CCO | CANADIAN COOPERATION OFFICE

The Canadian High Commission in New Delhi conducts Canada’s trade relations with Nepal. Support to trade activities is provided by the CCO in Kathmandu and managed by the Counsellor (Development) and Consul.

Nepal’s relations with Canada are conducted through the Royal Nepali Embassy, Washington. In addition, Nepal has an Honorary Consul in Toronto.

The principal items of export from Canada to Nepal include pharmaceutical products, agricultural and food products, paper and paperboard, electrical machinery, and aluminum.

Canada Nepal trade totaled $13,072,000 in 2003, a slight increase over the previous year. By the end of May 2004, exports from Canada already totaled $10.65 million, an increase of nearly 900% compared to the same period in 2003. Imports were approximately 36% higher than during the same period in 2003, totaling $4.970 million, partly due to increases in woven and knit apparel by 74.56% and 58% respectively. The increase in imports may be attributed to Canada’s duty free access for Least Developed Countries (LDCs).

SERVICES TO DEVELOPMENT PROJECTS

In Nepal, many commercial opportunities for Canadian companies are linked to development projects with funding normally supplied by CIDA, the World Bank, the Asian Development Bank, and other bilateral donors.

Canadian expertise has been noteworthy in the mapping of resources, integrated rural development, health care delivery, transportation (especially aviation and airport expansion), hydropower projects, education, and publishing. A number of Canadian firms are active in the consulting and engineering sectors including N.D. Lea, Matthews International, SNC-Lavalin, Acres International, and the Confederation of Canadian Municipalities.

AVIATION SECTOR

Canada has provided a range of assistance to the aviation sector in Nepal. A project with the Royal Nepal Airline Corporation (RNAC) to upgrade its fleet of Twin Otter Aircraft over a five-year period included project management, procurement, training, and technical/advisory service support.

Acres International has conducted a financial utilization study of the Nepalgunj Hangar, development of a new airport, and improvement of the domestic airports. In addition, Canadian companies have supplied Twin Otter aircraft and spare parts to a number of airlines in Nepal.

TEXTILE AGREEMENT

With growing exports of textiles and garments from Nepal, Canada and Nepal have signed a formal Textile Agreement, which is administered by the Nepal Ministry of Commerce and the Department of Foreign Affairs and International Trade.

Canada’s announcement that most tariffs on goods from LDCs would be eliminated as of January 1, 2003 caused the textile industry in Nepal to see this initiative as an opportunity to increase exports to Canada..

On May 13, 2003, Nepal and Canada signed a Memorandum of Understanding. The MOU allows CCRA access to Nepal to verify that Nepali exporters are complying with the rules of origin and other requirements.

POWER SECTOR

Most of Nepal’s power generation capacity is supplied by hydropower and the remainder of thermal plants because the country is well endowed with vast hydropower resources.

In order to meet increasing demands for power, steps will be taken to consolidate and strengthen the existing generating facilities in order to increase the efficiency of production and distribution.

The private sector has already taken on some medium sized hydropower projects; the Khimti (60MW), Indrawati (5MW), and Upper Bhotekoshi (36MW). Other major hydro electric projects on which preliminary studies have been undertaken include the Karnali/Chisapani (10800 MW), Upper Arun (335 MW), Pancheshwor (6480 MW), Lower Arun (308 MW), and upper Karnali (300 MW).

In 1992, Nepal opened its hydropower sector to international private developers. A few specialized Canadian companies have developed proposals for the Kali Gandaki ‘A’, the Upper Marsyangdi, and the Middle Marsyangdi hydropower projects.

TELECOMMUNICATIONS

The Nepal Telecommunications Corporation (NTC) is the only service provider in the country although private sector participation in the development and operation of the sector is permitted. To facilitate private sector participation and ensure fair competition, the government has established the Nepal Telecommunications Authority, an independent regulatory body.

The telecommunications network is fully digitalized but the waiting list for telephones is in the order of 250,000 lines. In the past five years, the availability and use of mobile phones has greatly increased. As of July 2004, there were over 68,500 post paid mobile phone subscribers and over 11,500 pre-paid mobile phone subscribers.

The NTC plans to use roaming agreements to connect its mobile network to those in India, China, Hong Kong, and other South Asian countries but to date no agreements have been signed.

A World Bank project has been developed to acquire some equipment for the Nepal Ministry of Information and Communication and to establish funds to expand the telecommunications network in rural areas. The Chinese are interested in supplying switching equipment.

TECHNOLOGY PARK

Scheduled to open in July 2004, the Technology Park Project is being constructed in Banepa, 27 km east of Kathmandu for the development and promotion of information technology and services.

The goal of the Technology Park is to establish computer and related high-tech industries to utilize the educated but unemployed manpower existing in the country. The TP is a 100% export oriented scheme for the development and export of computer software using data communication links. The scheme also includes the export of professional services.

The Canadian entrepreneur, Mr. Aditya Jha, is hoping to establish an Institute of Information Technologies in conjunction with this project.

REFORMS TO FOREIGN INVESTMENT POLICY

Financial reforms have begun in Nepal: foreign investors are allowed to hold 100% of the equity, banking and financial sector reforms, and the privatization of public sector companies such as the National Tea Development Corporation. In the latter case, the process has been fraught with difficulties. There has also been a reduction and rationalization of import tariffs.

In the short term, it is likely that most of the funding in these areas will come from international financial institutions or aid programs. Although the market is small, the development of the infrastructure draws on the strengths of many Canadian firms. Canada has a long and positive relationship with Nepal and this will be of considerable benefit to Canadian firms in the market.

CONTACTS FOR CANADIAN COMPANIES AND INVESTORS
Registration of Joint Ventures and Foreign-owned companies in Nepal is carried out through:

Department of Industry, Foreign Investment Section
Tripureswar, Kathmandu, Nepal
Tel: 977-1-4261169, 977-1-4261203

Details of the procedures to register a foreign-owned company are available here or potential investors can contact the Forum of Foreign Investment in Nepal at info@ffin.org.np

Territories/Responsibilities: (India,Bhutan,Nepal)
Office Hours (IST): Mon-Thurs: 0830-1730; Fri: 0830-1300

Federation of Nepalese Chambers of Commerce & Industry
P.O. Box No. 269
Shahid Shukara Milan Marg
Teku, Kathmandu, Nepal
Tel: 977-1-223218, 977-1-225061, 977-1-230407
Fax: 977-1-227322
E-mail: fncci@mos.com.np

Though FNCCI does not have specific informational hand-out on one particular area, books such as “Doing Business With Nepal” and “Nepal & World – A Statistical Profile” are on sale at FNCCI. These books contain information in detail on priority sectors such as carpet, tourism, power and agriculture industry. The books also speak of projects for foreign investors.

Nepal Trade Promotion Centre
Head Office
Trade Promotion Centre
Na Tole, Pulchowk, Lalitpur
P.O. Box 825, Kathmandu, Nepal
Tel: 977-1-525898 / 977-1-532642
Fax: 977-1-525464
E-mail: tpcnep@mos.com.np

Nepal Chamber of Commerce
Chamber Bhawan
P.O. Box 198
Kantipath, Kathmandu, Nepal
Tel: 977-1-222890
Fax: 977-1-229998
E-mail: chamber@wlink.com.np

Please note that there is not an Embassy of Nepal in Canada. You may contact the Royal Nepalese Embassy in Washington, D.C., which has jurisdiction for Canada, for information:

Royal Nepalese Embassy
2131 Leroy Place
NW, Washington, D.C. 20008
Tel: 1-202-667-4550
Fax: 1-202-667-5534

In Canada
The Trade Facilitation Office brings together exporters and Canadian importers through a variety of promotional programs, publications, market studies, and services. It works closely with foreign trade promotion organizations and embassies.

Trade Facilitation Office Canada
56 Sparks Street – Suite 500
Ottawa, Ontario K1P 5A9
Tel: 1-613-233-3925 Fax: 1-613-233-7860
E-mail: tfoc@ottwa.net
Website: http://www.tfoc.ca

Import Tariffs and Procedures
For information on ‘Import Tariffs and Procedures’, please refer to the Canada Customs and Revenue Agency website: http://www.ccra-adrc.gc.ca/vco and click on ‘Client Services’ to obtain information on tariff items; click on ‘Imports’ for procedures; and click on ‘Forms’ for the appropriate documents.