Stakeholders stress greater Nepal-UK business, trade ties

Kathmandu, Feb. 18

Stakeholders have stressed on greater business and trade ties between Nepal and the United Kingdom.

Speaking at the UK-Nepal Business Forum organised by the UK's Department for Business and Trade (DBT) in collaboration with the British Embassy in Kathmandu, they said that as Nepal has implemented significant policy reforms in the past couple of years, it now has predictable trade environment conducive to attract more Foreign Direct Investment (FDI).

Speaking at the first-ever UK-Nepal Business Forum, British Ambassador to Nepal, Rob Fenn, said that the UK has been a trusted and stable partner in Nepal's economic development. "We have been working with the private sector stakeholders in their development through various programmes including Nepal in Business, Green Growth and Sahakarya," he said.

Ambassador Fenn also said that UK wants to be a preferred trade and investment partner at a time when Nepal is graduating to the 'developing country status'.

President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Chandra Prasad Dhakal, stated that the Government of Nepal has amended over 30 laws to make investment easier. 

These reforms provide a stable and welcoming climate for businesses to start, grow, and succeed, he said.

"There are several sectors where the UK businesses can find exciting opportunities. Nepal’s hydropower potential remains largely untapped, offering thousands of megawatts of energy possibilities. With its expertise in renewable energy, the UK is well-positioned to partner in this sector," Dhakal said while also highlighting immense opportunities in tourism and IT sectors.

Birendra Raj Pandey, Senior Vice-President of the Confederation of Nepalese Industries (CNI), stated that the two countries must work towards further enhancing our bilateral investment framework.

"The Double Taxation Avoidance Agreement (DTAA) between Nepal and the UK has been revised twice, yet it remains unsigned. Finalizing this agreement at the earliest will provide greater confidence to British investors and ensure Nepal remains competitive as an investment destination," he said.

According to him, expanding the DTAA beyond the 11 existing countries is vital to attract greater foreign investment and boost investor confidence. 

Likewise, Petra Lenihan, Head of Team for International Strategy and Trade Relations South Asia of the DBT, called for that open and predictable trade environment to attract FDI. According to her, the UK is supporting Nepal in its new industrial strategy, and regulatory reforms especially the targeted reform approaches

Pauline Seenan, Head of Green Growth Group at the FCDO, said the forum aimed at fostering business partnership between the two countries.

"We have been collaborating in democratising access to capital especially of the small and medium enterprises (SMEs) and helping them export their products to the UK," she said.

Dr. Yuba Raj Khatiwada, Economic/Development Advisor to the Prime Minister to Nepal, suggested more activities to promote trade, investment and tourism in the UK and urged for more financial support and investment in infrastructure development and other priority areas.

UK launches SMEs Support Project in Nepal

The UK International Development has launched a new project to support 40 Small and Medium Enterprises (SMEs) in priority sectors to create about 2,700 jobs in three provinces of Nepal. Dhangadhi-Attariya, Pokhara-Bhairahawa and Itahari-Biratnagar industrial corridors are the target areas of the projects.

The GBP 4.5 million (about Rs. 786 million) project is launched at the UK-Nepal Business Forum held in Kathmandu on Tuesday. Application for the grant has also been open along with the launch of the project.

Nepal in Business (NiB) project launched in Madhes, Lumbini and Karnali will support the selected SMEs from agro-processing, light manufacturing, tourism and Information and Communication Technology (ICT). Products included in the priority sectors are MAPs and essential oils, spices, natural fibres, wellness and spiritual tourism, and Information Technology and IT-enabled services export.

"Each selected SME will be eligible to receive result-based matching grants and technical assistance, as informed by individual growth plans," informed the project.

Medium-sized enterprises with 50-250 employees having at least two years of operational experience – backed up by audited documents, and having a solid concept to expand and create 60-70 new jobs are eligible to apply for the grant fund. On the basis of expansion plan and potential job creation, an enterprise could get up to GBP 100,000 in grant support.

However, such enterprise should agree to co-finance to ensure shared ownership and risk.

The NiB is a five-year programme funded by the UK International Development and implemented by DAI Global UK. According to the project, it aims at enhancing productivity and competitiveness of SMEs to create productive jobs through grants and technical assistance, and advancing reforms to address sectoral, trade and business environment barriers through private-sector led and government-engaged approach. 

Published in The Rising Nepal daily on 19 February 2025.