings in Nepal-India relations, which need to be sorted out very quickly. Both governments are in the process of not only normalising, but substantially improving our relations. There are various activities of joint mechanisms between India and Nepal, which have been stalled and need to be resumed urgently.

We need to ensure that the environment is conducive for further investment. Large scale investment from India in hydropower, tourism, and infrastructure will be some of our key foci since they would substantially aid in improving our balance of trade. The Nepali delegation will have to seriously convince Indian investors that Nepal is conducive for investment and long pending laws will be enacted as required to facilitate investors.

What is your opinion on the recent situation in relation to shortages and blockade of supplies?

The current development has been positive. Supply has been normalising in a rapid manner. We should be returning to some sort of normalcy by the end of this month in terms of supply. However, the business community is extremely worried about the long-term ramifications, wherein several industries and businesses are in a desperate financial state.

There are huge amounts of demurrage and detention charges accrued due to the border blockade. Does the PM-led delegation plan to seek the support of Indian government to waive such additional fees charged by shipping liners and private container freight stations?

It has been included in the agenda to see what the government of India can do regarding high detention and demurrage charges accrued. However, demurrage and detention charges are primarily not related to the government. It is a business-to-business transaction and chambers have already approached shipping agents in Kolkata for the exemption of such charges.

Implementation of India-assisted projects, like Postal Highway, ICPs and some other projects, are very slow. Can we expect that the PM’s visit will play an effective role in setting up the necessary mechanism for speedy implementation of such projects?

I think the PM’s visit will clarify why there are delays and how we can speed up the implementation of infrastructure projects. Rapid implementation of power sector projects and transmission lines would be critical to ensure smooth short- and medium-term energy supply from India.

The government of India has pledged huge amount of concessional loan to Nepal for mega infrastructure development and rebuilding of earthquake ravaged structures in the aftermath of earthquake. How will Nepal be able to utilise the Indian assistance in your opinion?

I think the same question has bothered all international donors, not only India. First, we have to fix our priorities — where and how do we want to utilise the Indian assistance. There are deep concerns amongst international donors about implementation of the projects. Without consuming much time, we have to conduct necessary reforms related to project implementation. Unless the government comes forward with concrete priority areas and necessary reforms, the major barriers in infrastructure development will remain in place for years to come. We have to be specific on how to utilise the line of credit (LoC) facility as India has always been asking us to prioritise our requirements. During his visit to India last week, the finance minister hopefully presented a proposal on how we want to utilise the LoC facility.