The crux of the problem with Nepal’s economic development lies in the proper utilisation of natural resources like air, water, mountains, forests, agricultural products, by-products and human resource.

Lack of proper industrialisation based on development of chemical industries and raw materials is another important aspect of our developmental problem. Nepal has to transform from a commodity-based economy into a manufacturing economy for which industrialisation is a must.

The manufacturing sector can be classified into resource and non-resource based industries. Resource-based chemical industry plays an important role in revitalising and sustaining the long-term economic growth. Thus, the development of chemical industry is very crucial for Nepal’s industrialisation process.

Chemical industry must grow in proportion to the rest of the manufacturing economy and maintain a minimum of 20 per cent in comparison to the country’s total manufacturing output.

Chemical industry produces not only bulk chemicals, but also everyday products like plastics, fibres, rubbers, fertilizers, crop protection chemicals, pharmaceuticals, toiletries cosmetics, soaps, detergents and other sanitation goods. It manufactures these products from minerals, petroleum, natural gas, air, water and some plant sources. All these, except petroleum, are found in Nepal.

Almost all our industries are the terminal consumer-product industries of the big industries of the neighbouring and developed countries.

Our industries are market extensions of their products. All our industries are dependent upon the chemically processed products or chemical raw materials of foreign industries. Industrialisation based on available resources and supported by viable national chemical industry is real industrialisation.

There is no industry which does not use basic chemicals, intermediate chemicals, or fine chemicals. Basic inorganic chemicals are converted into intermediate and fine chemicals, which produce pharmaceuticals, pesticides, dyes, photography chemicals and electronic appliances.

The production of chemicals as raw materials for further conversion or for direct application in industries such as paper glass etc. stands as a central theme of industrialisation.

Several chemicals and materials are needed to fabricate semi-conductors, electronic devices, printed circuit boards and other components of electronic equipment.

Mining is another industry heavily-dependent on chemical processing. Similarly, production of special chemicals for supporting the electronic and food-processing industries is of immense importance. Almost all the consumer-goods industries use basic inorganic chemicals like acids, bases, alkalis, salts and other chemicals.

The Department of Custom’s Foreign Trade Statistics in 1980/81 shows that Nepal imported over Rs. 1.38 billion worth of chemical products, comprising 28 per cent of the total import volume. Currently this volume is growing even further.

Thus, chemicals are a key component of industrial and agricultural development. Growth of chemical industry in Nepal will surely open new vistas in the development process.