Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Last Published: 4/17/2016
  • Nepal is a landlocked state, which makes market access a challenge.  Surface transport into and out of Nepal can be difficult, and there is only one r eliable road route from India to the Kathmandu Valley. In the past, political unrest and general strikes have disrupted movement of goods in and out of Nepal, although the situation has improved over the past two years. The primary seaport for entry of g oods bound for Nepal is Kolkata, India, about four hundred sixty miles from the Nepal-India border.  With a single international airport in the country, challenges in the air transport sector are also acute.

  • Political instability, including 22 governments in the past 24 years, has created an uncertain environment for foreign and private investment .

  • The Government of Nepal (GON) is open to foreign direct investment, but implementation of its policies is often distorted by bureaucratic delays and inefficiency.  Foreign investors frequently complain about complex and opaque government procedures and a working-level attitude that is more hostile than accommodating.

  • Foreign investors must deal with a non-transparent legal system, where basic legal procedures are neither quick nor routine. The bureaucracy is generally reluctant to accept legal precedents, and businesses are often forced to re-litigate issues that had been previously settled.  Legislation limiting foreign investment in financial, legal, and accounting services has made it difficult for investors to cut through regulatory red tape.

  • U.S. firms and foreign investors have identified corruption as an obstacle to maintaining and expanding direct investment in Nepal. There are frequent allegations of corruption by Nepali government officials in the distribution of permits and approvals, procurement of goods and services, and award of contracts.

  • High customs tariffs imposed on most manufactured products increase the price of U.S. products in the Nepali market. Additionally, cheap consumer goods imported from neighboring countries also present market challenges for U.S. products.

  • Qualified workers are in short supply. Nepal produces technical manpower, but high unemployment and low wages compel many worke rs to seek jobs overseas.  Rigid labor laws make it difficult to terminate employees and militant unions that commonly abrogate negotiated agreements to press new demands make it a challenge to assemble and retain qualified staff.

  • Nepal was struck by major earthquakes in April and May 2015, resulting in great damage to buildings and infrastructure in Kathmandu and the devastation of hundreds of villages and towns.  Roads, schools, power plants, heritage sites, private houses and buildings throughout the affected zone have suffered extensive damage. Landslides and additional aftershocks are anticipated, especially during the monsoon season, which generally runs from late -June through September. The tourism sector -- which is one of the most successful pillars of Nepal’s economy --will likely be hurt due to earthquake-related cancellations.

  • While the earthquakes have caused billions of dollars in losses, the reconstruction work will, at the same time, create opportunities for businesses and investment. Many countries and donors have announced assistance worth hundreds of millions of dollars which will be used to rebuild Nepal's damaged public facilities and infrastructure.  A GON-hosted donor’s pledging conference in June 2015 may result in additional funds for reconstruction efforts.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.

Nepal Trade Development and Promotion