Nepal Government Sets New Standards For Two-Wheeler Assembly Plants

The Ministry of Industry, Commerce and Supplies has set out four mandatory conditions to be followed by companies interested in setting up a motorcycle assembly industry in Nepal. Such criteria have been prescribed for industries following the CKD (Completely Knock Down) policy in assembling two-wheelers.While issuing a notice, the ministry has announced that such industries should ensure certain domestic value addition, create employment, use indigenous raw materials, and assess environmental impact and security. The logic behind these conditions is that the country should benefit from vehicle assembly plants in the areas of domestic value addition and employment after the government provides various tax exemptions for such plants.Accordingly, such industries must ensure domestic value addition of at least 10 percent in the first year and at least 30 percent within five years. The new condition stipulates that 50 people should be directly employed in the first year of opening the industry and the number should be increased to at least 200 by the fifth year. Of this, at least 10 percent of indigenous goods will have to be used by such industries within five years.Similarly, an examination in regard to environmental and safety standards followed by the industry would be done by a committee involving relevant stakeholder agencies such as the Department of Environment, Department of Transport Management and Department of Industry.Through the budget of the current fiscal year, the government had taken a policy to encourage the vehicle assembly industry in Nepal. As of now, Bajaj and TVS companies are assembling two-wheelers in Nepal. The department has stated that about two dozen industries have been registered in the department for the same purpose.AgenciesCover photo for reference only. Photo courtesy: Reuters/Adnan Abidi