WT/TPR/S/257/Rev.1 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIMES 
(1) THE INSTITUTIONAL FRAMEWORK  
1. Internal conflict in Nepal between 1996 and 2006 ended with political  parties and Maoists 
agreeing a comprehensive peace agreement in N ovember 2006.  Nepal was declared a Federal 
Republic in May 2008.  Under the Interim Constitution, adopted on 15 January 2007, the President is 
the head of State1, and the Prime Minister is the head of Government.  Executive power is exercised 
by the Prime Minister and the Council of Mini sters (Cabinet).  The Interim Constitution also 
established a 330-seat Interim Parliament, which w as replaced by an elected 601-seat unicameral 
Constituent Assembly in April 2008.2  The Constituent Assembly acts as Nepal's legislature 
(Parliament) and is responsible for writing a new Constitution. 
2. Nepal's judiciary is legally separated from the executive and legislative branches.  Under the 
Interim Constitution, the President appoints th e Chief Justice on the recommendation of the 
Constitutional Council, and the Chief Justice a ppoints other judges on the recommendation of the 
Judicial Council.  All lower court decisions, includi ng acquittals, are subject to appeal.  The Supreme 
Court is the court of last appeal. 
3. Most policies, including trade policies, are formulated and implemented by means of acts 
(laws).  In general, bills are presented by the Gove rnment to the Parliament for adoption.  All trade 
measures, as well as acts, rules, and regulations  of general application are published in Nepal's 
Gazette  (Nepal Rajpatra ), including multilateral agreements or tr eaties to which Nepal is a party.  
Most judgements of the Supreme Court are also published in the Nepal Law Journal .  Acts enter into 
force on the date of their publication unless another date is specified. 
4. In terms of hierarchy, the Interim Constitution is followed by acts and implementing 
documents such as rules, regulations, and government al or administrative notifications, circulars and 
directives.  International agreements in force, including the WTO Agreements, concluded and ratified 
by Nepal, carry the force of law.  Under the Ne pal Treaties Act, 2047 (1990), in case of divergence 
between the provisions of Nepalese law and provisions of an  international treaty to which Nepal is a 
party, the provision of the treaty shall apply to the extent of the divergence. 
(2) TRADE POLICY FORMULATION AND IMPLEMENTATION  
5. Responsibility for trade policy formulation and implementation lies with the Ministry of 
Commerce and Supplies (MoCS), in coordination w ith other ministries and trade-related bodies, 
including the Ministry of Industry, Ministry of Finance, Ministry of Tourism and Civil Aviation, 
Ministry of Agriculture and Cooperatives, Ministry  of Information and Communication, Ministry of 
Labour and Transport Management, Ministry of Ener gy, Ministry of Forests and Soil Conservation, 
Ministry of Health and Population, Ministry of E ducation, the National Planning Commission, and the 
Central Bank (Nepal Rastra Bank).  The private sector provides inputs to trade policy formulation by communicating its views either directly to the MoCS  or through the Federati on of Nepalese Chambers 
of Commerce and Industry (FNCCI) and Nepal Chamber of Commerce. 
6. Nepal's main trade-related laws and regulati ons are presented in Table II.1.  The foreign 
investment framework is composed mainly of the Industrial Enterprises Act of 1992 (as amended) and 
                                                      
1 The term of the President extends until the new Constitution is promulgated.  The President and Vice 
President are elected by the Constituent Assembly. 
2 The Constituent Assembly is composed of 240 me mbers elected by direct popular vote, 335 by 
proportional representation, and 26 appointed by the Council of Ministers. Nepal WT/TPR/S/257/Rev.1 
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the Foreign Investment and Technology Transf er Act of 1992 (as amended), as well as the 
One-Window Policy (section (5) below). 
Table II.1 
Main trade-related legislation 
Issue 
Customs 
 Customs Act (2007) 
 Customs Rules (2007) 
Export and import licensing 
 Export and Import Control Act (1957, as amended in 2006) 
 Export and Import Rules (1978) 
Technical barriers to trade 
 Nepal Standards (Certification Mark) Act (1980, as amended)  
 Nepal Standards (Certification Mark ) Regulations (1982, as amended) 
 Drugs Act, (1978, as amended in 2000) 
 Drug Registration Rules, (1981, as amended in 2001) 
Sanitary and phytosa nitary measures 
 Nepal Seeds Act, 2045 (1988) 
 The Seeds Regulation, 2054 (1997) 
 Plant Protection Act, 2064 (2007) 
 Plants Protection Rules, 2066 (2010) 
 The Food Act, 2023 (1966) 
 Food Regulation, 2027 (1970) 
 Feed Act (Animal Concentrate), 2023 (1966) 
Animal Health and Livest ock Services Act (1998) 
Competition policies  
 Competition Promotion and Ma rket Protection Act (2007) 
Competition Promotion and Market  Protection Re gulation (2007) 
 Consumer Protection Act (1998) 
Consumer Protection Regulation (2000) 
Privatization  
 Privatization Act, 2050 (1993) 
Investment regime  
 Foreign Investment and Technology Transfer Act (1992, as amended) 
 Industrial Enterprises Act (1992, as amended) 
Government procurement  
 Public Procurement Act (2007) 
 Public Procurement Rules (2007) 
Trade-related intellectual property rights   
 Patent, Design and Trade Mark Act (1965) 
 Copyright Act (2002) 
 Copyright Regulations (2004) 
 
Source:  Information provided by the Nepalese authorities. 
 
(3) POLICY OBJECTIVES  
7. Poverty alleviation and improvement in the livi ng standard of its people have remained the 
key policy objectives in Nepal's national developmen t plans since they were first launched in 1956.  
The 2009 Trade Policy, which is being implemente d through the Nepal Trade Integration Strategy 
(NTIS) 2010 adopted on 24 June 2010, recognizes the effective role of trade in achieving sustainable 
and inclusive economic growth, and in transformi ng a traditional agrarian economy into a modern 
economy.  Trade is to be supported by various mean s, including transit and transport infrastructure, a WT/TPR/S/257/Rev.1 Trade Policy Review 
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development-friendly investment climate, R&D,  introduction of new technology in production, 
enhancement of productive capacities, and effe ctive mobilization of overseas development 
assistance.3  
8. Under the NTIS, building a successful, competitive export sector in Nepal will require 
five major challenges to be addressed:  (i) ensuri ng proper market access, for which problems related 
to tariff and non-tariff barriers (NTBs) will need to be solved, including SPS and related regulatory 
and business environment issues that may affect Nepal ese exports in importing markets;  (ii) building 
domestic support institutions that can create a more  friendly business environm ent and help Nepalese 
exporters address the challenges of the NTBs;  (iii)  taking steps to strengthen the supply capacity of 
exporters, especially in sectors where they may have a competitive advantage;  (iv) development of 
basic infrastructure, such as road s, railways, energy, and information and communications technology 
(ICT);  and (v) mobilizing overseas development assi stance (ODA) to assist in developing capacity. 
9. The NTIS 2010 identifies four objectives to r espond to these capacity development challenges 
for the coming years:  strengthen trade negotiations (especially bilateral) to ensure proper market 
access for 19 priority economic activities with export potential4;  strengthen the technical capacity of 
domestic agencies dealing with NTBs and ot her business environment supportive institutions5;  
strengthen the export capacity  of goods and services6;  and strengthen Nepal's capacity to benefit from 
trade-related technical assistance and aid for trade (section (6) below).  
10. The 19 priority export potential activities are ca rdamom, ginger, honey, lentils, tea, noodles, 
medicinal herbs/essential oils, handmade paper, s ilver jewellery, iron and steel, pashmina, wool 
products, tourism, labour services, information tec hnology and business process outsourcing services, 
health services, education, engineering, and hydr o-electricity.  Other potential export activities are 
sugar, coffee, dairy products , cement, and transformers.7 
11. Nepal recognizes the importance of trade and inv estment liberalization to achieve its policy 
objectives.  It is in favour of trade liberaliza tion through the multilateral framework.  Nepal also 
believes that its WTO membership sends a strong me ssage to potential foreign investors about its 
commitment to a rules-based system.  At the same time, Nepal participates in the South Asia Free 
Trade Area (SAFTA) Agreement, the Bay of Beng al Initiative for Multi-Sectoral Technical and 
Economic Cooperation (BIMSTEC), and in  various bilateral trade agreements (section (4)(ii) below).  
Nepal is of the opinion that regionalization would he lp rather than hinder the globalization of the 
world economy. 
                                                      
3 Ministry of Commerce and Supplies (2010). 
4 According to the NTIS, bilateral market access negotiations are likely to be required, though 
negotiations with and within regional groupings are also likely to play an important role. 
5 Building a competitive, exportable supply capacity of goods and services from Nepal has become 
increasingly dependent upon the ability of Nepalese produ cers to meet the NTB market-entry requirements of 
importing countries.  It requires putting in place a supportiv e domestic infrastructure in areas such as technical 
standards, SPS, trade facilitation, investment envi ronment, IPRs, and domestic service regulations. 
6 Doing so may require an in-depth analysis of the 19 priority activities identified and ensuring that 
they benefit from specific su pportive measures.  This, in turn, sugges ts that the Government's and private 
sector's initial focus under the first two objectives will also  need to target the areas of trade negotiations, trade-
related policy reform, or for agencies dealing with NTBs to supporting those activities. 
7 Ministry of Commerce and Supplies (2010). Nepal WT/TPR/S/257/Rev.1 
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(4) TRADE AGREEMENTS  
(i) Participation in the WTO 
12. Nepal deposited its instrument of ratif ication of accession and became the 147th Member of 
the WTO on 23 April 2004.8  Nepal was the first least developed country (LDC) to join the WTO 
through the accession process.9  As part of its accession commitme nts, Nepal bound 99.4% of its tariff 
lines (Chapter III(1)(iii)(b)), made extensive comm itments under the GATS and signed the Reference 
Paper on Basic Telecommunications (Chapter IV(3)(iii)). 
13. Nepal has not been involved in any dispute under the WTO Dispute Settlement Mechanism, 
either directly or as a third party.  As an LDC,  Nepal has utilized the transitional periods allowed 
under various WTO Agreements;  for example, it is  not required to notify its legislation under the 
WTO TRIPS Agreement until 1 July 2013 (Chapter III(3)(viii)).10  Nepal grants at least 
most-favoured-nation (MFN) treatment to all its trading partners. 
14. Since acceding to the WTO, Nepal has made ve ry few notifications (31 notifications were 
outstanding in March 2011).11  The authorities have requested help from the Secretariat in this regard. 
15. Nepal looks to the WTO "not only as a vehicle for promoting global trade but also as an 
institution that ensures fair, just and inclusive tradi ng regime where the concerns and aspirations of all 
the countries, small and big, rich and poor, are well heard and listened".12  Nepal is participating in the 
DDA negotiations;  it is seeking substantive mark et-access opportunities for its products, and that all 
LDCs be provided with a binding commitment to duty-free and quota-free market access for all 
products, with simple and flexible rules of origin.13  Similarly, Nepal is requesting commitments from 
other Members on the movement of semi-skilled and unskilled labour under GATS mode 4 to give 
effect to LDCs modalities.  
16. Nepal participates actively in the Informal  LDC Consultative Group in the WTO.  The 
authorities believe that they made extensive commitments during their accession process and are 
calling for additional flexibilities to be granted to the LDCs in the DDA.  Nepal believes that all 
Members stand to make substantial gains from the D DA and strongly supports any efforts to bring the 
negotiations to a successful conclusion as soon as possible, with a clear priority of achieving the early 
harvests for the LDCs (duty-free and quota-free ma rket access for all products and services waiver). 
(ii) Preferential trade agreements 
17. Nepal is member of two overlapping regional tr ade agreements:  the South Asian Free Trade 
Area (SAFTA) Agreement, and the Bay of Bengal Initiative for Multi-Sectoral Technical and 
                                                      
8 WTO documents WT/LET/449, 14 October 2003;  and WT/LET/464, 29 March 2004. 
9 The process of Nepal's accession to the multilatera l trading system started during the Uruguay Round 
when Nepal first applied for GATT membership on 16 Ma y 1989.  However, due to political considerations the 
process was halted for five years. 
10 WTO document IP/C/40, 30 November 2005. 
11 WTO online information.  Viewed at:  h ttp://stat.wto.org/Coun tryProfile/NP_e-htm. 
12 WTO document WT/MIN(05)/ST/138, 17 December 2005. 
13 Nepal also calls for the recognition of LDCs' marginalization from the mainstream of world economy 
with a declining share in world trade, investment, and output, and where LDCs are not  able to compete in the 
international market due to supply-side constraints.  Fo r a country like Nepal transaction costs are even higher 
with its natural handicap as a landlocked country.  Ne pal has stated that effec tive market-access opportunities 
and strengthening supply-side capabilities are twin pillars upon which rests the meaningful integration of the 
LDCs in the global trading system (WTO docu ment WT/MIN(05)/ST/138,  17 December 2005). WT/TPR/S/257/Rev.1 Trade Policy Review 
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Economic Cooperation (BIMSTEC).  It has signed 17  bilateral agreements, some of which are no 
longer in force;  has a trade cooperation agreement wi th the EU;  and is elig ible under the Generalized 
System of Preferences (GSP) schemes of various countries. 
(a) The South Asian Free Trade Area (SAFTA) Agreement 
18. Nepal played an active role in the form ation of the economic-development-oriented 
South Asian Association for Regional Cooperation (SAA RC) and hosts its Secretariat.  The original 
seven members (Bangladesh, Bhutan, India, the Ma ldives, Nepal, Pakistan, and Sri Lanka) signed the 
South Asian Preferential Trading Arrangement (SAPTA) in 1993.14  Afghanistan became member in 
2008.  The objective of the SAPTA was to prom ote and sustain mutual trade and economic 
cooperation among the member states through exchange  of trade concessions.  It was agreed that 
SAPTA would be a first step to higher levels of  trade liberalization and economic cooperation among 
the members.  In 1997, SAARC members reiterate d their commitment to the creation of the South 
Asian Free-Trade Area (SAFTA) not later than 2005.   Four rounds of trade liberalization were 
completed within SAPTA covering over 5,000 tariff subheadings.  Each round contributed to increased product coverage and deeper tariff concessions. 
19. The SAFTA was signed in January 2004 and impl emented with effect from 1 January 2006;  
it superseded the SAPTA.  SAFTA was notified to the WTO in April 2008.
15  Under its Trade 
Liberalization Programme, scheduled for completi on by 2016, SAFTA aims at further enhancing 
regional economic integration through promotion of free trade.  The least developed member states 
(Afghanistan, Bangladesh, Bhutan, Nepal, and the Ma ldives) are expected to benefit from special and 
differential treatment accorded to them under SAFTA.16  Each SAFTA country maintains a list of 
exceptions (Sensitive List).  Nepal's list contai ns 1,295 tariff lines at the HS 8-digit level for 
non-LDCs, and 1,257 tariff lines for LDCs, covering a wide range of products (Chapter III(1)(iii)(c)). 
20. In 2010, the SAARC Agreement on Trade in Se rvices (SATIS) was signed with the aim of 
fostering economic integration in the region.17 
(b) The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation 
 (BIMSTEC) 
21. The BIMSTEC entered into force in 1997 as a forum to facilitate and promote trade, 
investment, and technical coopera tion among participating countries.  It consists of five SAFTA 
member countries (Bangladesh, Bhutan, India, Nepa l, and Sri Lanka), plus Myanmar and Thailand 
from the Association of South East Asian Nations (ASEAN).18  It identifies 13 broad sectors for 
cooperation, including:  trade and investment, tec hnology, tourism, transport and communication, 
energy, agriculture, fisheries, poverty alleviation,  and counter-terrorism and transnational crimes.19  
                                                      
14 Nepal was the first country  to ratify SAPTA in 1993. 
15 WTO document WT/COMTD/N/26, 24 April 2008. 
16 In the process of converting SAPTA into SAFTA concessions, it was agreed that items for which 
SAPTA concessions were available to LDCs, appearing in the sensitive lists  of non-LDCs under SAFTA, would 
maintain the same level of SAPTA concessions. 
17 The signing took place during the Sixtee nth SAARC Summit held in Thimpu, Bhutan. 
18 BIMSTEC was initiated with the goal of combin ing the "Look West" policy of ASEAN with the 
"Look East" policy of South Asia.  The purpose and principles of BIMSTEC date back to the Bangkok Declaration of 6 June 1997 on the establishment of Bangladesh-India-Sri Lanka-Thailand Economic 
Cooperation (BISTEC).  Nepal particip ated as an observer from 1998 a nd became member in 2004, together 
with Bhutan. 
19 See BIMSTEC online information.  Viewed a t:  http://www.bimstec.org/about_bimstec.html. Nepal WT/TPR/S/257/Rev.1 
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22. In 2004, BIMSTEC parties agreed to estab lish the BIMSTEC Free Trade Area Framework 
Agreement in goods, services, and investment.  Arti cle 3 of the Agreement provides that products, 
except those included in the Negative List, will be subject to tariff reduction or elimination on the 
basis of fast and normal tracks (Table II.2) for its developing country parties (India, Sri Lanka, and 
Thailand) and LDC parties (Bangladesh, Bhutan, Myan mar, and Nepal).  Rules of origin have not yet 
been agreed among BIMSTEC countries (Chapter II I(1)(i)(c)).  These issues are being discussed in 
BIMSTEC's Trade Negotiating Committee. 
Table II.2 
BIMSTEC, fast and normal tracks for trade liberalization 
Countries Developing count ry parties LDC parties 
Fast track:   
India, Sri Lanka, and Thailand 1 July 2006 to 30 June 2009 1 July 2006 to 30 June 2007 
Bangladesh, Bhutan, Myanmar, and Nepal 1 July  2006 to 30 June 2011 1 July 2006 to 30 June 2009 
Normal track:   
India, Sri Lanka, and Thailand 1 July 2007 to 30 June 2012 1 July 2007 to 30 June 2010 
Bangladesh, Bhutan, Myanmar, and Nepal 1 July  2007 to 30 June 2017 1 July 2007 to 30 June 2015 
Source:  Information provided by the Nepalese authorities. 
(c) Bilateral agreements 
23. Nepal has signed bilateral trade agreements with  (year of signing in parentheses):  Bangladesh 
(1976);  Bulgaria (1980);  China (1981);  Czechoslo vakia (1992);  Democratic People's Republic of 
Korea (1970);  Egypt (1975);  India (1991);  Mongolia (1992);  Pakistan (1982);  Poland (1992);  
Republic of Korea (1971);  Romania (1984);  Sr i Lanka (1979);  United Kingdom (1965);  United 
States (1947);  USSR (1970);  and Yugoslavia (196 5).  These agreements provide most-favoured-
nation treatment and basically cover trade in goods.  Some of the agreements have been terminated or 
do not apply.20  On 20 November 1995, Nepal signed a trade cooperation agreement with the EU.21 
Bilateral agreement between India and Nepal 
24. The bilateral agreement between India and Nepa l incorporates the Transit Treaty, the Treaty 
of Trade, and the Agreement on Cooperation to C ontrol Unauthorized Trade.  The Transit Treaty 
allows Nepal to trade with other c ountries through the Kolkata/Haldia ports.22  The Treaty of Trade 
dates back to 1991;  a new Treaty was signed in Octo ber 2009.  It is renewed every seven years unless 
one of the parties informs the other to the contrary .  Under this Treaty, India and Nepal accord each 
other unconditional MFN treatment;  they also exem pt imports of certain primary products from 
customs duties and quantitative restrictions on a reci procal basis;  and India grants (non-reciprocal) 
preferential treatment to almost all industrial produc ts manufactured in Nepal in order to promote the 
industrial development of Nepal.  India is by far Nepal's largest trading partner (Chapter I(2)(ii)(b)). 
25. On the basis of Article IV of the Treaty of Trade, the following primary products are eligible, 
on a reciprocal basis, to be exempted from cust oms duties and quantitative restrictions:  agriculture, 
horticulture and forest produce and minerals that  have not undergone any processing;  rice, pulses, 
                                                      
20 For example, the agreements with Bulgaria, Poland, and Roma nia ceased to exist when these 
countries joined the European Union. 
21 It also covers respect for human rights and democratic principles;  cooperation in development, 
science and technology, energy, agriculture, the environment;  and action to combat drugs and AIDS (Ministry 
of Foreign Affairs of Nepal online information.  Viewed  at:  http://mofa.gov.np/bilateralRelation/nepal-eu.php). 
22 The Transit Treaty was extended on 30 March 2006 for seven years. WT/TPR/S/257/Rev.1 Trade Policy Review 
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and flour;  timber;  jaggery (Gur and Shakhar);  anim als, birds, and fish;  bees, bees-wax and honey;  
raw wool, goat hair, and bones as used in the ma nufacture of bone-meal;  milk, home-made products 
of milk, and eggs;  ghani-produced oil and oil cak es;  ayurvedic and herbal  medicines;  articles 
produced by village artisans as are mainly use in vi llages;  akara;  yak tail;  and any other primary 
products that may be mutually agreed upon. 
26. Under Article V of the Treaty of Trade, industrial products from Nepal are given 
(non-reciprocal) access to the Indian market, free of  customs duties and the quantitative restrictions;  
exceptions include vegetable fats, acrylic yarn, zi nc oxide, and copper products under Chapter 74 and 
heading 8544 of the HS Code. 
(d) Other agreements 
27. In 2010, Nepalese products received pref erential treatment under the GSP schemes of 
Belarus, Canada, EU23, Japan, New Zealand, Norway, Russian Federation, Switzerland, Turkey, and 
the United States.24 
28. Nepal  does not  participate in the Global System of Trade Preferences (GSTP) among 
developing countries. 
(5) INVESTMENT FRAMEWORK  
29. A major objective of Nepal's economic policy programme is to promote and encourage a 
transparent and fair business environment for both dom estic and foreign investment, and to increase 
the role of the private sector in the developmen t process.  Some of the key reasons for Nepal to 
encourage inflows of foreign direct investment (FDI), are:  to promote sustainable GDP growth, create 
increasing job opportunities for its young labour force, and obtain improved technology.  With this in 
mind, the Government aims to act as a facilitator to all investors, concentrating its efforts on 
developing the infrastructure required, as well as guaranteeing a stable macr oeconomic environment. 
30. Nepal's FDI inflows have been low compared  with other LDCs, mainly due to weak 
infrastructure, power shortages, poor labour rela tions, political transition, and governance issues 
(Chapter I(2)(iv)).  A number of these issues are be ing addressed as Nepal proceeds with its transition 
to a new political regime.  Improvements suggested by the NTIS include:  (i) amending the draft 
Special Economic Zone (SEZ) bill25;  (ii) creating the Board of Investment (BoI) to promote 
investment in Nepal (the BoI has already been est ablished);  (iii) constituting a professional one-stop 
investor facilitation service in the BoI and afte r-care policy advocacy through the Nepal Business 
Forum (NBF);  (iv) developing capacity to condu ct investment promotion in the BoI;  and 
(v) developing an investment promotion action plan for the BoI based on a clear industrial policy.  
Moreover, alignment between the targeted sectors for investment campaigns and potential export 
activities identified under the NTIS should be encouraged.26 
31. Nepal's investment framework consists of the Industrial Enterprises Act of 1992 (as amended) 
and the Foreign Investment and Technology Tran sfer Act of 1992 (as amended).  The Industrial 
Enterprises Act established the One-Window Committee coordinated by the Director General of the 
                                                      
23 The EU provides duty-free and quota-free access to  Nepalese exports under its Everything But Arms 
(EBA) initiative. 
24 UNCTAD document, UNCTAD/ITCD/TSB/Misc.62/Rev.4, 2010. 
25 Proposed amendments include removing the 75% export requirement for enterprises based in the 
SEZs, though duties and tariffs for domestic production would remain. 
26 Ministry of Commerce and Supplies (2010). Nepal WT/TPR/S/257/Rev.1 
 Page 19 
 
 
Department of Industry under the Ministry of Industry.27  The Department of Industry's procedure is 
structured as a "single window" system.  Investor queries and FDI applications are channelled through 
a single source intended to ensure c oordinated attention by line ministries.28  The Industrial Promotion 
Board (chaired by the Minister for Industry) w as established in 1992 to increase Nepal's pace of 
industrialization.  It formulates and coordinates implementation of industry and investment policies.29 
32. The investment regime permits foreigners to invest up to 100% in all sectors of the economy, 
except for activities contained in the "negative list", which are reserved for national investors:  
(i) cottage industries30;  (ii) personal services (e.g. hair cutting, beauty parlour, tailoring, driving 
training);  (iii) arms and ammunitions industries;   (iv) explosives and gunpowder;  (v) industries 
related to radioactive materials;  (vi) real estate business (excluding construction);  (vii) motion 
picture industries (produced in national languages a nd the language of the nation);  (viii) security 
printing;  (ix) currency and coinage business;  (x) reta il business;  (xi) travel agencies;  (xii) trekking 
agencies;  (xiii) water rafting;  (xiv) pony tr ekking;  (xv) horse riding;  (xvi) cigarette, bidi31, alcohol 
production (excluding those exporting over 90% of thei r production);  (xvii) internal courier services;  
(xviii) atomic energy;  (xix) tourist lodging;  (xx) poultr y farming;  (xxi) fisheries;  (xxii) bee keeping;  
and (xxiii) consultancy services (e.g. manageme nt, accounting, engineering, and legal services).32  
According to the authorities, these exceptions ai m to promote the activities of small entrepreneurs 
who generally use indigenous skills , resources, and technology, while others are for national security 
reasons.33   
33. Some of these exceptions may only be modifi ed by the Parliament, including sensitive 
industries related to national security;  cottage industr ies;  personal services;  and real estate business.  
Other exceptions may be amended by the Government , such as retail business;  travel agencies;  
cigarette, bidi, and alcohol  production other than for export;  a rang e of small tourist-related activities, 
including tourist lodging but not hotels;  and consultancy services. 
34. All agreements entailing the transfer of technolog y from abroad require government approval.  
This includes non-equity relationships such as franc hising as well as other form of services.  Foreign 
individuals are not permitted to own land, but reside nt companies may do so even if foreign-owned.  
A further ad hoc  restriction is that total foreign shareholding in all financial services institutions is 
limited to 67% of the issued share capital, except banks (80%) (Chapter IV(3)(ii)(a)). 
35. Prior approval is required for all FDI.  Techni cally, even reinvestment requires approval, as 
do all loans from abroad.  All applications are proc essed by the Department of Industries irrespective 
of the sector involved.  The Department may itsel f approve FDI applications for projects with an 
                                                      
27 The One-Window Committee has repr esentatives from various ministri es, the private sector, and the 
FNCCI (Department of Industry online information.  Viewed at:  http://doind.gov.np/index.php?page=one-
window-committee). 
28 The Department appears to play a pivotal and useful role in the system for securing secondary 
approvals.  For example, applications for work permits and visas and for investment-related foreign exchange 
control approvals need the prior sanction of the Department, and its confirmation of the bona fides  of the 
application is important to the line agencies (UNCTAD, 2003). 
29 The IPB has representatives from other relevant ministries, the private sector, and the Federation of 
Nepalese Chambers of Commerce and Industry (FNCCI) (Department of Industry online information.  Viewed 
at:  http://doind.gov.np/index.php?page=industrial-promotional-board). 
30 Traditional industries utilizing specific skill or local raw materials and resources, and 
labour-intensive industries related to national tradition, art, and culture. 
31 A bidi is a thin cigarette filled with tobacco and wr apped in a tendu leaf, tied with a string at one end. 
32 These exceptions are specified in Annex 6 of the Foreign Investment and Technology Transfer Act. 
33 WTO document WT/ACC/NPL/16, 28 August 2003. WT/TPR/S/257/Rev.1 Trade Policy Review 
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investment cost of under the equivalent of about US $12.5 million.  Applications in respect of larger 
investments are decided by the Industrial Promotion Board. 
36. Foreign investors are required to apply for a licence to the Department of Industries, on a 
prescribed form, along with a detailed feasibility report.34  Deposits for new foreign investment 
licences ranges from Nr 1,000 to 20,000, on the basis of  fixed capital.  The decision on the application 
is communicated to the applicant within 30 days from the date of filing.  If the licence is granted, the 
investor must apply to register the company with the Office of the Company Registrar (OCR) within 
35 days from receipt of permission;  the company is registered within 15 days from the filing of the application under Nepal's Company Act.
35  The investment framework requires an explanation in case 
of rejection and there is right of appeal. 
37. Some incentives are offered to local and fo reign investors.  No specific performance 
requirements are imposed as an inducement or conditi on of investment.  Other features of Nepal's 
investment regime are:  it prohibits the na tionalization of any private-sector industries36;  it guarantees 
full repatriation of capital, profits, technology transfer  payments, or dividends and interest on foreign 
loans37;  no income tax is imposed on interest income ea rned by a foreign investor from foreign loans;  
15% income tax is levied on royalty, technical, and management service fees;  a maximum rate of 
20% is levied on export income;  priority is given in  supplying electricity to investment projects;  no 
government intervention is made in fixing prices of  the products of any industry;  and business visas 
are granted to foreign investors or their dependent family members or authorized representatives and their dependent family members to stay in Nepal as long as they maintain their foreign investment.
38  
38. In general, in case of a dispute with third pa rties or with the Government, foreign investors 
have recourse to Nepalese courts.  Nonetheless, par ties most often prefer to settle their differences by 
negotiation and conciliation;  the Department of I ndustries is perceived as very helpful in settling 
disputes or differences amicably.  International arbitration to settle a dispute with the Government is 
available to foreign investors but only if th e investment agreement provides for such right.39 
39. Nepal is a member of the Multilateral Investme nt Guarantee Agency (MIGA) of the World 
Bank, and has ratified the Interna tional Convention on the Settlement of  Investment Disputes.  It has 
signed reciprocal encouragement and protection of investment agreements with France, Germany, 
Mauritius, and the United Kingdom.  Nepal has double taxation avoidance agreements with Austria, 
China, India, Mauritius, Norway, Pakistan, Qatar, Republic of Korea, Sri La nka, and Thailand.  Nepal 
signed a Trade and Investment Framework Agreement with the United States in April 2011. 
                                                      
34 The application form calls for key information on the investment project, such as total capital 
investment, sources of finance, plant capacity, location of the project, machinery, eq uipment, and raw materials 
required, and the specific contributions to be made by foreign and local investors. 
35 A company may be incorporated as a private limited company or a public limited company.  A 
private company is limited to 50 shar eholders and its incorporation needs a subscription of capital by at least 
one investor.  A public company needs at least seve n investors to subscribe to its capital.  After its 
incorporation, a public company must publish a prospect us with the approval of the OCR and the Securities 
Board, before issue of shares to the public. 
36 The Industrial Enterprises Act states that no "industry" will be nationalized. 
37 The transfer of funds is subject to the central bank exchange control administrative requirements in 
order to establish that the requests are bona fide . 
38 FNCCI online information.  Viewed a t:  http://www.fncci.org/foreign1.php. 
39 UNCTAD (2003). Nepal WT/TPR/S/257/Rev.1 
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(6) AID FOR TRADE  
(i) Overview 
40. Nepal's export trade and aid-for-trade stra tegies are based on the 2010 NTIS, the updated 
version of the 2004 Diagnostic Trade Integration Study (DTIS).  The NTIS identifies priority sectors 
to enable trade diversification and growth (sectio n (3) above).  It also identifies needs for donor 
support to address current constraints to trade and to help potential exports to flourish. 
41. Support for the trade agenda is being provided by bilateral and multilateral funding partners;  
in addition, there are implementing partners and part ners providing technical assistance.  Recently, the 
Government of Nepal, led by the MoCS, and in cl ose cooperation with its de velopment partners, has 
started to strengthen donor coordination to Nepal's aid-for-trade agenda.   
42. Nepal has made important strides towards owne rship and leadership in aid for trade and 
implementation of the NTIS.  To continue on this trajectory, it is important that the MoCS and in 
particular the EIF National Implem entation Unit (NIU) develop sustainable capacity (1) to continue 
mainstreaming trade into national strategies and the government-donor dialogue;  (2) to continue 
government-donor dialogue to improve effectiveness of  the delivery of aid for trade;  (3) to make 
tangible steps towards productive capacity-building by implementing the NTIS action plan;  and 
(4) work with the private sector to develop trad e and export capacity.  More over, Nepal's development 
partners need to continue and step up their support for Nepal's aid-for-trade agenda enshrined in the 
Three-Year National Plan through its link to the NTIS. 
(ii) Donor dialogue and coordination on aid for trade 
43. In 2011, Nepal's development partners est ablished a donor group on aid for trade to 
coordinate their efforts to support the implementa tion of the NTIS and avoid duplication.  The donor 
group also unanimously selected Germany as the ne w Donor Facilitator.  The participating donors 
comprise:  Germany/GIZ, DFID, USAID, Finland, EU, DANIDA, UNDP, IFC and the ADB.  Donor coordination through meetings of the dedicated gr oup has been complemented by the creation of a 
web-based communication platform on aid for trade in  Nepal (www.nepaltrade.org).  The website will 
be used as a communications tool, and to facilitate acces s to information.  It will also be used to track 
NTIS implementation;  for the public, the website will include showcases for progress.  
44. These initiatives are particularly welcome in  an environment where cooperation among 
donors on aid for trade may still not be perfect.  The donor group on aid for trade has recently started mapping and updating donor activities related to the NTIS, which was welcomed by the Government, 
the private sector, and the development partners.  The mapping exercise will be an important element 
in increasing the Government's capacity to monitor and evaluate aid for trad e and eventually enabling 
the partners to reach the results necessary to expand trade and inclusive exports.  
45. The German Government as EIF Donor Facilitator has a pivotal role.  A priority will be to 
join the Government of Nepal in lobbying other deve lopment partners to not only step up their aid for 
trade but to also firmly anchor any aid for trade on the NTIS and its action plan.  
46. In the WTO/OECD's 2010/2011 Partner Country Questionnaire on Aid for Trade, the 
Government of Nepal indicates that donors are incr easingly aligning their support with the NTIS and 
that greater aid-for-trade harmonization, such as through joint needs assessment, co-financing, 
sector-wide approaches, joint implementation, monito ring, and evaluation are at initial stages.  To 
further strengthen such alignment, the Government of Nepal is considering setting up a Sector Wide 
Approach (SWAp) for NTIS implementation. WT/TPR/S/257/Rev.1 Trade Policy Review 
Page 22 
  
(iii) Supporting institutional capacity to manage aid for trade 
(a) Support by the Integrated Framework (IF) 
47. Nepal had been an IF beneficiary since 2002;  its  first DTIS – elaborated in cooperation with 
the World Bank – was finalized in 2004.  After Ne pal's accession to the WTO, implementation of the 
DTIS Action Matrix was launched with a Window 2 project focused on institutional trade-related 
capacity-building with focus on (1) improving trade facilitation, (2) strengthening WTO compliance, especially support to SPS/TBT/TRIPS enquiry po ints, and (3) establishing an export financing 
mechanism.  A follow-up project also using Window 2 funding was approved in 2006.  The Enhancing Nepal's Trade Related Ca pacity (ENTReC) project started in 2006, continuing efforts in 
capacity building;  this project was co-funded by UNDP and provided direct support to the MoCS. 
The project closed in 2010 and some of the support provided through ENTReC is now provided through the Government of Nepal and the EIF Tier  1 project.  Some of the DTIS Action Matrix 
priorities were implemented through the Window 2 and other, government-funded projects;  however, 
most priorities were not funded.  During this period,  the political transition was of paramount priority 
for both the Nepalese Government and for the donors, with most support provided to social sectors, 
conflict management, and the peace process.  
(b) Support by the Enhanced Integrated Framework (EIF) 
48. In tandem with the NTIS, Nepal prepared a project to support the national implementation 
arrangements for the EIF (the second phase of the IF programme) and the NTIS.  The project, including its budget of US$905,200, was approved by the EIF Board on 15 March 2010 for funding 
through the EIF's Trust Fund.  The project identifie d five key results:  (a) enhancing the capacity in 
the Government of Nepal to formulate, manage, implement, and monitor TRTA and aid for trade 
using an SWAp;  (b) further mainstreaming tr ade into national development strategies;  
(c) implementing NTIS priorities;  (d) delivery of aid for trade in accordance with the NTIS 
recommendations;  and (e) coordination of aid for trade according to Paris Principles.  
49. By the time the NTIS was validated in June 2010, the EIF project was under implementation 
and an NIU staffed by a mix of internally assigned a nd externally recruited staff, and headed by the 
National EIF Focal Point and Joint Secretary of the MoCS.  The NIU is fully integrated and 
embedded in the MoCS and cooperates closely with counterparts in key line ministries.  Through the 
setting up of the NIU, the MoCS intends to build a de dicated core team to lead the implementation of 
the NTIS over the coming years.  Its role is  to guide operational im plementation as well as the 
monitoring of the EIF by establishing and ensuri ng close coordination and cooperation with EIF 
national focal points across the Nepalese Government .  To that end, a tight coordination mechanism 
has been established.
40  
50. Implementation of the EIF process and the NTIS through the NIU is monitored by the 
National Steering Committee (NSC).41  The NSC also supports mainstreaming of trade into national 
development plans and ensures effective coordi nation among different government institutions, 
private sector organizations, and other stakeholders.  The NSC has proved to be useful in fostering 
closer cooperation within the G overnment and with the private sector on trade issues, and in 
increasing awareness on the role trade can play fo r inclusive economic grow th and development.  
                                                      
40 This includes the Ministry of Finance, the National Planning Commission, the Ministry of 
Agriculture and Cooperatives, the Ministry of In dustry, the private sect or, and civil society. 
41 The NSC is chaired by the Chief Secretary of the Government of Ne pal and includes secretaries of 
different ministries, high level officials of the releva nt agencies, and representativ es of the private sector. Nepal WT/TPR/S/257/Rev.1 
 Page 23 
 
 
51. The Government of Nepal provides budgetary supp ort for the implementation of its NTIS.  In 
2010/2011, Nr 30 million was allocated to support activ ities in the tea and coffee subsector (establish 
collective trade marks), in the cardamom subsecto r (fund high-yielding seeds, nursery development, 
and drying), in the pashmina and jewellery sub sector (lab establishment), and to establish a cold 
warehouse at the Tribhuvan International Airport.   In the 2011/2012 Budget, Nr 50 million were 
allocated to support the following proposed activ ities:  cardamom (funding or high-yielding seeds, 
nursery development and drying);  ginger (distribu tion of high-yielding rhizomes to farmers);  
medicinal herbs (establishment of a collection a nd processing centre);  export promotion (running a 
trade fair in Kathmandu and capacity enhancement or medicinal herbs processing);  tea and coffee 
(support to collective trade marks);  small and cotta ge industry (product development for herbs, tea, 
honey, precious stones, natural fibres and bam boo);  and laboratory and quality control.  
52. Furthermore, the Government of Nepal has a number of EIF Tier 2 projects under 
preparation.  A first Tier 2 project in support of th e ginger industry has been finalized, and part of the 
project has already been approved for funding by the STDF;  submission for funding of the other part of the project through the EIF Trust Fund is expect ed for late 2011.  Further Tier 2 projects under 
development will strengthen the trade negotiation capac ity of Nepal, and the network of trade support 
institutions.  The NTIS will establish a medium-t erm programme for trade capacity development 
through the EIF and local donors;  to identify elemen ts of this programme in a transparent manner, the 
Government of Nepal has issued a public notice for Expressions of Interest for Tier 2 project 
development on its website.   
53. The NSC has created six inter-ministerial technical committees (TCs) to improve 
coordination on the following areas:  (1) aid for tr ade, and service trade, led by MoCS, (2) trade 
negotiation capacity development and trade support institutions, led by MoCS, (3) agriculture and 
SPS, led by MoAC, (4) manufacturing, TBT, investment and IPR, led by MoI, (5) customs, and trade facilitation, led by MoF, and (6) legal reform led by the Office of the Prime Minister and Council of 
Ministers.  
54. Results achieved by the EIF support since implem entation of the project have mainly in donor 
coordination and NTIS implementa tion.  As of November 2011, the German Government replaced 
UNDP as the new EIF Donor Facilitator and has be en committing human and financial resources to 
strengthening the EIF structures in Nepal.  With  respect to donor coordination, the medium-term 
objective is to increase the visibility of aid for trade in Nepal, increase donor coordination and 
harmonization with the ultimate aim of showing results of aid for trade at the programme/sector level.   
55. The Government of Nepal's assessment, as refl ected in its response to the 2010/11 OECD 
WTO Partner Country Questionnaire on Aid for Trade, is that through the support of the EIF a strong aid-for-trade coordination mechanis m has been set up.  Furthermore, the EIF Steering Committee is 
considered an effective mechanism in coordi nating Nepal's trade agenda.  However, full 
implementation of the EIF only started in March 2011 and as it is still in its initial phase, the full 
range of results is yet to be seen. 
(iv) Recent and planned aid-for-trade support to Nepal 
(a) Aid-for-trade flows 
56. According to the OECD Creditor Reporting System (CRS) Database, Nepal's trade-related aid 
flows committed between 2006 and 2009 increased by 40% compared with 2002-05.  More than half 
of aid for trade to Nepal is directed to economic infrastructure (transport and storage, 
communications, energy supply and generation) and the remainder is allocated to building productive WT/TPR/S/257/Rev.1 Trade Policy Review 
Page 24 
  
capacity (business and other services, banking and fi nancial services, agriculture, forestry, fishing, 
industry, and tourism);  flows to trade policy an d regulations and trade- related adjustment are 
minimal, amounting to less than 1% on average between 2002 and 2009.  About a third of total aid committed to Nepal is allocated to aid for trade (Table II.3).  
Table II.3 
Aid-for-trade support, 2002-09 
 Commitments Disbursements 
 2002-05 
average 2006 2007 2008 2009 2006 2007 2008 2009  
Trade policy and regulations and 
trade-related adjustment          
Trade policy and 
administrative management 33 2,973 1,282 1,319 1,657 36 890 214 416 
Trade facilitation 0 0 44 59 707 0 44  59 77 
Regional trade agreements  0 0 0 0 0 0 -93 0 0 
WTO negotiations 39 8 18 3 2 8 18 3 2 
Trade education/training 11 1 0 42 0 0 0 42 0 
Sub-total 84 2,982 1,344 1,423 2,366 44 859 318 494 
Economic infrastructure          
Transport and storage 22,604 70,178 45,412 75,706 133,686 35,923 41,940 59,589 49,080 
Communications 1,263 552 2,524 1,854 686 4,450 2,015 5,312 1,515 
Energy supply and 
generation 52,481 59,959 77,229 44,061 92,801 36,619 39,386 57,632 68,363 
Sub-total 76,347 130,689 125,165 121,622 227,173 76,992 83,341 122,533 118,959 
Building productive capacity          
Business and other services 4,919 736 3, 507 10,949 1,606 4,253 3,301 2,585 3,500 
Banking and financial 
services 35,989 1,459 948 2,493 10,333 9,248 3,995 1,956 2,014 
Agriculture 44,870 73,392 126,828 33,191 28,298 14,298 19,110 19,632 34,286 
Forestry 5,346 83 1,601 18,026 11,125 3,779 4,540 5,340 10,652 
Fishing 11 269 190 156 51 183 106 309 50 
Industry 1,896 1,005 1,463 937 11,416 2,243 1,325 1,539 3,438 
Tourism 900 381 462 245 134 1,019 423 323 160 
Sub-total 93,930 77,324 134,998 65,997 62,963 35,022 32,799 31,684 54,100 
Other trade-related needs          
Total aid for trade 170,361 210,995 261,507 189,042 292,501 112,058 116,999 154,534 173,553 
Total sector allocable ODA 558,356 475,657 713,801 632,881 931,971 405,297 437,267 519,641 665,590 
Source: OECD-DAC, Aid activity  database (CRS). 
57. An examination of the OECD CRS database shows a marked gap between aid-for-trade 
commitments and disbursements in Nepal.  Comm itments by development partners indicate their 
priorities for future funding and can thus be used  by Nepal for its own aid-for-trade strategy and 
planning.  However, in order to achieve the results  intended by aid for trade, the resources committed 
must also be disbursed. 
(b) Aid for trade and technical assistance mapping 
58. In mid-2011, 13 donor support actions were ongoing for NTIS cross-cutting issues;  in 
addition, funding for 10 TA actions is being pl anned.  The donors supporting NTIS implementation 
are bilateral partners (EU, Finland, Germany, India, UK/DFID, China, and US/USAID), multilateral 
partners (ADB, World Bank), and implementing partners FAO, IFC, IMF, ITC, OIE, UNESCAP, 
UNIDO, and WHO), as well as the EIF and a private Indian tourism company.  Nepal WT/TPR/S/257/Rev.1 
 Page 25 
 
 
59. For objective 1 (strengthen trade negotiations) none of the recommended actions is currently 
funded.  However, funding for 10 (out of 16) has b een identified for the future, in particular through 
planned intervention by US/USAID. Support fro m USAID will be through its Nepal Economic 
Agriculture and Trade (NEAT) programme, wh ich is focused on improving Nepal's economic 
foundations to promote rapid, sustained and incl usive economic growth, to lessen the potential for 
conflict, to reduce poverty, and to improve lives. 
60. Thirteen actions are currently ongoing in s upport of objective 2 (strengthen the technical 
capacity of domestic agencies dealing with non- tariff barriers and other business environment 
supportive institutions);  funding for 18 additional ac tions has been identified, and this would bring 
the total number of funded priority actions to 31. 
61. Four of the nine recommended actions in support of objective 3 (strengthen the export 
capacity of 'inclusive' export potential sectors) are already supported, and a further four recommended 
actions will be supported by planned TAs in the future.  
62. All ten actions recommended towards meeting objective 4 (strengthen the Government of 
Nepal's capacity to coordinate and manage TRTA and aid for trade and to implement the NTIS) are 
already supported by existing funding for TA, provi ded by Finland, Germany (GIZ), UK/DFID, and 
the EIF Trust Fund. 
(c) Trade-related technical assistance provided by the WTO 
63. Since its accession to the WTO, Nepal has pa rticipated in 188 TA activities listed in the 
database by the Institute for Training and Technical Cooperation (ITTC) of the WTO.42  I n  2 0 1 0 ,  
Nepal hosted the first regional EIF workshop for Asia n LDCs.  Nepal has also participated in regional 
seminars and in regional and Geneva-based trad e policy courses and in e-learning activities.   
64. WTO activities to which Nepal has been inv ited in 2011, excludi ng national activities, 
include:  Advanced Trade Policy Courses, Regi onal Trade Policy Courses of Asia and Pacific 
Economies, Advanced Thematic Courses on TB T, Symposia on Trade Facilitation and on WTO 
Reference Centres, WTO/TBT Workshop on Regulatory Cooperation, Advanced Training Course on 
WTO Dispute Settlement, Workshop on Non-agricu lture Market Access Negotiations for Asian 
Economies, Regional Workshop on WTO Rules a nd Procedures Relating to Regional Trade 
Agreements for the Asian Region (with ESCAP), Advanced Workshop on the GATS and the Services 
Negotiations for Asia, Trade and Development,  Advanced Training Programme for Senior 
Government Officials in Asian Economies, Intens ive Course on Trade Negotiation Skills for Asia and 
the Pacific Islands and a Workshop for Parliamentarians  on International Trade.  Nepal is also invited 
to participate in the Mission Internship progr amme and several distance-learning activities.  
65. In the context of WTO accession, Nepal received assistance from UNDP and UNCTAD and 
from many donor agencies including USAID, DFID , the EU, and Australia.  Specifically, Nepal 
received technical assistance on customs administ ration from the United States, on TBT and SPS from 
the EU, and on TRIPS from Australia.  
                                                      
42 These activities included:  five on the IF/EIF;  and nine national seminars and workshop on:  Trade 
Facilitation Needs Assessment (2008), the EIF and STDF  (2008), Upgrading of th e WTO Refere nce Centre 
(2008, in partnership with ITC), High-level Sensitization on DDA, Aid for Trade and the EIF (2009), the 
Multilateral Trading System and the DDA (2010), Briefing  for Nepalese Officials (2010), and Nepal's Trade 
Policy Review (2010). WT/TPR/S/257/Rev.1 Trade Policy Review 
Page 26 
  
66. A standards and trade development facility ( STDF) project preparation grant (PPG) was 
approved and undertaken in 2006, followed by a project (US$350,000) approved in 2007 and 
implemented in 2008-10 by FAO.  The project provided training to strengthen the capacity of government officials responsible for food safety, an imal and plant health, and agricultural trade in 
Nepal, to effectively implement SPS measures and trade-related obligations.  The training manuals 
developed for this project are still used by the Mi nistry of Agriculture and Cooperatives.  A second 
STDF PPG was approved in 2010 to develop a proj ect on strengthening SPS capacity in the public 
and private sectors, and supporting implementation of the SPS Agreement.  The PPG has been implemented during 2011.  
67. A trade facilitation needs assessment was undert aken for Nepal in 2008 and Nepalese officials 
routinely participate in the trade fac ilitation capital-based officials' programme. 
(v) Results of aid for trade and outlook 
68. In the 2010/11 OECD/WTO Aid-for-Trade Questio nnaire, the Government of Nepal assesses 
that, so far, aid for trade has shown only a limited contribution to its overall goal – increased economic growth and poverty reduction – and to its aim of increasing and diversifying exports. 
However, awareness and understanding of the future be nefits of aid for trade have increased and trade 
has been fully mainstreamed into the overall de velopment strategy (2010-13 Three-Year Interim 
Plan).  
69. A key contributing factor to the successful mainstreaming of trade in Nepal was an outreach 
campaign during the formulation of the NTIS to cr eate widespread awareness regarding the important 
role of trade and exports for inclusive growth.  Similar outreach and awareness-raising activities need 
to be undertaken in the future to ensure continue d recognition of the key role of trade for economic 
development and poverty reduction.  
70. For the NTIS to remain a key document for trade mainstreaming and various coordination 
bodies on trade and aid-for-trade issues, it is important to hold regular reviews to ensure that the NTIS 
and its action plan are adjusted to the changing  national, regional, and global environment.  
71. To ensure the success of the NTIS, it is im portant to further advance coordination and 
cooperation among the key stakeholders in the Govern ment, between the public and the private sector, 
and between the Government and donors.  While progr ess has been made in the context of the NTIS, 
further improving public-private se ctor consultation will be an impor tant element of sustained trade 
capacity building.  
72. Furthermore, the rate of disbursement of aid fo r trade to Nepal needs to  be increased to ensure 
that the funds committed can be used to fund th e activities identified as key to achieving inclusive 
trade and export expansion.  
73. Nepal's plans to establish a SWAp to suppor t NTIS implementation as suggested in its 
Aid-for-Trade Partner Questionnaire, underscores the Government's commitment to take the lead in 
coordinating and managing existing aid for trade, and to engage devel opment partners to step up their 
support, including possibly through a joint financing facility.  Nepal WT/TPR/S/257/Rev.1 
 Page 27 
 
 
74. Therefore, development partners would need to  step up their aid for trade, including TRTA 
engagements at the multilateral, regional, and nationa l levels in a continuous  and predictable manner 
to ensure that Nepal and other LDCs can implem ent their aid-for-trade agenda and reverse their 
marginalization in the global economy caused by supply-side constraints.43 
 
                                                      
43 See OECD and WTO (2011).