Government Announces Major Economic Reforms for Self-Reliance

Kathmandu. The government has announced that it will implement transformative policies in the industrial and trade sectors from the upcoming fiscal year to take Nepal's economy from dependence to self-reliance.

Under the 'New Phase of Economic Reform Series', the government has laid a new strategic foundation of 'Borderless Economy' and 'Weightless Trade' by reducing production costs, simplifying the investment environment, and making Nepali products competitive in the global market.

The government is going to formulate a new 'National Industrial Policy' by contemporarily revising the decade and a half old 'Industrial Policy 2067'. Through this policy, micro, small, medium, and large industries will be classified and different promotional packages will be announced. A 'National Enterprise Promotion Facility' will be established to provide integrated access to finance, technology, and market for startups and small enterprises. Additionally, the 'Nepal Trade Integration Strategy' will be implemented in a new form to balance Nepal's foreign trade, and the list of export-potential goods will be revised.

Investment Express: Permits within 30 Days and 'Nepal Investment Visa'

The government has put forward the Investment Express policy to end the bureaucratic hurdles and delays faced by entrepreneurs.

A legal guarantee will be provided that all processes from business registration to construction permits will be completed within 30 days. The scope of the automatic route will be expanded to facilitate foreign investment. Specifically, 'Nepal Investment Visa' will be provided as a mark of honor and for investment security to foreign investors making large investments above the limit set by the government. This aims to make Nepal an attractive destination for international investment.

New Concepts of Borderless Economy and Weightless Trade

Considering the demands of the modern global economy, the government has adopted 'Borderless Economy' and 'Weightless Trade' as national economic strategies. Under this, emphasis will be given to the export of 'Digital Services' to reduce the hassles of transportation and customs in the export of physical goods.

The export of information technology, software development, and digital services will be promoted as weightless trade. For this, international payment gateways will be legally recognized to facilitate foreign exchange earnings and payments, enabling Nepali youth to sell their services to the global market while staying in Nepal.

Information Technology: Declaration of National Strategic Industry

The government is going to declare the information technology sector as a national strategic industry and give it special priority. Digital parks and high-capacity data centers will be built to make Nepal a global tech hub. Industries exporting software development, AI, cloud services, and cybersecurity will be provided special financial concessions, tax incentives, and facilitation. The government will increase investment in subsidized electricity rates and high-speed internet infrastructure for industries working in the IT sector.

The Startup Nepal portal will be launched to commercialize the business ideas of young entrepreneurs and innovators. Through this portal, arrangements will be made to provide company registration, tax exemptions, and seed capital in a single day. Industrial villages will be expanded in local levels across the country, and green garment villages and special economic zones with shared infrastructure will be operated at full capacity. The government plans to derive multi-dimensional benefits by linking such industrial areas with 'Industrial Tourism'.

Export-Oriented Production: From Herbs to 'Himalayan Water'

Emphasis will be placed on value addition and branding to promote the export of sectors where Nepal has a comparative advantage, such as herbs, tea, coffee, and handicrafts. By establishing herb processing centers, a policy will be adopted to export processed oils and medicines instead of raw herbs. Specifically, infrastructure will be developed to brand Nepali water as 'Himalayan Origin Certified Water' and export it to the global market. Forest-based industries, Ayurvedic medicines, and indigenous wooden furniture industries will be encouraged.

Similarly, legal and institutional reforms will be made to develop the mining and mineral sector as a basis for economic growth. Sustainable use, transparent supply, and proper export arrangements for construction materials such as stones, gravel, and sand will be made. The private sector will be attracted for commercial excavation of iron, limestone, and other mineral mines, which will greatly help in import substitution.

Trade Balance and Revenue Administration Reform

To reduce the trade deficit, the government will discourage the import of luxury goods and facilitate the import of raw materials and capital goods. A fully digital system will be implemented to reduce congestion at customs points and control revenue leakage. The system of Value Added Tax refund will be made fully automated and time-bound. By expanding double taxation avoidance agreements with various countries, Nepali exporters will be made competitive in the international market.

To transform remittances received from foreign employment from consumption to productive sectors, the government will operate a Remittance-Investment Matching Fund. This fund will provide seed capital and technical assistance to mobilize the skills and capital of returning youth in small and medium-sized industries.

To promote Nepal's foreign trade, Nepali missions abroad will be focused on economic diplomacy. A 'Brand Nepal' campaign will be conducted for the global promotion of Nepali goods and services. Diplomatic missions will be given clear mandates to attract foreign investment and identify new markets for Nepali products.