India, Nepal to jointly develop hydel potential

New Delhi, Nov 7: India and Nepal are keen to co-operate in the development of the latter's hydro-electric potential, with several Indian companies expressing a willingness to invest in the development of the country's hydro-electric sector.

''The private sector has been India's engine of growth and Nepal is committed to the growth of this vibrant sector and hopes to forge synergistic partnerships with Indian companies especially in developing its water resources, infrastructure, roads, power and agri-business sectors,'' Nepal Deputy Prime Minister and Minister of Foreign Affairs K P Sharma Oli said at a luncheon meeting organised by the Confederation of Indian Industry (CII) in his honour.

While adding that, ''Hydro-power is of special interest to India to assist in its own development,'' he cited the measures Nepal has taken of late to make it an attractive incentive to private investment.

The measures include a liberalised foreign exchange regime, 100 per cent repatriation of interest, low tariffs, low cost of labour, a business-friendly government and simplified procedures to set up operations in Nepal.

''Goods from Nepal get preferential access to many countries including the European Union,'' he said.

Nepal hopes to boost its annual trade to 5 billion dollars in five years from the present 2 billion dollars. Its geographical proximity to two of Asia's largest nations, India and China, good relations with both, the free trade agreements such as SAFTA that Nepal is a signatory to, and rich natural resources are other factors that makes the country an attractive investment destination, said Mr Oli.

Peace is a pre-requisite for attracting investment, and Nepal has witnessed a decade-long insurgency. ''Now, we expect an end to the armed conflict very shortly. The Maoists are expected to surrender their arms. We expect this to improve the investment climate in Nepal even further,'' he said.

Underlining the importance of hydro-power development, Ambassador of India to Nepal Shivashankar Mukherjee said there was great interest by several Indian companies to enter this sector in Nepal at the Bilateral Power Summit held in Kathmandu in September 2006, and the two countries will shortly set up cross-border transmission highways that will spur a new trade in power.

''The renewal of the Indo-Nepal trade treaty in March 2007 will address non-tariff and para-tariff barriers to imports from Nepal, services, manufacturing, education, health, tourism and IT and ITES,'' Mr Mukherjee said.

Since the agreement was signed in 1996, bilateral trade has grown to 2 billion dollars and 40 per cent of the tourists who visit Nepal by air come from India. There has been a 40 per cent jump in investments from India into Nepal.

CII President R Sheshasayee enumerated the areas where further business collaboration between India and Nepal was possible. These include water resources, infrastructure, human resources development, health, education, tourism, IT and ITES.

''The renewal of the trade treaty will give a fillip to bilateral cooperation,'' he said.

UNI