Tarai unrest impacts cottage, small enterprises

Kathmandu, Aug. 1

The Federation of Nepal Cottage and Small Industries (FNCSI) said that cottage and small industries, which largely depend on limited capital, local markets and daily business transactions, are the hardest hit by unrest, shutdowns, vandalism and disruptions to market activities.

Such situations weaken the confidence of entrepreneurs and adversely affect production and supply chains, it said in a statement on Saturday.

It has expressed serious concern over the recent tense situation, social unrest and violent incidents that began in Dewanganj–Kaptanganj of Sunsari district and spread over several other districts across the Tarai.

Paying tribute to those who lost their lives in incidents, it urged all concerned parties to exercise restraint in order to safeguard peace, social harmony and economic activities.

The FNCSI noted that Nepal is a country with a shared identity built on diverse ethnic communities, languages, religions and cultures, and that social harmony, tolerance and mutual trust are the foundations of national stability and economic prosperity.

It warned that such incidents have direct and long-term negative impacts on cottage and small industries, local production, trade, tourism, employment and the overall economy.

It called on all stakeholders to exercise restraint while preserving social and religious harmony.

Through the statement, the FNCSI also urged the Government of Nepal, local authorities and security agencies to ensure effective law and order in the affected areas, guarantee the safety of businesses and the lives and property of the public, and immediately create an environment in which economic activities can continue without disruption.

Published in The Rising Nepal on 2 August 2026. 

DICL to begin iron production by 2030

Kathmandu, July 21

The Dhaubadi Iron Company Limited (DICL) has moved ahead with an initial plan to conduct mining in at least two of the six blocks identified for Iron Ore Mineralisation Area at Duaubadi in Hupsekot Rural Municipality–05 in Nawalparasi (East). 

Issuing a letter on June 24, the company announced that it awarded the contract for the preparation of Mining Scheme Report for two of its blocks – Pokhari and Ratekhola – to Ekjati Engineering Pvt. Ltd. 

The report will provide an operational blueprint detailing how the company will extract minerals systematically and safely.

According to the preliminary estimates of the Department of Mines and Geology (DMG), Duaubadi mineral area has 100 million tonnes iron ore deposits. The project details published by the Investment Board of Nepal (IBN) for the Investment Summit 2024, estimates that Pokhari has 7.3 million tonnes ore and Ratekhola 18 million tonnes. 

Other blocks include Dhaubadi 32.5 tonnes, Durlunga 14.2 million tonnes, Ramche (North) 15 million tonnes, and Ramche (South) 9.3 million tonnes. 

 According to Dr. Janak Bahadur Chand, CEO of the DICL, the company is in the phase of quality testing or chemical analysis of the sample deposits from the sites. 

"We have sent the sample to labs for the chemical analysis. The analysis will tell us what will be the share of iron ore in the total minerals. It will take 2-4 months," he said. 

Work for the preparation of the Detailed Project Report (DPR) will also begin soon. Eleven consultants have responded to the company's call for the DPR preparation, and the task is supposed to complete in one-and-a-half years. Earlier, in absence of multi-year policy for DPR preparation had created hurdles which is no more a case. 

The company has also performed drilling in multiple locations to extract materials for the testing and analysis. While the drilling was required to go 2200 metres down, the progress is made up to 1512 metres. This drilling has provided the required number and quality of samples, and the company said that further drilling might not be needed. 

At Dhaubadi, iron band thickness is estimated at 15-30 metres and features alternating sequences of hematite-rich bands and slate/phyllite. 

However, since the project is in its initial phase, it has to achieve multiple milestones before it begins industrial projection. The Rs. 51.25 billion (US$ 394.2 million) project (according to 2024 estimates) is supposed to generate US$391 million in revenue and earn net profit of $29 million. 

According to Dr. Chand, if things go as planned, the company will begin production by early 2030. 

The information published the IBN also mentions that Daubadi has reserves of 126.76 million tonnes of Hematite ore. Earlier chemical analysis has shown that it has 17 per cent to 58 per cent total iron (TFe) within mineralisation zone. Meanwhile, the metallurgical test has shown that it has 35 per cent iron on an average. 

Dr. Chand said that apart from iron, the company will produce silica and quartzite as well as gravel needed for the railway projects as the by-products. The plant will also produce about 70 megawatts of electricity. "It is a zero-waste project," he said. The project is expected to substitute about one fourth of the total iron demand in the country which is estimated to exceed 2 million tonnes. 

Meanwhile, the government has reannounced that the government's share in the DICL would be reduced and private sector companies will be invited to run the project in Public-Private-Partnership (PPP) model. Finance Minister Dr. Swarnim Wagle made this announcement in the budget for this year 2026/27.

Published in The Rising Nepal daily on 22 July 2026.         

PM commits to fix organic certification of agro products

Kathmandu, July 23

Prime Minister Balendra Shah has instructed the concerned government authorities to establish a system within Nepal for the certification of organic agricultural products.

In a meeting with the office-bearers of the Organic Association Nepal, the umbrella organisation representing organic agriculture entrepreneurs, at the Prime Minister's Office on Thursday, he responded to their demands including organic certification and subsidy for it.

During the meeting, the association's representatives pointed out that obtaining international certification for organic products is extremely costly, and urged the government to establish, under its oversight, an internationally recognised certification agency in Nepal.

They also noted that the government's subsidy covering up to 75 per cent of the cost of international organic certification had been discontinued, despite the high cost of the certification process.

"They requested that the subsidy be reinstated. Prime Minister Shah expressed support for continuing the subsidy until an internationally recognised certification agency meeting global standards is established in Nepal," read a statement from the Prime Minister's Secretariat.

He also said the government would take the necessary measures to promote organic agriculture while controlling the indiscriminate use of chemical fertilisers and pesticides.

Responding to the request of the entrepreneurs that the government provide subsidies for the production of organic fertilisers, PM Shah instructed the relevant authorities to introduce support grants for private industries and cooperatives engaged in producing organic fertilisers.

He also expressed support for extending to organic fertilisers the same facilities and incentives currently available for chemical fertilisers, whether for their production or purchase, read the statement.

The Prime Minister further noted that export subsidies for organic products had been suspended for the past two years. He said the relevant ministry was preparing the necessary operational procedures to resolve the issue through appropriate legal measures.

The meeting was attended by association's President Deepak Baskota, General Secretary Shanta Baskota Koirala, other association members, Gorkha Tea Estate Chairman Udaya Chapagain, Himalayan Shangrila Tea Factory Chairman Kamal Mainali, and Annapurna Organic Agro Industry Chairman Parshuram Acharya.

Following the meeting, Baskota said that since the discussions were held in positive manner and PM Shah was sincere, the entrepreneurs were hopeful of positive measures in the days to come. 

Published in The Rising Nepal daily on 24 July 2026.         

Reviving The Potential Underperformer

Tea, one of the most competitive products and potential exports of Nepal, has remained an underperformer for the past several decades. While the government and its agencies have remained mostly indifferent to the plight of developing markets abroad, according to tea entrepreneurs, the private sector has also failed in its strategic planning to diversify markets and make access to sophisticated markets for high-end premium products. 

As a result, Nepal's exports are massively concentrated on India. Nepal exported 11.74 million kg of tea of various types in the 11 months of the current fiscal year 2025/26, and 11 million kg of it was exported to the Indian markets alone, according to the statistics published by the Department of Customs. The rest of about three dozen countries, including Russia, China, Australia, Canada, Germany, France, the Czech Republic, Hungary, Iraq, Japan, Korea, Switzerland, the USA, the United Kingdom, and the United Arab Emirates – contributed only 740 kg. These exports drew Rs. 3.51 billion to Nepal. 

Udaya Chapagain, director of Gorkha Tea Estate and former president of the Himalayan Orthodox Tea Producers Association (HOTPA), said that the country currently produces 27 million kg of CTC, and 6.5 million to 7 million kg is orthodox, bringing the total tea production at about 33.5 million kg.

In FY 2024/25 and FY 2023/24, Nepal exported about 14 million kg of tea each year, with massive concentration to India. "As producers, we have failed to identify, develop and utilise the markets for our tea. Nepali farmers are doomed to sell their high-quality products at a lower rate," said Chapagain. 

Markets with extremely high potentials are in the vicinity. While China is the undisputed largest tea consumer in the world, there is high tea consumption in dry countries like Pakistan and Bangladesh. 

Nepal also has potential to export other top consumers like Turkey, Russia and the United Kingdom. Chapagain said that for Nepal, China is, probably, the best market since it also offers better prices compared to the South Asian nations. 

Entrepreneurs, including the orthodox tea producers, had been long lobbying the government to facilitate Nepali tea to China and promoting the product there, but there has been no progress so far. "The government and bureaucracy are not supportive in this initiative. We have submitted suggestions and demands in written form to the government via the HOTPA, but it was well-ignored," said Chapagain.

 Proven quality

In 2022, Nepal won six gold medals at the Second World Black Tea Quality Evaluation Competition organised in China. The winners from Nepal were Tinjur Tea Farmer Cooperative Society, Gorkha Tea Estate, Farmer Tea Processing Industry, Himalayan Shangrila Tea Producers, Siddha Devi Tea Estate and Kanchanjunga Organic Orthodox Tea Industry. But Nepal failed to use the achievement as an opportunity to expand exports to China and elsewhere. 

This failure from the government has helped to create the crisis situation, like export obstruction to India, as the Tea Board of India implemented mandatory testing of all products instead of samples to be eligible to enter its markets. Nepali tea was long stranded in ports and warehouses while the delayed certification resulted in an increased cost of trade, making Nepali tea less competitive. 

According to Chapagain, government here is mostly reactive and is activated when there is a crisis and takes an indifferent stance when the problem is solved. There have been no long-term initiatives or no development of strategies to position Nepali tea in the international markets. "Chinese tea-lovers have liked Nepali tea. We have found that they like speciality in tea as well", he said. "The government should execute economic diplomacy immediately to help us export high-end tea to China."

He also said that similar initiatives should be launched in Pakistan, Bangladesh, Turkey and in major European markets. His personal initiatives have helped to find markets for Nepal-made tea in European countries; if the entrepreneurs get even a small amount of support in promoting their products in those sophisticated markets, it can directly contribute to the farmers' income, entrepreneurs' profits, employment and national economy. Nepali entrepreneurs also initiated the 'Nepal Tea' trademark to implement collective branding and marketing, but since it was coldly received by the government and diplomatic missions, progress is not encouraging. 

Support to the farmers

Chapagain said that the tea promotion at the domestic front should begin with financial and technical support to the tea-producing farmers who are the foundation of the industry. According to him, Nepal should immediately provide subsidies on inputs and technology and subsidised loans to the tea farmers.  It is necessary to enhance their capacity and maintain the expected quality in the product. The Uttaranchal state of India followed a similar strategy, and now it has surpassed Darjeeling, the historical base of quality tea in India, in tea production. 

Gorkha Tea Estate has trained and supported more than 350 farmer families in producing quality organic tea. The company invests about Rs. 4 million in maintaining the quality to obtain and sustain the organic certification from the international regulatory bodies. It is certified by five quality organisations in Asia, Europe and America. 

The second step is to upgrade the Department of Food Technology and Quality Control (DFTQC). Despite an agreement between Nepal and India to upgrade the laboratory at the DFTQC, progress couldn't be made. Obtaining international/global accreditation for the DFTQC could solve half of the problems since the products certified by the domestic lab could be accepted by the international markets and regulatory bodies. Recent export glitches could also have been resolved had the country had an internationally accredited lab. 

Getting organic certification is also equally important for markets like Europe and Japan, said Chapagain, who exports about 40 tonnes of high-end organic tea under the 'Sundarpani' brand to countries like Germany. 

Tea evolution in Nepal

It's been 163 years since the first tea plant was planted in Nepal. Now commercial tea plantations are spread across about 21,000 hectares in 32 districts, with the eastern region becoming a leader in the production of both CTC and orthodox tea. When the then Prime Minister Jung Bahadur Rana brought tea seeds from China in 1863, he ordered his son-in-law, Governor of Ilam Gajraj Singh Thapa, to plant the seeds in Ilam, thus creating the first tea estate in the country – the Ilam Tea Estate. 

The period coincides with the launching of tea production in Darjeeling, across the border in India, where the climate was similar to that of Ilam. Tea connoisseurs say that the taste and flavour of the tea from Ilam and Darjeeling are identical. 

With the dawn of democracy in 1951, the first privately owned Budhkaran Tea Garden was established in the Jhapa district, while the government instituted Nepal Tea Development Corporation (NTDC), a profit-oriented business company, in 1966. For several decades, Nepal lacked a tea processing plant, and green tea leaves had to be sold to the factories in Darjeeling. The first processing plant in Nepal was established only in 1978. During the 1978-1988 decade, NTDC launched several programmes to encourage small farmers to engage in tea cultivation, which ultimately established the tea industry as a profitable enterprise, according to the National Tea and Coffee Development Board (NTCD). 

In 1982, the government declared Jhapa, Dhankuta, Terhathum, Panchthar and Ilam tea zones. While the tea plantation area in Nepal has dropped to 21,000 ha in 2023/24 from about 29,000 ha in 2018/19, production has gone up to 27 million kg from 25.20 million kg.   

Published in The Rising Nepal daily's Friday Supplement on 17 July 2026.         

Agri mechanisation expo in November

Kathmandu, July 19

The International Agricultural Mechanisation Expo 2026 is set to be held in Kathmandu from 20 to 22 November.

It is an agricultural mechanisation exhibition aimed at promoting the modernisation, mechanisation and commercialisation of Nepal's agriculture sector, said the organisers. This year's expo will bear the theme 'Machinery and technology in agriculture: Prosperity for farmers and the nation', and stall bookings opened on July 17.

It is being jointly organised by the Agricultural Infrastructure Development and Agricultural Mechanisation Promotion Centre

Sunita Nhemaphuki, Vice-President of the NAMEA and a central executive member of the Federation of Nepalese Chambers of Commerce and Industry, said the exhibition is expected to bring together more than 100 national and international exhibitors.

More than 200 stalls will be set up, displaying over 2,000 types of modern agricultural tools, machinery, equipment and technologies from around 10 countries.

According to the organisers, members of the association, as well as companies participating under the 'Made in Nepal' and 'Make in Nepal' initiatives, will receive special concessions on stall bookings to encourage domestic production.

The exhibition will feature machinery and technologies related to modern farming, livestock production, aquaculture, floriculture, commercial vegetable cultivation, modern irrigation systems, post-harvest technologies, agricultural processing and marketing, along with improved seed varieties. National and international manufacturers and suppliers have confirmed their participation.

Published in The Rising Nepal daily on 20 July 2026.         

Quest Pharmaceuticals completes 25 years in medicine manufacturing

 Kathmandu, July 11

The government should reconsider continuing subsidies and protection for state-run industries and instead create an environment where private companies can compete freely, said President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Anjan Shrestha.

Speaking at an event organised to mark the 25th anniversary of Quest Pharmaceuticals, Shrestha said private companies were capable of supplying medicines and other products at lower costs than government-owned companies operating with subsidies.

“Let the private sector compete among itself. The private sector can provide products, including medicines, at a lower cost compared to the cost of government production and subsidies,” he said.

Shrestha argued that protected industries had remained financially weak for decades despite continued government support. “Why waste taxpayers’ money? The government should rethink this approach,” he added.

He also said excessive regulation of private businesses had created difficulties for investors. According to him, a delegation of the private sector recently told Prime Minister Balendra Shah that regulatory hurdles had discouraged investment.

“Prime Minister Shah has assured us that there will be regular interaction with the business community through a permanent mechanism, including with major umbrella organisations,” Shrestha said.

Quest Pharmaceuticals has completed 25 years in medicine manufacturing and is preparing to establish an exclusive innovation centre that will work in developing new products.

Speaking at the Golden Jubilee celebration organised on Friday evening in Kathmandu, Executive Director of the company Umesh Lal Shrestha maintained that research and innovation had become the company’s major priorities. The centre is under-construction in Bhaktapur and will contribute to substituting imports of high-end medicines.

He also stressed the need for clear government policies to promote industries, adjust medicine prices and encourage research.

Speaking at the programme, lawmaker Ganesh Parajuli said the fact that Nepali pharmaceutical products had secured around 50 per cent of the domestic market was encouraging.

He said the government should promote and facilitate domestic medicine manufacturers, noting that medicine prices had not increased for the past 11 years despite rising production costs.

“The government will always stand with investors and entrepreneurs. It has given priority to research and innovation,” Parajuli said.

Published in The Rising Nepal daily on 12 July 2026.         

Govt. set to formulate law for trade secrets

Kathmandu, June 21

The government is set to formulate laws to govern trade secrets and geographical indications so that the intellectual property regime in the country can be strengthened.

Publishing the details of the activities for the upcoming Fiscal Year 2026/27, which will begin on July 17, the Ministry of Industry, Commerce and Supplies (MoICS) informed that it will be implemented under the Nepal Trade Integration Strategy (NTIS).

The Department of Industry will conduct interaction programmes on industrial property across seven provinces. It is expected to understand the status of awareness about industrial property and demands from the private sector for the same.  

Currently, copyrights in Nepal are governed by the Copyright Act 2002, which covers literary creations in literature, music, art, computer programmes and dramatic works. Likewise, trademarks, patents and industrial designs are governed by the Patent, Design and Trademark Act, 1965. It covers words, symbols, or logos of businesses.

The private sector has been demanding an update to the Trademark Act, incorporating the latest needs of businesses and entrepreneurs.

The Ministry is also set to conduct informative training for producers, traders and exporters on the existing certification for goods, geographical indications, sustainability, product standards and the implementation methods for voluntary standards.

Likewise, procedures will be formulated, and institutional capacity will be developed for safeguards, anti-dumping and countervailing legislation.

The MoICS also announced a plan for intergenerational transmission of traditional handicraft skills. “Skill development training will be conducted in a cost-sharing partnership with representative associations and organisations of the private sector to produce exportable goods aligned with international market demand through documentation, transfer, and intergenerational transmission of traditional handicraft skills,” read the document.

Likewise, warehouses for the storage of tea and large cardamom (alainchi) will be constructed in a public-private-partnership model, sharing cost with entrepreneurs from the respective sectors.

A programme will be designed and executed for the technical facilitation and infrastructure development to enhance and upgrade small-scale industries to meet food safety standards.

The Industry Ministry is also set to review the achievements of the technology transfer agreements made with various stakeholders and governments in the past. 

Published in The Rising Nepal daily on 22 June 2026.   

Govt. serious about resolving tea export barriers, says FM Khanal

Kathmandu, June 19:  

Minister for Foreign Affairs Shishir Khanal said that the government is seriously concerned about the obstacles emerged in Nepal’s tea exports and that diplomatic dialogue is ongoing with the Indian side on the matter.

“We have already initiated discussions with Indian authorities to resolve the problems seen in Nepal’s tea exports. Concrete diplomatic efforts are being made to find a practical solution to the issue,” he said with the delegation of the Federation of Nepalese Chamber of Commerce and Industry (FNCCI) at the Ministry of Foreign Affairs (MoFA) on Thursday.

According to information received from the Indian side, a resolution is expected soon, he said while noting that discussions are being held with the Indian side for long-term solutions to similar problems affecting the export of tea and other goods.

The FNCCI delegation, led by its president Anjan Shrestha, had urged FM Khanal to take diplomatic initiatives to resolve the existing barriers and complexities in tea exports to India. It drew the attention of the minister to the difficulties faced by Nepal’s tea industry due to new arrangements introduced by the Indian Tea Board.

The FNCCI, in a statement, said on Friday that the recently issued Standard Operating Procedure (SOP) by the Tea Board of India has created further complications for Nepal’s tea exports. It stressed that there are no quality issues with Nepali tea and called for the matter to be raised strongly in bilateral trade mechanisms with the Indian side.

Shrestha said that as the tea sector, which has an annual turnover of around Rs. 12 billion to 14 billion, is in crisis, it would affect the wider economy and the livelihoods of millions. He urged the minister to resolve the issue as soon as possible.

The tensions began with TBI implementing mandatory laboratory testing of Nepal’s all tea consignments from May 1 this year. For the first three weeks, Indian authorities conducted random sampling, and the situation remained relaxed.

But after that, authorities in India collected samples of each consignment and sent them for testing, but no lab reports were issued, leaving the product stranded in Kolkata.

Exhibiting protests, 83 tea factories in Ilam and Jhapa halted operations on Thursday. Likewise, a delegation of the Nepal Tea Producers Association came to Kathmandu to find a solution with the government. More than 1,300 tonnes of tea produced in Nepal is stuck in the warehouses in Nepal and India.

According to the Association, this is a recurring problem and needs to be resolved once and for all.

The FNCCI also emphasised the need to establish an internationally accredited laboratory in Nepal for long-term solutions.

Deputy leader of the Rastriya Swatantra Party parliamentary party Ganesh Parajuli, and Chair of the Industry Committee at the Parliament Rahbar Ansari, who were present on the occasion, said that both short-term and long-term solutions should be sought for such problems.

Likewise, Commerce Secretary Krishna Bahadur Rawat said that the Ministry of Industry, Commerce and Supplies is also engaging through its channels to facilitate the process and expressed optimism that a positive outcome would be reached soon.

 

60,000 workers affected

According to the Nepal Freight Forwarders Association (NEFFA), with around 120 tea industries nationwide, thousands of farmers, and 50,000 to 60,000 workers directly dependent on the sector, the disruption has negatively impacted Nepal’s export trade, foreign currency earnings, and the overall economy.

Statistics from the National Tea and Coffee Development Board showed that Nepal produced 26,983 tonnes of tea, including orthodox, green tea, and other varieties in FY 2024/25.

Expressing serious concern over the recent complications in tea exports, one of Nepal’s key export commodities, and the procedural barriers seen in the Indian market, it said the situation has led to the closure of tea industries, particularly in eastern Nepal, and affected hundreds of tea gardens.

“Processed tea exported from Nepal to India has been held in warehouses for a long time on the pretext of laboratory testing and various technical procedures, disrupting production, distribution, and the entire export chain of the Nepali tea industry,” NEFFA said in a statement on Friday.

The Association noted that a significant share of Nepal’s total tea exports depends on the Indian market, and such barriers have adversely affected not only exporters and entrepreneurs but also the broader economy.

It urged the government to prioritise the issue and initiate immediate diplomatic efforts, including high-level dialogue with relevant Indian authorities, to remove procedural and technical barriers as soon as possible, ensuring smooth, simple, and uninterrupted trade.

Published in The Rising Nepal daily on 20 June 2026.   

Budget outlines series of business, investment reforms

Women entrepreneurs, startups get focus

 

Kathmandu, May 30

Through the budget of the next Fiscal Year 2026/27, the government has expressed its 'full commitment' to industrial innovation.

It has made a plan to invite the private sector to develop and operate industrial areas like Motipur and Nayurdhap in line with the policy of expanding high-quality industrial infrastructure.

In the Panchkhal Special Economic Zone (SEZ), priority will be given to women entrepreneurs. Further concessions will be offered on loan disbursements to women entrepreneurs. "We will make arrangements for a 'Special Economic Administration Zone' where all decisions regarding tax, customs, import, export and investment will be made under a single roof," said Finance Minister Dr. Swarnim Wagle while presenting the budget at the joint session of the Federal Parliament on Friday.

To enhance the competitiveness of productive industries, the government plans to review the demand charge for electricity and provide discounts on electricity tariffs. Industrialists will be able to mortgage structures built on land provided in industrial areas, SEZs, or on lease, for banking purposes.

A plan is also announced to encourage the expansion and growth of industries and businesses that have been unable to operate at full capacity due to lack of capital, by providing 'Business Revival Loans'.

Likewise, the government is set to implement the 'Investment Express' concept by introducing an automated route system within the next three months.

"We will make arrangements for integrated services covering everything from company and industry registration, financial services, tax system participation, and visa applications, including provisions for information access, compliance reporting, and risk-based auditing," read the budget.

A legal provision will be made so that projects approved by the Investment Board do not require further approval from other agencies. Investment visas will be provided for conducting research and studies related to investment in approved projects, and investment and profit repatriation will be facilitated by simplifying share transfer, tax clearance, asset valuation, loan repayment, dividend distribution, and liquidation processes.

 

Expansion of labour-intensive industry

To develop and expand labour-intensive industries with export potential, such as agro-processing, tourism services, and light manufacturing, model Employment-Linked Production Zones will be operated.

A sewage system with treatment plants will be operated in collaboration with the government and the private sector in industrial areas and corridors, using clean energy-based technologies.

Concessional loan facilities will be provided to replace traditional boilers in industrial establishments with electric boilers. An allocation of Rs. 220 million is made to convert 100 industries to electric or bio-briquette-based boilers.

Rs. 650 million is earmarked for industrial infrastructure development, and Rs. 500 million for the design, construction, and maintenance of industrial and mining access roads used by heavy vehicles, with special standards.

The budget also announced to establish a Mining and Minerals Authority for the comprehensive regulation and management of the extraction, production, supply, and use of mineral and construction materials.

"We will expedite the necessary processes for the commercial production of petroleum in Dailekh. We will proceed to reduce the Government of Nepal's share in the Dhaubadi Iron Industry and operate it under a public-private partnership model," said FM Dr. Wagle.

 

Customs duties lowered to seven tiers

The finance minister reduced customs duties on 273 types of raw materials, ensuring that the tariff on industrial raw materials is at least one level lower than that on finished goods. He also limited the existing eleven tiers of customs duties to just seven.

The budget also announced to draft, replace, or amend dozens of acts, regulations, procedures, and directives for investment promotion, economic reforms and smooth delivery of services. A Bill to amend related acts will be presented in Parliament to immediately repeal the 15 laws announced earlier.

Similarly, the government announced to amend company law to facilitate the process of dissolving companies, while ensuring clarity on issues such as conflicts of interest and disclosure of information.

It will enter into foreign investment protection and double taxation avoidance agreements with more countries. "We will amend the Insolvency Act, 2063, to resolve financial problems of consumers as well as micro, small, and medium-sized enterprises. To promote investment, we will draft a limited liability partnership law, which will encourage angel investment to be directed into venture capital and private equity funds," said Dr. Wagle.

 

Simplifying provisions to invest abroad

The government has announced plans to simplify the provisions allowing Nepali citizens to invest abroad. Through amendments to the Industrial Enterprises Act, a new provision will be introduced requiring industries only to notify the Department of Industry regarding matters such as capacity expansion, change of ownership, and capital increases.

Similarly, amendments to the Foreign Investment and Technology Transfer Act will remove the requirement for prior approval from Nepal Rastra Bank for the repatriation of investment, with notification to suffice. Convertible instruments, project-related funding, and other hybrid instruments will be included within the scope of foreign investment.

The requirement for prior approval in the automatic approval process for foreign investment will also be removed. Furthermore, procedures for sending service fees, royalties, and technology-related payments abroad are to be simplified.

Likewise, FM Dr. Wagle announced that legal provisions for the recovery of loans will be made. A law on the protection of intellectual property will be drafted shortly. By analysing past overall economic activities, arrangements will be made to provide credit based on the creditworthiness of individuals and businesses. A separate tribunal is to be established for the speedy resolution of commercial disputes, and the Conciliation Act will also be improved.

To ensure financial access for small and medium-sized industrialists, loans will be guaranteed through a 'first loss recovery' mechanism.

Dr. Wagle also announced that the start-up operating system will be strengthened by tailoring start-ups to identification, skills, market access, and financial inclusion, through profit-linked tax concessions, preferential access to public procurement, digital registration, and regulatory facilitation.

Published in The Rising Nepal daily on 31 May 2026.   

Industry revival sounds exciting but entails significant cost and risk

Kathmandu, Apr. 25

The government's move to bring the large public enterprises (PEs), that have long been closed or running in a poor state, into operation has rekindled debate about its outcome.

The Ministry of Finance (MoF) has begun work to conduct detailed audit and property assessment of seven large industries – Udayapur Cement Industry, Gorkahkali Rubber Industry, Janakpur Cigarette Factory (JCF), Nepal Metal Company (NMC), Butwal Spinning Mills (BSM), Hetauda Textile Factory (HTF) and Nepal Orient Magnesite (NOM).

As planned earlier, the Public Private Partnership (PPP) is prescribed as the operation modality of these industries.

Netra Prasad Subedi, Spokesperson of the Ministry of Industry, Commerce and Supplies (MoICS), informed that the preliminary estimation of the Department of Mines and Geology (DoMG) has shown that the mine-based industries had greater potential. "It means the government might begin the revival of these industries from the mine-based ones such as Udayapur Cement, Orient Magnesite and Nepal Metal," he said.

The MoF had selected a consulting firm S.&S. Associates to assess the status of the four industrial establishments – JCF, BSM, NMC and NOM. Jin and Associates and S. Subedi and Associates will assist S.&S. in the property valuation process.

The move to revive PEs has drawn mixed reactions from the media, experts and private sector stakeholders.

Although the PEs are expanded across six sectors and 11 ministries, the closed or sick ones are from the industry sector and managed by the MoICS. They are labour-intensive and can provide jobs to a large number of people.

Of the seven industries under the revival process, Udayapur Cement Industry was running intermittently until February this year. It was running at loss for the last several years and staff went without pay for as long as nine months.

Meanwhile, as the government initiated the valuation of the property to privatise it or invite private investors under the PPP model, locals protested alleging that the government was selling the public asset too cheap.

According to the experts and industry officials, the company's old coal-based technology has created obstacles in expanding or upgrading the production plant of the once most sought-after brand in cement in the country. The industry has taken Rs. 240 million loan from the MoICS.

However, the revival plan is not a new phenomenon. Industry Minister Mahesh Basnet in 2015 had initiated a process for conditional privatization of Nepal Orient Magnesite, Nepal Metal, BSM, JCF, Birgunj Sugar Mill, Krishi Auzar Karkhana, Hetauda Textile and Gorakhkali Rubber.

The NOM, BSM and Birgunj Sugar Mill had drawn attention of the private sector investors and a few had submitted proposals to operate these indsutries.

Following suit to Basnet, his successor Nabindra Raj Joshi continued with the process.

He had said that the BSM and Birgunj Sugar Factory would be leased out to the private sector while Gorakhkali Rubber Udhyog was planned to be run under the PPP model.

To attract investors to run the industries then, the government had decided not to charge rental payment to the prospective lessees until the factory came into operation. Joshi wanted to move ahead in the revival drive in collaboration with the private sector.

Several Industry and Finance ministers in the last one and a half decades – including Damodar Bhandari in 2025 – had tried to address the problems in the PEs but they failed in achieving any positive results.

 

A case study of mismanagement

The Hetauda Textile Factory can be a case study in terms of sustainability of the industrial-sector PEs. The landmark Chinese-supported industry had begun operations in 1978, three years after its establishment. It was a leading manufacturer of cotton, and other textiles and a supplier of uniforms to the Nepali Army.

However, poor management, political appointments leading to overstaffing and failure to upgrade the technology caused the downfall of the industry following the restoration of democracy in 1990. The first democratic government had initiated the privatization drive as well. The factory began to incur losses in 1997, the government decided to close it in 2000 and liquidation process started in 2003, However, it took one more decade to conclude it. Finally, the government finalised the plans to sell the machinery and transfer land and buildings to Industrial Estate Management Limited (IEML).

After ascending to power in 2008, then CPN (Maoist) tried to revive the industry but the project couldn't actually take off.

Then Industry Minister Nabindra Raj Joshi tried to revive the factory along with Butwal Spinning Mills and strengthen Udayapur and Hetauda cement industries. Then, all three security agencies - Nepali Army (NA), Nepal Police and Armed Police Force – had shown interest to run the industry, if needed, jointly.

Again in 2024, the NA formally proposed to revive the mill with an estimated investment of Rs. 1.93 billion and annual operating cost of Rs. 780 million. It wanted to reoperationalise the industry to manufacture military uniforms. 

 

Broken linkages

However, reviving the HTF is not an easy task which is reflected by the estimated cost proposed by the Army. This is particularly challenging as the existing channels of backward and forward linkages have been damaged. Earlier, there was a cotton production company which supplied raw materials to the BSM and the latter supplied yarn to the textile factory.

But now all three companies are defunct.

And, current discussions and industry revival plans don't include the cotton and spinning enterprises. While the private sector initiations like Reliance Spinning Mills witnessed consistent growth in production and export, state-run BSM met an early demise. Reliance employs about 4,400 people and exports yarn worth Rs. 6-8 billion a year.

MoICS Spokesperson Subedi indicated that the government would adopt an integrated approach in reviving the industries but details are yet not prepared.

Meanwhile, all the equipment and machines of the HTF and BSM are outdated. So, these companies need an installation of new equipment at all levels. In the last two to three decades, the textile industry has undergone a massive technological advancement, said a private sector textile entrepreneur.

"Since the public institutions care less about being competitive, there is a challenge to make the revival sustainable," he said.

However, the PPP modality could be the best solution in case of manufacturing industries. It would be miraculous if the market within the country is guaranteed like in the case of HTF for which the NA said it will produce uniforms of the security agencies. Initial proposal from the security agencies said that the factory would also produce cloth for school uniform.

 

Orient sits on Rs. 5 billion loss

The government had handed over the management of Orient Magnesite in Dolakha to Khetan Group in 2014. The Group had planned to inject Rs. 120 million to bring the sick company back to the normal health. But this move couldn't provide the needed impetus to the industry. It remains shut till date.

The industry was established in 1979 to produce dead burnt magnesite and talc powder, and the production plant had a capacity of 50,000 tonnes a year.

Statistics by the MoF show that accumulated loss of this company has reached Rs. 5.16 billion. This is the second highest loss after the Udayapur Cement's Rs. 6.4 billion. The JCF has Rs. 2.90 billion accumulated loss and BSM about Rs. 2 billion. Financial analysts say that managing this loss is one of the biggest challenges in managing the PEs.

 

Public perceive it positively

People commenting on social media on these developments also said that integrative approach and market assurance could motivate private sector to be the part of management and operation of these sick or defunct industries.

Former CEO of the Investment Board Nepal (IBN) Sushil Bhatta wrote on his social media post that he was eager to see these brown field industrial projects structured in PPP model and transacted. "Good to see the essence, need and importance of PPP modality being realised," he said.

On several occasions, entrepreneurs and private sector leaders welcomed the move stating that it will create employment and utilise domestic raw materials.

Talking to The Rising Nepal, President of the Nepal Textile Association of Nepal, Shailendra Lal Pradhan, said that establishing or reviving the industry is a good move as it helps to meet the domestic demand and substitute exports in the first phase.

But there should be market assurance and facilitation in technology transfer if the government wants private investors onboard of these industries, said Pradhan. According to him, it may attract investors due to the infrastructure of the industry. Currently, industrialists are finding it very hard to get land for the industry so the physical infrastructure and land of the sick industry can be an attractive advantage for the private investors.

However, several individuals were critical of the government reviving or running the Janakpur Cigarette Factory with a few suggesting the facilities there for other purposes like medical or education.

Such a large industrial establishment can be converted into agro-processing industry, exhibition centre, medical college or international level convention centre. China has successfully converted mammoth manufacturing industries into exhibition venues and sports centres.

PEs in six sectors

The government operates enterprises in industry (10), commerce (4), service (11), social (5), utility service (5) and financial (10) sectors. Of them, 14 are managed by the MoICS, 10 by MoF, five by Physical Infrastructure Ministry, three each by Energy Ministry, Communication Ministry and Tourism Ministry, two each by Agriculture and Forest ministries, and one each by Education, Water Supply and Urban Development ministries.

Government receives a major chunk of profits from Nepal Oil Corporation and Nepal Telecommunication Company Limited. Currently, 28 PEs are in existence, of which 15 are running in loss. Interestingly, the government is earning rental from the land and building of the Janakpur Cigarette Factory.

Share structure of industries under revival process

S.N.	Name of Institution	Government	Private Sector
1	Hetauda Cement Industries Ltd.	100	0
2	Janakpur Cigarette Factory Ltd.	100	0
3	Udayapur Cement Industries Ltd.	100	0
4	Nepal Orient Magnesite Pvt. Ltd.	83.33	16.67
5	Butwal Spinning Mills Ltd.	59.74	40.26
6	Nepal Metal Company Ltd.	71.31	28.69
7	Hetauda Textile Factory	-	-
	Total	95.61	4.39

Source: MoF, 2025.

 In its annual report of the PEs for Fiscal Year 2024/25, the MoF has recommended that the State's investment in the closed or sick industries like Janakpur Cigarette Factory, Nepal Engineering Consultancy, National Construction Company, Nepal Metal Company, HTF, Nepal Orient Magnesite should be managed with appropriate alternative, following the assessment of property and liability.

Likewise, investment should be effectively managed in the company that have long been witnessing losses, such as Hetauda Cement, Udayapur Cement and Nepal Drugs Limited.

The Finance Ministry also recommended converting the PEs to public limited companies. Selling or leasing out the properties (except land) to the private sector on the basis of the nature of the PE and market competition is also an option.  

Published in The Rising Nepal daily on 26 April 2026.         

SY Panel begins installation of new UPVC plant

Kathmandu, Apr. 15

SY Panel Nepal, a subsidiary of SY Company Limited, has laid the foundation stone for a new UPVC industry in Ratnanagar Municipality–14, Pithuwa, in Chitwan.

The foundation was jointly laid on Monday by Ratnanagar Mayor Pralhad Sapkota and the company’s CEO Hong Sung-bu during a formal ceremony.

Speaking at the event, Mayor Sapkota said the municipality would facilitate investors willing to establish industries in the area. "While local authorities would provide necessary support, priority in employment should be given to local residents," he added.

Once operational, the plant is expected to produce UPVC door and window profiles and other construction materials using advanced technology. According to the company, UPVC products are considered a durable, lightweight and environmentally-friendly alternative to traditional wood and metal materials, and the decision to establish the factory was based on growing market demand in the country.

Hong said the factory represents a combination of Korean technology and Nepal’s workforce, adding that it would serve as a centre for industrial development. He said that the project would help strengthen economic cooperation between Korea and Nepal and contribute to the development of Chitwan.

He also noted that Nepal is entering a phase of political stability and economic opportunity, and said the company aims to support job creation and technology transfer in collaboration with the government.

The company recently issued an initial public offering (IPO), and said the funds raised are being utilised for the establishment of the uPVC plant. The estimated cost of the project is Rs. 560 million.

The company aims to complete construction within six months and begin production thereafter. It expects that domestic production of such materials will reduce dependence on imports.

SY Panel Nepal has been producing panel products in Ratnanagar since 2017 and plans to expand its industrial presence and network.

Published in The Rising Nepal daily on 16 April 2026.       

Bardaghat SME Village seen as growth engine

Kathmandu, Feb. 26

Investors have expressed confidence that the Bardaghat SME Village will contribute to the economic development of Nawalparasi.

Speaking at an interaction programme organised by the Confederation of Nepalese Industries (CNI), with support from the Bardaghat Chamber of Commerce and Industry (BCCI), Bardaghat Industry and Trade Association, and the CNI Youth Entrepreneurs Forum in Bardadhat on Thursday, they said it would help in creating employment and using local raw materials.

Acting President of the CNI, Nirvana Chaudhary, said the organisation has remained committed to promoting entrepreneurship and that the Bardaghat SME Village should be developed as a pilot project and model industrial village. He stated that the initiative could help promote small and medium-sized enterprises in the area.

Chaudhary also noted that industrial villages are necessary as a significant portion of investment is required for land acquisition when establishing industries. He said the presence of large industries and road infrastructure in Nawalparasi has created conditions favourable for the development of small and medium enterprises.

Former President of the Federation of Nepalese Chambers of Commerce and Industry, Shekhar Golchha, noted that unemployment remains a major issue in Nepal and that many young people have gone abroad for work, adding that industrial development is necessary to create jobs and support economic growth.

He said industrial villages could support industrialisation and added that the Golchha Group is positive about bringing industries to the area.

Likewise, Former CNI President Vishnu Kumar Agarwal said the contribution of manufacturing industries to gross domestic product has declined to about five per cent. He said efforts are needed to increase the sector’s share and referred to industrial parks in Bangladesh and India as examples. He also said there are plans to expand the MAW Skill Academy to the area, which already operates in Kathmandu and Janakpur.

CNI Vice-President Rohit Gupta said he was able to establish the Kajaria Tiles industry in Bardaghat within a year due to local support. He stressed the need to develop the SME Village alongside large industries.

President of the BCCI, Lekh Nath Neupane, said industrial villages are essential to promote small industries. Similarly, Bardaghat Industry and Trade Association Vice-President Lilahari Paudel said the area’s proximity to the Indian border facilitates the import of raw materials and export of finished goods.

CNI Lumbini Province President Ejaz Alam said the area’s infrastructure and proximity to Rupandehi make it suitable for industrial expansion.

Similarly, CEO of Nabil Bank, Manoj Gyawali, said the presence of more than 250 financial institutions has improved access to finance and that the bank has been supporting entrepreneurship and skills development.

Chair of the CNI Youth Entrepreneurs Forum Lumbini, Rajan Kasaju, said young people are starting businesses in Nepal and stressed the need for policies to encourage entrepreneurship and reduce outward migration.

 Published in The Rising Nepal daily on 27 February 2026.     

Green Home opens first childcare centre in Sudurpaschim

Kathmandu, Feb. 14

At a time when many female workers employed in factories and industries are leaving their jobs, citing their inability to find time to care for their children while industries and factories have also been reluctant to hire women who have young children, an industry in Kailali has found an alternative solution to address both problems.

Dinesh Lamsal, General Secretary of the Kailali Chamber of Commerce and Industry, has established a childcare centre, primary treatment facility, and breastfeeding room within the premises of Green Home Pvt. Ltd., which he founded in Lalpur, Godawari-6, Kailali.

The facility was inaugurated at a programme by the Treasurer of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Bharat Raj Acharya on Friday.

Acharya said that this was the first time in Sudurpashchim Province that a childcare centre, primary treatment facility, and breastfeeding room had been established within an industrial structure.

“The biggest challenge for female workers was the obligation to care for their children while working. The industry has now addressed this issue,” he said. “This practice, which has begun with this industry for the first time in Sudurpashchim Province, should be adopted by all industries.”

Built with an investment of around Rs. 1 million, the facility allows female employees with children to care for them at regular intervals. The centre is equipped with essential facilities for nutritious food and play materials for children.

Likewise, Lamsal said the childcare centre was established after experienced female workers began leaving their jobs due to childcare difficulties, with the aim of providing a supportive environment for their children within the workplace.

According to him, the industry currently employs 92 female and 32 male workers. The female workers, who earn around Rs. 20,000 per month on average, have expressed enthusiasm at being able to care for their children at their workplace.

Hari Paudel, Assistant Director of FNCCI, said that the childcare centre would support children’s learning through play.

The industry has created physical infrastructure for the childcare centre, breastfeeding room, and dressing room, while FNCCI provided the necessary internal equipment with financial and technical support from the International Labour Organization (ILO) Nepal.

The facility provides arrangements for children under four years of age to play, learn, and eat, and the industry has stated that a facilitator will also be appointed to support them.

FNCCI Sudurpashchim Vice-President Anil Kumar Bhojaniya and ILO's National Programme Coordinator Tara Kandel said that this initiative launched in Kailali is necessary and should be replicated in industries across the region.  

Published in The Rising Nepal daily on 15 February 2026.    

Industry-Academia-Govt framework proposed

Kathmandu, Feb. 8

Nepal-India Chamber of Commerce and Industry (NICCI) and the University of Nepal (UNepal) proposed the government to form Industry-Academia-Government (IAG) Framework, a permanent structure to create a conducive business environment.

At a high-level strategic consultative meeting today at the Office of the Prime Minister and Council of Ministers (OPMCM), Singha Durbar, NICCI and UNepal proposed Industry-Academia-Government (IAG) Framework, a national initiative aimed at strengthening evidence-based policymaking, industry competitiveness, and academic engagement in Nepal’s development agenda.

NICCI informed in a statement on Sunday that the meeting brought together senior government officials led by Chief Secretary Suman Raj Aryal, along with secretaries from key ministries, representatives from NICCI and the leadership of the UNepal.

Chair of the Executive Committee of the Board of Trustees Lal Krishna KC presented the draft IAG Framework, on the occasion. The concept proposes a structured national platform to bridge long-standing gaps between policy priorities, industry needs, and academic research.

"UNepal and NICCI are the initiators of the IAG framework and have asked the government to join hands, but it will have a larger platform of all the private sector organizations and universities and think tanks soon," read the statement.  

The proposed framework positions government as a strategic facilitator, industry as a driver of market relevance, and academia as an integrative, evidence-generating partner. The IAG model emphasizes execution-oriented collaboration, data-driven design, and long-term institutionalization rather than one-off events or short-term projects.

NICCI also informed that the meeting concluded with a shared commitment to building a sustained, institutional collaboration platform that aligns policy, industry, and knowledge systems in service of Nepal’s long-term economic transformation. 

Likewise, discussions further stressed inclusivity, alignment with national interest, and improved data integration across government, academia, and the private sector. Opportunities in energy efficiency, power trade, and emerging areas such as green hydrogen were noted as potential areas of collaboration.

 Vice chancellor Dr. Arjun Karki, Registrar Dr. Surya Raj Acharya, and representatives of University of Nepal highlighted their commitment to introducing industry-relevant academic programmes, including micro-credential initiatives, and strengthening the role of academia as an independent knowledge partner serving national priorities.

Chief Secretary Aryal linked the initiative to the government’s broader reform and re-governance efforts, encouraging stakeholders to expand the framework’s reach and impact.

Published in The Rising Nepal daily on 9 February 2026.  

DJPL to invest Rs. 4.7 billion in Chitwan

Kathmandu, Feb. 4

Deurali-Janta Pharmaceuticals Pvt. Ltd. is set to diversify its production and increase its capacity with a new manufacturing plant in Chitwan.

“The new international standard production plant will be installed for Rs 4.75 billion, with the aim of import substitution, export readiness, technology transfer and creating employment,” Hari Bhakta Sharma, Founder and Executive Director of the company, said at a  press meet organised to mark the 35^th year of the company, on Tuesday.

The project would be developed within two years.

Sharma and his team have seen a huge potential in the Nepali pharmaceutical industry in production, export and competitive capacity.

However, he said that the country still lacks an industry-friendly policy. The government should support the entrepreneurs in acquiring land, the business registration and licensing process, and technology transfer.

According to him, the Department of Drugs has a provision for obtaining a separate license for each medicine production, which creates additional hassles in the production and marketing of the products.

Deurali-Janta aims to conduct a business worth around Rs. 2.6 billion this year.

“Deurali–Janata Pharmaceuticals has been a leader in Nepal’s pharmaceutical industry for the past 35 years. The company imports advanced technology to produce essential medicines locally, and it has firmly established itself as a pioneer in Nepal’s pharmaceutical sector,” said Ayush Bhakta Poudel, Director of the company.

According to him, with a focus on reducing reliance on imported medicines, the company’s goal has always been to make the country self-sufficient in pharmaceutical production. It has successfully developed and produced hundreds of medicines in Nepal, and the company’s success story is a testament to its commitment and growth in the pharmaceutical industry.

Deurali-Janta is producing 296 types of essential life-saving medicines, including capsules, tablets, liquids, ointments, dry powders, and other forms of medicinewith the application of cutting-edge technologies.

The products are rigorously researched, produced, and quality-tested using modern technologies and equipment, meeting international standards, said Poudel. The company has employed 675 individuals. 

Published in The Rising Nepal daily on 5 February 2026.