Nepalese Prime Minister Sher Bahadur Deuba has invited Indian companies to invest in Nepal especially in sectors such as hydropower, manufacturing, tourism, services, infrastructure, and agro-based industries.

“Nepal seeks to build a closer partnership with the Indian private sector. We desire to welcome more Indian investors in Nepal and invite them to be a meaningful part of our economic transformation,” Deuba said at a function organised by Confederation of Indian Industry. Deuba, who held a meeting with Prime Minister Narendra Modi and other senior ministers in New Delhi, added that Kathmandu has put in place policy measures to empower the private sector especially with low tariffs and simplified tax regime.

India, which provides access and transit to Kathmandu to carry out trade, is among the largest sources of foreign investments into Nepal.

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The Birgunj-Raxaul corridor accounts for transit of around two thirds of Nepal's total trade.

One of the key challenges for Deuba is to revive the Covid 19-hit economy.

“India’s investments are huge in Nepal, especially in the hydropower sector. Though China has also started increasing its investments in Nepal, New Delhi must recharter its Kathmandu policy. It needs to continue to invest so that both countries benefit,” an Indian expatriate in Nepal, engaged with a power company, told India Narrative.

According to a study by the Observer Research Foundation (ORF), more than 150 Indian ventures have been operating in Nepal, accounting for over 30 per cent of the country’s total FDI. The study noted that Indian firms have been working in all such areas as manufacturing, banking, insurance, education, telecom, power, tourism and various other sectors. Most of the Indian companies have set up joint ventures with local Nepalese firms.