KATHMANDU, Dec 30 - The government is reviewing the Industrial Policy-1992 and also amending the Industrial Enterprise Act (IEA) and Foreign Investment and Technology Transfer Act (FITTA) to ensure WTO compatibility in the policy framework and make investment climate friendlier.
"A team constituted recently to review the policy, has started preparatory works," said Govinda Prasad Kusum, Joint Secretary at the Ministry of Industry, Commerce and Supplies. The joint Act of IEA and FITTA would be amended as soon as the policy review is completed, he added.
The amended policy, among others, would address issues like industrial security and Special Economic Zone (SEZ), which were not incorporated in the existing policy. It would also pledge new incentives for the foreign investors to boost the foreign direct investment (FDI).
The changes in incentives for the foreign investors is being worked on as per the demand of the private sector that has been advocating that previously committed incentives were being nullified by the Acts enforced later and existing incentives were not adequate to attract FDI.
"The policy reviewing team will work in co-ordination with Finance Ministry while making arrangements for new incentives," he said.
The amended policy is likely to make the government responsible for providing industrial security. However, the private sector would be asked to contribute to the process, mainly in financing the security force.
"Detailed provisions on the matter, however, will be devised through a separate industrial security work-plan that the MoICS will develop in co-ordination with Defence and Home Ministries later," they added.
The policy would also contain guidelines for establishing Special Economic Zones. "However, we feel that separate SEZ Act will be required to devise strategies and incentives related to it," said Kusum.
Although establishing the SEZ in various parts of the country has been integral part of the government programmes, there is no specific policy and legal framework on it.
"Our thrust while preparing the policy will be on streamlining the FDI in the SEZ logistically and we also will focus on diverting the major chunk of the FDI to export-oriented sectors," said officials.
The amended policy would also propose for declaring ‘industrial zones’ in every urban centre to systematise the set up of industrial centres. "It will also deal with broader investment concerns of Non-resident Nepalis (NRNs) like guaranteeing their investments, although detailed provisions on the matter will be addressed through a separate NRN Act," said Kusum.
Also, the amended policy would lay emphasis on institution building and defining regulatory functions of government agencies along with their promotional activities. It would also define hydropower as an industry in the context of FDI coming to the sector and Nepal’s impending accession to World Trade Organisation (WTO).
"The policy will clearly prioritise the industrial sectors on the basis of their competitive potential and impact on the national economy," said the official.
"A team constituted recently to review the policy, has started preparatory works," said Govinda Prasad Kusum, Joint Secretary at the Ministry of Industry, Commerce and Supplies. The joint Act of IEA and FITTA would be amended as soon as the policy review is completed, he added.
The amended policy, among others, would address issues like industrial security and Special Economic Zone (SEZ), which were not incorporated in the existing policy. It would also pledge new incentives for the foreign investors to boost the foreign direct investment (FDI).
The changes in incentives for the foreign investors is being worked on as per the demand of the private sector that has been advocating that previously committed incentives were being nullified by the Acts enforced later and existing incentives were not adequate to attract FDI.
"The policy reviewing team will work in co-ordination with Finance Ministry while making arrangements for new incentives," he said.
The amended policy is likely to make the government responsible for providing industrial security. However, the private sector would be asked to contribute to the process, mainly in financing the security force.
"Detailed provisions on the matter, however, will be devised through a separate industrial security work-plan that the MoICS will develop in co-ordination with Defence and Home Ministries later," they added.
The policy would also contain guidelines for establishing Special Economic Zones. "However, we feel that separate SEZ Act will be required to devise strategies and incentives related to it," said Kusum.
Although establishing the SEZ in various parts of the country has been integral part of the government programmes, there is no specific policy and legal framework on it.
"Our thrust while preparing the policy will be on streamlining the FDI in the SEZ logistically and we also will focus on diverting the major chunk of the FDI to export-oriented sectors," said officials.
The amended policy would also propose for declaring ‘industrial zones’ in every urban centre to systematise the set up of industrial centres. "It will also deal with broader investment concerns of Non-resident Nepalis (NRNs) like guaranteeing their investments, although detailed provisions on the matter will be addressed through a separate NRN Act," said Kusum.
Also, the amended policy would lay emphasis on institution building and defining regulatory functions of government agencies along with their promotional activities. It would also define hydropower as an industry in the context of FDI coming to the sector and Nepal’s impending accession to World Trade Organisation (WTO).
"The policy will clearly prioritise the industrial sectors on the basis of their competitive potential and impact on the national economy," said the official.
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