Sen is regarded as having an in-depth knowledge about the investment prospects in South Asian countries including Nepal.
He actively worked for the formation of CII Joint Task Forces, which are high-level forums of business leaders in the region, with its institutional partners in Bangladesh, Maldives, Nepal and Sri Lanka.
He strongly believes that political instability and policy stability are the cornerstone for a conducive environment for foreign investments.
Republica’s Prabhakar Ghimire caught up with him to discuss in detail about the opportunities and challenges in bringing in foreign investments to Nepal.
You are in Nepal to explore business opportunities at a time when investors are saying investment climate is not conducive here? How do you rate investment prospects in Nepal?
We are very committed to working with Nepal by participating in development works, which is also the commitment of CII. It is natural that sometimes business climate is good, sometimes bad. However, we have been coming to Nepal every year to seek opportunities for doing business here. Out of the 12 members of the current CII delegation, nine have come for the first time to Nepal. This means new companies are interested to invest in Nepal. Though some of our companies operating in Nepal are facing difficulties due to different reasons, I am fully hopeful that investment environment will improve. So, as the largest investor in Nepal, we are also making efforts to direct some of the Indian investments in different parts of the world to Nepal.
What are the major areas that have promises to lure foreign investments to Nepal in coming days?
Nepal has a widening balance of payment deficit with India due to low exports compared to growing imports. It has always been a sensitive issue. The most promising area that can narrow down Nepal’s yawning trade-deficit with India is undoubtedly hydropower. Only a negligible amount of hydropower potential has been harnessed in Nepal so far. Nepal can export huge amount of electricity to power-hungry India.
Other areas that Nepal can establish is agro-based industry that can promote high-value agro products like those made from vegetables, fruits, dry flowers, and medicinal herbs. Growing middle-class in India can be the major consumers of these products. Apart from that, Nepal also has the potential to become the health capital of South Asia. Beautiful climatic conditions can offer better treatment for those who would come to India for the same reason. Nepal can also be more accessible for patients from neighboring countries. So, we have seen great opportunity to develop the health sector by investing in hospitals and medical colleges. Besides, prospects for investment in tourism and education sector is also very high.
You have talked about Indian joint-ventures facing difficulties in Nepal. What are the major obstacles for foreign investors in Nepal?
India is the largest source of foreign investments in Nepal. However, we have not seen any new significant investment in Nepal from India for last five years. Our ambassador has also expressed concerns about it. Though media has a crucial role in forming opinion among investors, I don’t think much positive news are coming in the media to encourage investors in Nepal. Prospect of foreign investment depends on government’s policies, priorities and stability. What Nepal need to do is to lay clear-cut policies conducive to investors, ensure good governance and stability and maintain peace and security. Frequent labor unrest, weak infrastructural base, and power-shortage are major difficulties that foreign investors in Nepal are facing. Our best ambassadors are the companies who have already invested in Nepal. Future investment depends on the experience of the existing companies operating in Nepal. So, Nepal has to resolve the problems these companies are facing as soon as possible.
Can you give an estimate as to how much Indian investment can be brought to Nepal over say next five years if the investment-friendly environment is restored in Nepal?
It is very difficult to estimate about the upcoming and potential investments to flow into Nepal within the specific period as it depends on various factors. Some investments can takes long time even in the situation when investors feel comfortable to invest. Investors can decide any time to put money in Nepal if they feel appropriate and see prospects. We are making efforts to lure big companies from India to invest in Nepal’s tourism sector.
Your delegation met high-level Nepali officials including Deputy Prime Minister and Commerce Minister. What response did you get from them to ensure investment-friendly environment in Nepal?
We found Deputy Prime Minister and Commerce Minister and other high-ranking officials sincerely committed to lure more investments into the country. We talked about harnessing huge potentials in hydropower and some other sectors. They are also committed to resolving the problems Indian companies operating in Nepal are facing. We are encouraged by the assurance given by Nepali officials.
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