1

A

Global Country Study Report on

“NEPAL”

College code: 701

Ahmedabad Institute of Technology

In partial Fulfillment of the Requirement of the Award forthe

Degree of

Master of Business Administration (MBA)

In

Gujarat Technological University

Ahmedabad

Year: 2013

2

ACKNOWLEDGMENT

A Global / Country Study & Report are a golden opportunity for learning. We

consider ourselves very lucky and honored to have so many wonderful people to

lead us through in completion of this project.

We would like to thank Prof. Mayank Bhatia (Head of the Department, MBA,

Ahmedabad Institute of Technology). We are also grateful to our GCR co-coordinator

prof. Digvijay Barot to help us in this project and also other faculty members for

helping us and giving the proper guidance in making our project.

We would also like to thank all who have shared their valuable information & time

which helped us in the completion of the project report.

3

Preface

In today’s era of cut-throat competition, Masters of Business Administration (MBA) is

sure to have an edge over their counterparts

As a student of M.B.A. programmed a course is based on management study,

every student need to be well versed not only with theoretical knowledge but also

with practical aspects of all managerial areas.

Practical knowledge is as important for student as a theoretical knowledge is. All

the principles of managements applied in companies have been very well in

explained in classroom studies given.

As a part of the curriculum, after the completion of first year of Master of Business

Administration (MBA) program under Gujarat Technological University, the student

shall also study and prepare a Global / Country Report in Semester III and IV by

doing the detail study of one particular country. The objective is enable the student

and teaching faculty learn about at least one Country, how to do business / export /

import with / within that country, and prepare and submit a Global / Country Report.

It allows a student to have an exposure to the real business world.

Thus the objective behind preparing this project report is to relate the management

subjects taught in classroom to their practical application. The project deals with

“Business Volume of different Products and Import & Export Opportunity” with

special reference to the country Nepal. The report mainly focuses on the political and

legal aspects of trade of all over the world.

4

PART 1

5

INTRODUCTION OF NEPAL

Nepal is one of the richest countries in the world in terms of bio-diversity. Its unique

geographical position and latitudinal variation have made Nepal the biggest natural

museum in the world. The elevation of the country ranges from 70 meters above sea

level to the highest point on earth, Mt. Everest, at 8,848 meters, all within a distance

of 150 km with climatic conditions ranging from subtropical to arctic.

This wild variation fosters an incredible variety of ecosystem, the greatest mountain

range on earth, thick tropical jungles teeming with a wealth of wildlife, thundering

rivers, forested hills and frozen valleys.

Within this spectacular geography is also one of the richest cultural landscapes

anywhere. The country is a potpourri of ethnic groups and sub-groups who speak

over 70 languages and dialects.

Nepal offers an astonishing diversity of sightseeing attractions and adventure

opportunities found nowhere else on earth. And you can join in the numerous annual

festivals that are celebrated throughout the year in traditional style highlighting

enduring customs and beliefs.

OVERVIEW OF NEPAL

Area: - 147,181 sq. km

Geography: - Situated between China in the north and India in the east, west and

south.

Capital: - Kathmandu

Population: - 26.6 million (Census 2011)

Ethnic groups: - Over 100 ethnic groups were including Newari, Maithili, Bhojpuri,

Tharu, Gurung, Sherpa, Kiranti, Limbu speakers Etc.

Languages: - Nepali is the national language. It is also the official language of the

country. English is widely spoken by many Nepalese people.

6

Currency: - Nepalese Rupee.

Internet TLD (Top Level Domain):- .np

ISD Calling Code: - 00977

Political System: - Federal Democratic Republic.

Religion: - Constitutionally, Nepal is a secular state. Until 2006, it enjoyed the

distinction of being the only Hindu Kingdom in the world. Nepalese population is

predominantly Hindu, with Buddhists, Muslims, and others constituting the rest.

Nepal is renounced for religious/cultural harmony.

Climate: - Nepal has four major seasons, namely: WINTER (Dec. to Feb), SPRING(March-May), SUMMER (June-Aug.), AUTUMN (Sept-Nov.)

FACTSHEET OF NEPAL

Population28,951,852 (July 2010 est.)

Age structure14 years: 36.6% (male 5,327,484/female 5,127,178)

15-64 years: 59.2% (male 8,094,494/female 8,812,675)

65 years and over: 4.2% (male 566,666/female 634,880) (2010 est.)

Median agetotal: 21.2 years

Male: 20.2 years

Female: 22.1 years (2010 EST.

Population growth rate1.419% (2010 est.)

Birth rate

7

22.43 births/1,000 population (2010 est.)

Death rate Birth rate22.43 births/1,000 population (2010 est.)

Death rate6.89 deaths/1,000 population (July 2010 est.)

Net migration rate-1.35 migrant(s)/1,000 populations (2010 est.)

UrbanizationUrban population: 17% of total population (2008)

Rate of urbanization: 4.9% annual rate of change (2005-10 EST.)

Sex ratioAt birth: 1.04 male(s)/female

Under 15 years: 1.04 male(s)/female15-64 years: 0.92 male(s)/female

65 years and over: 0.88 male(s)/female

Total population: 0.96 male(s)/female (2010 est.)

Infant mortality rateTotal: 46 deaths/1,000 live births

Male: 45.97 deaths/1,000 live births

Female: 46.04 deaths/1,000 live births (2010 est.)

Life expectancy at birthTotal population: 65.81 years

Male: 64.62 years

Female: 67.05 years (2010 est.)

Total fertility rate2.53 children born/woman (2010 EST.)

http://www.nicci.org/resources/about-nepal.php

8

DEMOGRAPHICS ENVIRONMENTIn present scenario of globalization, it becomes necessary to study and understand

global aspects because it is applicable to everywhere like business, academics and

in other dealings as well. Here the emphasis is given from business perspective. If

one wants to compete then they have to understand various domestic as well as

international market, country’s respective culture, political and economic conditions,

social norms and values, technological factors etc.

This project report include the overall analysis of 3rd world country analysis i.e.

Nepal. This project report analysis gives idea to the one company can do business

with the Nepal with what are the requirements of starting business and what are the

factors that are influenced in the doing business in Nepal.

This report includes the detail regarding the geographic and demographic

information of Nepal. In this both aspects the main points are to be consider are

ruling Government in Nepal, different name of Nepal itself, capital of Nepal,

administrative divisions of Nepal, National Holidays of Nepal, this all things help any

company to analyze basic idea about the Nepal.

This report contains different legal system of Nepal, Executive Branch, in this there

are three main branches are to be considering i.e. Chief of State, Head of

Government and Cabinet. In judicial branch there is Supreme Court or Sarbochha

Adalat (the president appoints the chief justice on recommendation of the

Constitutional Council; the chief justice appoints other judges on the

recommendation of the Judicial Council)

For setting up business in any country, the company focuses on the GDP of

particular country and analyzes that which sector gives more contribution to GDP. In

this report, there is considering of GDP rate of the Nepal from financial year 2001-02

to 2010-11. It helps company to better analysis. In includes all GDP related data that

is very helpful to the company. In geographic information, this project contain the

land used in Nepal i.e. Arable, Permanent crops and other and includes all different

points that are covered under the geographic information.

9

In this report there are focus on the trade and commerce relation between India and

Nepal. In this topic we considered the commercial and economic relation between

India and Nepal. Here there is analysis of trade that is done last few years in the

Nepal.

Here in Economy and Trade of Nepal, in Economy there are mainly covered things

i.e. Gross Domestic Product- in this we add 10 year data of GDP start from FY-2001-

02 to 2010-11, Industry, Agriculture, Tourism, Power. In Trade, there are following

things are consider- Direction of Foreign Trade, Imports, Exports.

For trade between two countries, there are so many different international

organization that influenced trade transits between the countries. One the

international organization that affects trade between India and Nepal is WTO (World

Trade Organization). It is a forum for governing to negotiate agreements. The main

function of WTO is trade negations between two countries, implementation and

monitoring, dispute settlement, building trade capacity.

Other international body that we analysis here is South Asian Association for

Regional Cooperation (SAARC). The Objectives of a SAARC is promote the

welfare of the people of SOUTH ASIA and Improve their Quality of Life. The

Principles of SAARC is cooperation for Mutual Benefit. The members of SAARC are

India, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Srilanka.

The main purpose taking analysis of SAARC because the member countries of

SAARC are majorly connected with the Nepal and India so its impact on Trade

between Nepal and India.

10

FINANCIAL MARKET

The brief note of the financial market factors are:

Money Market :-

Money market is an important ingredient of the financial market. The market for short-term

securities is known as the money market. It deals with those debt instruments and other

financial instruments that are issued with maturity of one year or less. In the financial market,

money market is proving very significant.

The money market is founded on the large amounts of funds, in which companies, banks and

other financial institutions wish to hold in highly liquid form to meet short-term fluctuations

in their finance. Generally, the money market is divisible under two sector - organized and

unorganized.

The organized market comprises Nepal Rastra Bank - the central bank and commercial banks.

It is called organized because the activities of commercial banks are systematically co-

ordinate by the central bank. The unorganized because Nepal Rastra bank does not

systematically co-ordinate the activities of these indigenous bankers and money lenders.

Therefore the institutions that operate in the money market in Nepal are basically Nepal

Rastra Bank and commercial banks and instruments dealt are treasury bills, commercial bills

and short-term bank loan. Treasury bill market is a major component of money market in

Nepal, started in the year 1961-62.

Nepal Stock Market :-

The Nepal Stock Exchange Limited popularly called NEPSE is the only Stock Exchange of

Nepal. It is located in Singha Durbar Plaza, Kathmandu Nepal. The basic objective of NEPSE

are to pass on free marketability & liquidity to the corporate government and securities by

facilitating transactions in its trading floor through member, market intermediaries, like

market makers, broker etc. As on November 2010, the numbers of listed companies are 266,

which include Commercial Banks, Hydro Power Companies, Insurance Companies and

Finance Companies among others. It is regulated by the Securities Board of Nepal.

11

There are 23 member brokers and 2 market makers, who operate on the trading floor as per

the Securities Exchange Act, 1983, rule & bye-laws. NEPSE operates on the ‘NEPSE

Automated Trading System ‘(NATS)’, a fully screen based automated trading system, which

accepts the principle of an order driven market. Trading on equities takes place on all days of

week (except Saturdays and holidays declared by exchange in advance). On Friday only odd

lot trading is done.

International Money Market :-

International money market is proving very significant for international perspective. The flow

of funds across the national boundaries through the medium of international money market is

an accepted reality. Computer revolution and modern developments of software has made the

world small in a way that financial transactions can be undertaken through the

communications networks and other interconnections and linkages with old money market

system. As this being the case, a wide variety of short-term and medium-term money market

instruments have come into use for serving the needs of international investors.

The most widely used instruments in international money market are syndicated loans and

Euro-commercial papers. Syndicated loan is a loan made by the consortium of banks to a

single borrower and it is priced as a spread above LIBOR (London Inter-Bank Offered Rate).

LIBOR is the rate that banks participating in international debt market charge to each other

for short-term loan. In most cases, floating rate is applied to reflect the current LIBOR.

Monetary Policies :-

Higher economic growth and employment along with economic stability are the objectives of

the fiscal and monetary policies. Fiscal policy is formulated and implemented by the

executives directly elected from the people, whereas monetary policy falls under the

jurisdiction of an autonomous central bank or a monetary authority that is free from the direct

intervention of the government.

The Monetary policy so announced covers the subjects like credit, foreign exchange,

microfinance, and regulation and supervision of the financial system. The provision of

announcing monetary policy enhances public accountability of the central bank and helps in

12

achieving the monetary goals. Monetary policy for the FY 2011/12 and its mid-term review

were made public on 21 July 2011 and 10 February 2012 respectively.

The monetary policy that has the strategy of attaining economic growth by ensuring

macroeconomic stability as envisioned in the Three-Year Plan has explicit objectives. These

include containing inflation by restraining monetary expansion, attaining favorable balance of

payments and contributing to growth through financial stability.

Banking :-

The Nepal Bank Limited was established in 1937. It is Nepal’s first bank. The government

owned 51 percent of the shares in the bank and controlled its operations to a large extent.

Nepal Bank Limited was headquartered in Kathmandu and had branches in other parts of the

country.

There were other government banking institutions. Rastriya Banijya Bank (National

Commercial Bank), a state-owned commercial bank, was established in 1966. The Land

Reform Savings Corporation was established in 1966 to deal with finances related to land

reforms.

In almost all the developing country, for a common, banking is mere a simple deposit and

lending centre. This is mainly due to the large gap between the rich and the poor where the

poverty amongst the poor never lets them to be facilitated with the banking as a whole.

Basically two factors governs it, first is the banks had limited vision to innovate the need in

the areas that suits the need for the common; at the second place nor did the customer had

knowledge how could s/he bank upon his needs. Apart from this, the banks vision was to

target the big which provides a logical sense to serve and earn.

The interesting facts of these banks are they work without the state support and grants, charge

interest rate from 18 percent to 28 percent on their credit and have managed to be profitable

with a handsome recovery rate, advocating micro-credit, arguing that it is only through

collateral-free credit, made available in particular to poor, and that poverty can be alleviated.

Financial Market:-

13

Foreign investment and technology transfer is essential to make the economy strong and

consolidated, dynamic and competitive, oriented to self-dependency with maximum

utilization of natural and human resources. Realizing this fact, Foreign Investment and

Technology Transfer Policy is waiting for the final approval.

The proposed policy has emphasized flow of foreign investment by bringing procedural

simplification in technology transfer in order to be competitive in World Market for utilizing

the comparative advantage of the private sector. Accordingly, a Bilateral Investment

Promotion and Protection Agreement have been initialed with India to promote Indian

Investment in Nepal, while preparation is being made to conclude such agreements with other

countries.

Capital markets are associated with raising capital or financial resources on a long term basis

directly from the public at large. Capital markets also allow for wider ownership among the

public, thereby distributing risks and wealth amongst smaller investors by providing an

effective vehicle for making investment choices as per the Investor’s preference of risk and

returns based on available information. As such, capital markets help the economy to

generate more savings and productive investments.

The growth of the capital market gained momentum with the establishment of the Nepal

Stock Exchange Limited (NEPSE). In 1993, the Securities Exchange Act was amended. The

Securities Exchange Center was converted into the Nepal Stock Exchange Limited for

securities trading by private brokers and the Securities Exchange Board was established for

oversight functions as a regulatory body.

14

ECONOMIC FACTORS

The Economic factors which would be studies as follows.

1) Inflation Rate

2) Interest Rate

3) Trade Deficit

4) Budget Deficit

5) Personal Savings Rate

6) Business Savings Rate

7) Gross Domestic Products

8) International Trade Statistics

9) Population Statistics

10)Other Factors

General increase in price of an economy& consequent fall in the purchase

value of money. An index of the price of goods & services in retail shops

purchased by standard households, spoken in percentage terms relative to a

found year which is in use as 100.

The amount charged for a loan, usually expressed as a percentage of the

figure rented. On the other hand, the amount paid by a collection, building society,

etc, to a saver on funds deposited again expressed as a % of the sum deposit. An

interest rate is the rate at which interest is paid by a borrower for the use of money

that they borrow from a lender.

Difference between the values of merchandise imported into a state to the

value of merchandise which is exported. An optimistic balance is known as a

trade surplus if it consists of exporting more than is imported; a negative balance

is referred to as a trade deficit or, easily, a trade gap. The stability of trade is

sometimes divided into a goods and a services balance.

The excess of government expenditure over government income which must

be financed by either by borrowing or by printing money. Government should run

budget deficit during recession in order to stimulate aggregate demand.

15

The Personal Saving Rate is the personal savings of the people from their

total Income. These savings are generally deposited in the bank in the BankSaving Account. The Saving Account is a transactional interest bearing account

wherein a deposit is placed with the Bank for an unspecified period of time and

depositor can withdraw or transfer the funds whenever required different means.

Businesses are also saving more following the financial crisis with savings

rates. This saving was preceded by high levels of savings, funded mainly by

balance due in each case. In both periods, businesses enlarged their saving to

repay debts and reduce their gearing ratios reflecting trends towards increased

household savings.

The monetary value of all the goods & services produced by an economy over

a specified period. Total goods and services produced by a nation during one year

excluding payments on foreign investments. The value of an economy’s total

output of goods and services, less in-between use plus point net taxes on products

and imports. GDP can be broken down by output, expenses or profits components.

The major expenditure aggregates that make up GDP are household final

consumption, government ultimate use, gross fixed capital structure, changes in

inventories, and imports and exports of goods and services. Readymade garments

are Nepal’s topmost export items to abroad countries, followed by woollen carpets

and pashmina goods. Other established export items to abroad countries are hides

and covering, lentils, metal and wooden handicrafts, agro- and forest-based

primary and secondary goods, leather, raw jute, large cardamom, red, tea and

medical herbs. Chocolate, sugar, terry towels, micro transformers, blanket and

button are emerging as new export items. Over the years, Nepalese imports have

increased considerably and undergone major structural changes.

The major import items include oil products, equipment and spare parts,

transportation equipment, pharmaceuticals, textiles, chemicals, electrical goods,

vehicles and spare parts, medicine and medical equipment, uncooked hair, betel

silly helicopter and spares parts, raw silk, clothes, fertilizers, telecommunication

tools, etc.

16

Age, arrangement, medium age, people growth rate, birth rate, death rate, net

immigration rate, urbanization, urban population, rate of urbanization, population,

sex ratio, at birth under 15 years,15-64 year,65 years, and over

total people, newborn mortality rate, life expectancy at birth, total productiveness

rate, major infectious diseases, nationality, cultural groups, religions, languages,

literacy, school life expectancy (primary to tertiary education),education

expenditures, maternal humanity rate, children under the age of 5 years

underweight, health expenditures, physician density, hospital bed density.

Economic Environment

Nepal's real GDP growth rate averaged 4.2% per year during 2004-11. It is still one

of the poorest countries in South Asia with about 25% of the population living below

the poverty line. Moreover, lack of diversity of its exports and heavy reliance on

remittances from abroad (over 20% of GDP) make the economy very vulnerable to

external economic shocks.

Nepal's annual average inflation rate reached double digits in 2009 mainly because

of supply disruptions – general strikes, road closures, and cartelizing of essential

goods and supplies, including food items – as well as swelling of domestic

consumption (over 90% of GDP) due to increased remittances inflows. Prices in

Nepal are also greatly influenced by inflation in India since the Nepali rupee is

pegged to the Indian currency.

Trade accounts for about 40% of GDP. Nepal has a narrow export basket, and its

export market is concentrated in a few countries, led by India. Between 2003 and

2010, the share of merchandise exports in GDP declined from 10% to 5%, while

imports more than tripled, pushed by increased consumption due to higher

remittances.

17

POLITICAL ENVIRONMENT

Nepal, the world's only Hindu monarchy, was controlled by a hereditary prime

minister ship until 1951. Before few years back, in Nepal there was a monarchy.

A monarchy is a governmental system that has one person as the permanent head

of state until he or she dies or gives up his or her position. Typically, the position of

monarch is hereditary, as is the case with famous monarchies like that of the United

Kingdom. The term is often used to refer to a system of government in which the

monarch — such as a king or queen — has absolute authority, but many monarchies

are limited or constitutional monarchies in which the monarch has restricted power

and might even is mostly a figurehead rather than a ruler.

Absolute Monarchy

In an absolute monarchy, the monarch has total authority over the government and

his or her people. A cabinet of advisers might be assembled to assist the monarch,

but members of the cabinet do not make the major decisions. This type of monarchy

has become increasingly rare, because many countries are wary of giving one

person unchecked power. The levels of the citizens' happiness under absolute

monarchies can vary widely, and such governments usually are closely scrutinized

by other nations.

POLITICAL CONDITIONS

1990–1996: Parliamentary monarchy.

Until 1990, Nepal was an absolute monarchy running under the executive control of

the king. Faced with a people's movement against the absolute monarchy,

King Birendra, in 1990, agreed to large-scale political reforms by creating

a parliamentary monarchy wiES``21

5th the king as the head of state and a prime minister as the head of the

government.

18

Nepal's legislature was bicameral consisting of a House of Representatives and a

National Council. The House of Representatives consisted of 205 members directly

elected by the people.

The National Council had 60 members, 10 nominated by the king, 35 elected by the

House of Representatives and the remaining 15 elected by an electoral college

made up of chairs of villages and towns. The legislature had a five-year term, but

was dissolved by the king before its term could end. All Nepalese citizens 18 years

and older became eligible to vote.

Governments in Nepal have tended to be highly unstable; no government has

survived for more than two years since 1991, either through internal collapse or

parliamentary dissolution by the monarch.

Nepal, the world's only Hindu monarchy, was controlled by a hereditary prime

minister ship until 1951.

The nation's first election was held in 1959, but in 1960, King Mahendra dismissed

the cabinet, dissolved parliament, and banned political parties.

A 1962 constitution created a non-party panchayat (council) system of government.

After a 1980 referendum approved a modified version of the panchayat system,

direct parliamentary elections were held in 1981

A dispute with India led to India's closing of most border crossings from March 1989

to July 1990, and the resultant economic crisis fuelled demands for political reform.

After months of violence, King Birendra Bir Bikram Shah Dev dissolved parliament.

The opposition formed an interim government in April 1990, and a new constitution

creating a constitutional monarchy and a bicameral legislature became effective on

Nov. 9, 1990. Multiparty legislative elections held in May 1991 were won by the

centrist Nepali Congress party; the Communists became the leading opposition

party.

In the politics of the day, business success depends on politics by a great

percentage and in many ways. Politicians are usually the people controlling the

19

operations of a government and will decide which countries to trade with as well as

the trading conditions.

CURRENT SCENARIO OF NEPAL – FULLY DEMOCRATICREPUBLIC

The struggle between absolute monarchy and democracy running for a long time in

Nepal has now taken a very grave and new turn.

It has become the need of the hour to establish peace by resolving the armed

conflict being waged for the past 10 years through a progressive political outlet.

Therefore, there is an imperative need for implementing the concept of full

democracy through a forward-looking restructuring of the state to resolve the

problems related to all sectors including as class, caste, gender, region, political,economic, social and cultural, by bringing the autocratic monarchy to an end and

establishing full democracy.

We hereby make it public that in aforementioned context the following Understanding

has been reached between the Seven Political Parties within the Parliament and the

CPN (Maoist) through negotiations.

The democracy, peace, prosperity, social advancement and independent, sovereign

Nepal is the principal wish of all the Nepali people today.

We fully agree that the autocratic monarchy is the main hurdle in achieving this wish.

We have a clear opinion that the peace, progress and prosperity in the country are

not possible until full democracy is established by bringing the absolute monarchy to

an end. Therefore, an understanding has been reached to establish full democracy

by bringing the autocratic monarchy to an end through a nationwide democratic

movement of all the forces rising against the autocratic monarchy from their

respective positions.

20

ECOLOGICAL ENVIRONMENT

China, India, USA and Pakistan, were four major cotton producing countries which

accounted for approximately three-quarters of world's cotton production. The biggest

cultivators of cotton are America, India, China, Egypt, Pakistan, Sudan and Eastern Europe,

with China, US and India being the three largest producers of cotton.

India has the largest area under cotton production. China is the largest producer of cotton in

the world, whereas India is the second largest. Output of cotton has increased significantly in

developing countries like China, India, Brazil and Pakistan in recent years whereas in

developed countries like USA and Australia, it has declined marginally.

Among the consumers China leads the way being followed by India, Pakistan, US and

Turkey. Developing countries consumed a major proportion of global cotton output since

2000s.

China is the largest cotton producer, consumer and importer. The top consuming countries

after China are India, Pakistan, Brazil, USA and Bangladesh. India has been rapidly gaining

export market share. Today India, with ample stocks and higher production, is expected to

continue to expand its share of the global export market. China having only half the area of

cotton production as compared to India, produces one and-a-half times more cotton, has one-

and- a-half times the world market share and three times the yield.

Global 2012/13 cotton production is estimated to decline 4 percent from the previous year to

119 million bales. The estimated crop decline is the result of reductions in the major southern

hemisphere producing countries and India, partially offset by increases for the United States,

the African Franc Zone countries, and China. World 2012/13 area harvested is estimated at

34.1 million hectares, down 4 percent from the preceding year. However, planted area fell

sharply, due mainly to labor shortages and the availability of more attractive cropping

alternatives.

India’s 2012/13 production is estimated to decline 7 percent from the preceding year to 25.5

million bales, reflecting reductions in both harvested area and yield. Harvested area by the

world’s second largest producer is estimated at 11.7 million hectares, down 4 percent from a

year earlier and the highest year-to-year percentage decline in a decade.

21

World cotton consumption is expected to increase by 3 percent in 2012/13. Relatively good

global economic growth has resulted in stronger textile demand. Imports in the rest of the

world are forecast to increase by more than 30 percent.

The accumulation and distribution of world stocks is distorted by the developments in China.

World stocks are forecast to increase by 12.9 million bales to 81.9 million bales, a record

both in volume and as a percent of world use. But with more 13.5 million bales of growth

projected for China and the United States combined, stocks in the rest of the world are

forecast about even with last season.

Global 2013/14 cotton production is projected at 115.5 million bales, down 3 percent from

the previous year. Relatively lower cotton market prices are expected to cause a shift in

cultivated area from cotton to more profitable alternatives. World 2013/14 harvested area for

cotton is projected to decline nearly 3 percent from a year earlier to about 33.0 million

hectares.

India, the world’s second largest cotton grower, is projected to produce 26.0 million bales in

2013/14, a 2-percent increase from the previous year. While planted area is expected to

decline slightly, recovery in yields from 2012 is expected to support production. World

cotton consumption is projected to rise 2.6 percent to 109 million bales in 2013/14,

stimulated by growth in world GDP, which is expected to accelerate slightly in calendar 2013

and again in 2014.

High cotton prices, relative to manmade fiber prices, during the past year have resulted in

fiber substitution at the mill. Cotton’s fiber share is expected to improve slowly into

2013/14, thus providing a slight growth projection for cotton mill consumption.

Imposition of ban on export of cotton yarn by India has hit Nepali domestic hosieries and

textile industries hard as it has led to an acute shortage of raw materials. Nepali domestic

cotton industries, mainly hosieries and small garments that depend on Indian cotton yarn have

been totally affected and forced to close their operations with the shortage of raw materials.

Nepali textile industries have been depending on the Indian cotton yarn to supplement the

local demand for cotton.

Most of the small readymade garments, Dhaka industries and hosieries that use cotton thread

have been forced to close their operation since the southern neighbor imposed ban to ease the

shortage of cotton in domestic market.

22

India produces finest and beautiful cotton fabrics since time immemorial. India, being

the country in the world for cotton production and manufacture of cotton fabrics, has led

today’s first in cotton cultivated area and second in production among all cotton

producing countries in the world next to China. The cotton cultivation sector not only

engages around 6 million farmers, but also involved another about 40 to 50 million

people relating to cotton cultivation, cotton trade and its processing.

Cultivation of hybrids, BT cotton varieties, latest production technology and plant

protection technologies, adoption of scientific and agronomic practices by farmers,

increase in area under irrigation, Government policies on R&D and price support are all

responsible for the present drastic changes of Indian cotton scenario to its present

position.

Since launch of "Technology Mission on Cotton" by Government of India in February

2000. All these developments have resulted into significant quantitative increase in

cotton production and country has become self-sufficient in cotton production barring

few years. The yield per hectare is about 300 kg/ha for more than 10 years, has

increased substantially and reached a level of 554 kg/ha in cotton season 2007-08.

Introduction of high yielding varieties and hybrids and improved agronomic practices

are mainly responsible for the increased production. The textile industry in India is one

of the largest industries in the country. During the last two decades, there is a

phenomenal growth in this sector in terms of installed spindle and yarn production,

installation of open-end rotors and setting up of export-oriented units.

The Indian government has been actively participating in the growth of cotton industry

and government agencies like Cotton Corporation of India (CCI) and state marketing

federations, committees and institutions like Genetic Engineering Approval Committee

(GEAC) and the Central Institute of Cotton Research (CICR) play an active role in the

development of cotton industry. There has been a marked improvement in the quality of

Indian cotton over the years and Indian cotton is now far more acceptable in

International Markets.

23

Population Growth, Resource scarcity, increasingly extreme climate change impacts and

Spread of (ICT) Information Communications Technology are impacting the future

cotton production. There are four major cotton species of cultivated cotton, of which

two are Diploid (Gossipier Arboretum and Gossipier Herbaceous) and two Tetraploid

(Gossypium Hirsutum and Gossypium Barbadense).

The diploid species referred to as the ‘Desi’ cotton, having low productivity and low

quality cotton, contributes 25 - 30% of the country production. The Tetraploid variety

contributes remaining 70% of the cotton production in India.

India is the only country to grow all four species of cultivated cotton Gossypium

arboreum and herbaceum (Asian cotton), G.barbadense (Egyptian cotton) and

G.hirsutum (American Upland cotton).

The country is divided into three main cotton growing zones, the northern zone majorly

produce G.hirsutum and G.arboreum species, the major central zone majorly produce

G.hirsutum, G.arboreum and G.herbaceum species, the Southern zone majorly produce

G.hirsutum, G. arboreum, G.herbaceum and G. barbadense.About 70% of total cotton

production is accounted by the states of Gujarat, Maharashtra and Andhra Pradesh.

Cotton is grown in different seasons in different countries. Among major countries, US,

India and Pakistan have similar seasonality. Most of the countries harvest cotton in the

second half of the year. Cotton is harvested early in India and US compared to other

major producers.

Elevated CO2 levels in the atmosphere of up to 650 ppm and temperature of 40º C was

found to be optimum for cotton plant growth. It thus appears that cotton will benefit

from the changed atmospheric scenario during the later part of the 21st century. Though,

research in India indicates that the impact of climate change on cotton production and

productivity will be favorable.

The reduction of snow and ice in Himalayan and Tibetan Plateau glaciers will decrease

freshwater availability for irrigation, particularly in the large river basins in northern

India. In the southern zone, both rain-fed and irrigated cotton are grown, including high-

quality long and extra- long staple cotton. The climate is adverse at sowing season, with

24

high temperatures, and the growing period is limited to six months. Water availability

for irrigation is a big issue in the northern zone.

The Government of India (GoI) has endeavored to promote domestic cotton production,

processing as well as consumption. CCI is striving its best to achieve the laid-down

targets in respect of development of market yards and modernization of ginning &

pressing factories.

These targets of IXth Plan period have already been achieved and the projects targeted

through the Xth Plan period, are at different stages of completion. The broad objectives

of the four Mini Missions are as under: Mini Mission I, Mini Mission II, Mini Mission

III and Mini Mission IV.

March 11, 2012: India has reversed a ban on cotton exports. There was an angry

reaction from farmers when the government announced the policy. The government

justified the ban by saying that India needed to protect supplies for its own cotton mills.

The ban is India's latest effort to balance export revenue against the needs of its textile

industry.

The Agriculture Produce Marketing Committee (APMC) is the primary market

infrastructure in the country through which cotton is marketed. The main functions of

these markets or mandis is to regulate market practices such as weighing, process of

sale, method of grading, payment process, etc. APMCs also provide facilities for

storage, boarding and lodging for buyers, sellers, etc. This committee charges 1% of the

goods value as fees from the buyers.

Although the Government has taken steps towards sustained development of the cotton

industry in the declared Fibre Policy, there are few key issues, like Cotton contamina-

tion, Lack of infrastructure, Problem of admixtures, Government Cotton Policy

Interventions, Competition from other fibers, Branding initiatives, Need for stronger

Indian arbitration for imported cotton which require stronger efforts.

Some such social and environmental impacts that are critical to be internalized in the

real economic value of cotton, include the cost of water treatment that has been polluted

25

due to the use of pesticides; the decrease in net available water due to water pollution,

and the health hazards and cost of treatment that affect the farmers and others due to the

use of pesticides. Pesticide, Fertilizers, Water and Increased Soil Salinity are the key

environmental issues related to cotton production.

As per the data provided by the agriculture department of Gujarat, cotton covered 2.96

million hectares area in this Kharif season, last year it was 2.63 million hectares in

Gujarat. Cotton sowing has increased from last year’s 17.48 million hectares to 17.95

million hectares this year as per India’s data provided by the department of agriculture.

26

SOCEIAL ENVIRONMENT

Social Policy in Nepal

In Nepal, where poverty and pervasive and social norms often render children

voiceless, social policy is about bringing children’s voices, rights and well being to

the centre of policy making.

The government has its commitment to including the perspective of children in

national negotiations nearby the development of policy. In addition, children are

finding new outlets for meaningful participation such as child clubs, listeners’ clubs,

and consultations with policy makers.

Strengthen the capacity of national partners to develop and implement policies,

legislation and budgets aimed at promoting children’s security and advancing

children’s rights as enshrined in the CRC. (Convention on the rights of child).

Increase capacity of policy makers, parents and the media to understand and act on

issues relating to women, children, young people and disadvantaged communities,

by helping children to be child rights promoters, and supporting Facts for Life and

Saathi Sanga Manka Kura and listeners’ groups, peer educators and similar youth

groups.

Increase capacity of policy makers, parents and the media to understand and act on

issues relating to women, children, young people and disadvantaged communities.

Improve knowledge-generation capacity and systems, such as the Poverty

Monitoring and Analysis System (PMAS), among key partners, provide access to

disaggregated information on children and women, by documenting best practices,

conducting strategic evaluations and studies with stakeholders, and supporting the

Central Bureau of Statistics.

Ensure that UNICEF and key partners have the plans, coordination mechanisms,

knowledge and skills necessary to meet the immediate needs of children affected by

humanitarian emergencies and natural disasters.

27

Languages of Nepal

Language spoken and written in Nepal

In Nepal there are approximately 120 languages belonging to the Indo-

Aryan,Sino-Tibetan,Austro-Asiatic and Dravidian language are spoken and

written. The major language which is official in Nepal is Nepali and it is formely

called khaskura and then Gorkhali. According to the 2011 census in Nepal there

are around 25 million native speakers in Nepal and it is spoken as a second

language be millions more other people. The official and most important. In

Nepal the Indic language is constituted by 79% of the population where as the

Tibeto-Burman is constituted by 18% of the population.

Classification of languages

Major languages in Nepal

Nepali

Maithali

Bhojpuri

Tharu

Tamang

Newari

Magar

Awadhi

Bantawa

Gurung/tamu

Nepali

Nepali is the major and official spoken language of Nepal. It is also spoken in

some parts of Myanmar and some parts of India mostly in Sikkim. According to

History of Nepal this language was first called Khaskura(language of rice(Khas)

farmers) then Gorkhali(language of Gurkas). Around 2/3 of the total population

of Nepal speak Nepali as a native and official language. Nepali is now used by

the Nepal’s government as the everyday language .

28

Maithili

This language is spoken in mithila region of eastern region of Nepal and

northern of India. Maithili has been classified by linguistic as one of the Indo-

Aryan language. According to the 2001 census Maithili has 35 million native

speakers in the world. It is the 2nd most spoken language of Nepal(12%).

Tharu

This language is the eastern zone Indo-Aryan language or cluster of languages

spoken by the Tharu people. This language is divided into various parts like

Dangaura,Kthoriya,Rana’s and Buskas and is spoken by 1.3 million of the total

Neapali population.

Tamang

Tamang is devnagri language and is spoken as a dialect in most parts of Nepal

and Sikkim. It also comprises Eastern tamang, Western tamang, north-western

tamang and south western tamang.

Tamang language has been divide into the following dialects:

Eastern Tamang: 759,257 in Nepal (2000 WCD). Population total

all countries: 773,257

Western Tamang: 322,598 (2000 WCD)

Southwestern Tamang: 109,051 (1991 census)

Northwestern Tamang: 55,000 (1991 census)

Eastern Gorkha Tamang: 3,977 (2000 census).

Nepal Bhasa

This language is one of the most and important language in Nepal. Nepal bhasa

was Nepal’s administrative day to day language from 14th to 18th centuries.

Today Nepal bhasa is spoken as a mother tongue by the Newars and the

Indigenous and inhabitants of Nepal Mandala and this constitute Kathmandu

valley and surrounding regions. Nepal bhasa is also spoken in India mostly in

Skkim where it is one of the 11 official languages. Nepal bhasa is greatly

influenced by Indo-Aryan languages.

29

Magar

This language called Magar or Manger is spoken in some parts of Nepal, some

parts of Sikkim, Darjeeling in India. Magar is divided into two groups Eastern

and Western. In Nepal around 770116 speak this language.

Awadhi

This language Awadhi is an eastern Hindi language and is considered as a

dialect of Hindi and Urdu. Awadhi is mostly spoken is Awadh(Oudh) region of

UP,MP and Nepal.

Bantawa

The Bantawa language it is a rare language group. It is a Tibeto-

Burman language, Eastern Kiranti languages family, spoken in the eastern

Himalayan hills of eastern Nepal by Rai racial groups.

According to the 2001 National Consensus, at least 1.63% of the Nepal's total

population speaks Bantawa. About 371,056 speak Bantawa Language mostly in

eastern hilly regions of Nepal (2001).

Gurung/tamu

Gurung language is spoken by the gurung people in Nepal. In two dialects with

mutual intelligibility. Total number of gurung speakers in Nepal is 227918 (1991

senses) , gurung language has two versions eastern and western version.

Proportion of languages spoken in Nepal

Nepali is the official language of the people of Nepal and speaks 47.8% of

population. Maithali (12,1%), Bhojpuri (7,4%), Tharu (5,8%), Tamang (5,1%),

Newari (3,6%) and Awadhi (2.4%) (CIA-The world fact book, 2008). Multiple

ethnic groups speak more than a dozen other languages in about 93 different

dialects. English is spoken by many in government and business offices in

Nepal.

30

Religions in Nepal

In Nepal religion occupies an integral position in Nepalese life and occupation.

Nepal is the only country which is stated as one of the Hindu state all over the

world. According to the 2001 census 80.6 % of the Nepal population is belongs

to the Hindu religion,10.7% Buddhist, 4.4% Muslims,3.6% are Kirat, 0.5% are

Christians, and 0.4 % belong to other groups. the Hindus in worshipped at

Buddhist temples and Buddhist worshiped at Hindus temple is of the principal

reason believer of these two leading groups in Nepal busy in any obvious

religious conflicts and because of this twin faith and religious practices and

common respect between these two groups the difference between Hindus and

Buddhist is very academic in nature in Nepal.

In Nepal according to the geographical allocation of religious groups exposed

that in each region of Nepal there are almost 87% of the Hindu population and

the largest portion of Buddhist population are found in the eastern hills, the

Kathmandu valley and the central Tarai and in each area around 10% of the

Buddhist population is prevailing.

Religious tolerance and harmony which is found in Nepal is of the unique

example for this world. The first people who set their foot in Nepal were the

Aryans. The Aryan’s beliefs are recorded in the Vedas is the collection of over

one thousand religious hymns that were to form the foundation of the

polytheistic religion of Hinduism. In Nepal Hinduism had a trinity of three Gods-

Brahma( the creator), Vishnu(the preserver) and Shiva ( the destroyer) Vishnu

and Shiva are very important to all the Nepalese Hindu population. The

Nepalese Hindus choose one particular God as their favorite Deity to be

worshipped daily.

31

The proportions in Nepalese religion is as follows

Hinduism 86.51%

Buddhism 7.78%

Islam 3.53%

Christianity, Tantrism & others 2.17%

Discrimination to un touchability

The legacy of the caste un touchability system of Nepalese society under which,

social discrimination could not be left over. Due to these legacies, a unit of the

society is far behind the normal of political, cultural, economical and health

rights provided by the state. It is hard to find out the proper history of the caste

system in the Nepalese society, though the strength of caste discrimination by

Hindu traditional values is appear very little period or from the order of

Jayasthini Malla in the Kathmandu Valley caste system was highly prioritized to

realize in all the section of Nepalese society.

Castesm

Various types of supremacy such as social injustice, economic injustice and

untouchability the major issues upon land less Dalit then after Haliyas. It can

Subdivided as Khali Pratha, Baiger Pratha, Khanamana Pratha, Bhokechhak

Pratha, Olke Pratha, Doli Pratha, Betha Pratha, Jamare Pratha, Naligadne

Pratha are as part of discrimination. All these Pratha are documented as caste

based livelihood. All Malik dependent Dalit are practiced these Pratha alone as

caste based. drama the caste based work of Malik, they get small bit of land for

home and agricultural work, some gets loan, and some Haliyas performe talent

work. All these Pratha are burdened upon land less Dalit which is types of

slavery or bonded labor.

Violence

32

Violence can be defined in multiple ways. For our purposes, we define it as the use

of physical force to injure somebody or damage something. Violence is common in

many countries all over the world. In Nepal, the most common types of violence are:

Political violence

Violence against women and children

Violent fights within families or between friends or strangers.

Violence against the government

Violence by the government administration towards the people

Political violence may occur between members of different political parties who differ

over ideology, who was rightly elected to a constituency or which party can seek

support in a village. Violence against women may occur because new husbands are

angry that their dowries are too small, and against children because parent become

impatient with them. Police brutality is another form of violence, where police harass

innocent people or where people are killed in police custody.

The widespread availability of cheap country liquor makes it accessible for people

from all economic classes to drink regularly. The fact that alcohol is addictive

increases people's desire to drink. Sometimes alcoholism can cause people to

commit violence.

Crime

Crime can be defined in many ways, for our purposes we define as an act

punishable by law. It can take many forms, such as organized crime like girl

trafficking, gold smuggling and terrorism, and smaller-scale crime, like stealing,

prostitution, bribery, murder, pick pocketing and rape. Although certain types of

crime, such as the violence described in the previous section, is just as common in

villages as it is in cities.

Crime is a problem that many countries face. Many governments are challenged with

deciding what types of policies to implement to prevent crime. Sometimes

governments approach crime by imposing strict laws and strong punishments

against wrongdoers. Other governments address crime as a social problem. They try

to address the causes of crime, such as low education levels, poor family structures,

33

poverty and low moral values.. Before any government can make a good decision on

what types of policies and social programs to implement, officials must understand

the reasons for crime.

Drug peddling/smuggling

there is a difference between a drug and a medicine. Medicines are meant to help

you and can help cure many illnesses. Drugs, in contrast, can be addictive and

harmful to you and those around you.. Because drugs can be so addictive, once

people start taking them it is difficult to stop.

Some examples of drugs that can be harmful include:

Ganja/Cannabis

Heroin

Smack

Cocaine

Alcohol

Glue Solvents

Opium

Girl trafficking

Is one of the key challenges facing Nepal. Innocent Nepali women and girls of

different castes or communities from different regions of Nepal are taken out and

forced into prostitution. The girls are either bought from their parents or brothers,

deceived, or pushed into leaving their homes. they are forced into spontaneous

servitude. Most of the women and girls who are trafficked are from poor families in

rural areas. They leave their homes in search of a better life. A family member or

other person may promise them a job in a distant place or a man may come to the

village and marry the girl only to sell her later into slavery. Many women and girls

who are trafficked contract a deadly virus called HIV/AIDS. Many people have never

heard of HIV/AIDS and do not know what it is or how they can bond the illness.

34

Culture of Nepal

Nepal has over 72 Ethnic Groups and about 100 spoken languages are

originated inside the country. As the country's groups of people are so varied,

each group follows their own customs and traditions even for festival

celebrations, rituals and eating foods. For ex., Group known as "Brahman" are

said to be refrained from drinking Alcohol and Buffaloes meats mainly

because many of the priests are Brahman who consider that such

commodities to be contaminated to mind, body and soul.

The country's population is about 27 million. The most settled city is the

capital, Kathmandu.

Nepal is a Hindu Kingdom other than has at the present become a Secular

Nation. King was assumed to be as the reincarnation of Vishnu God and any

Nepalese would love him.

Music of Nepal is musical though the current tune is a combination of beats

from the Western Countries Like USA and the Neighboring country India.

Population of the Nepalese who feel for the true beats of Nepali Music - the

folk songs played using a flute and a drum called Modal.

Nepalese love arts. That shows in their job in temples and monuments and

even at the houses. One such art rich city is the Patan of Kathmandu Valley

where one can witness various forms of arts such as wooden arts, stone arts,

and paintings.

Festivals are more than now holidays for Nepalese. They are the moments of

dedication to worshiping Gods and Goddesses and keeping family and values

together

The country is extremely varied in its geographical position, all Nepalese do

not share similar culture.

Nepal is typically divided into three regions Terai, valleys and Himalayas.

People of Terai share like culture that is set up in India, because of its

convenience to the India section.

35

Cultural considerations in Nepal

In Nepal there is a rich cultural history because of the Nepal’s vast diversity in

altitude. In Nepal many of the ethnic groups have their own culture, language

etc. Most of the customs belong to the Hindu and Buddhist traditions.

In Nepal affection between men and women even married identification selfdom

expressed, public kissing, hugging and hand- holding are offensive to most

Nepalese and a sign moral. But it is acceptable for two men to walk hand in

hand. Baksheesh is an extra payment for a service performed and is usually

given to porters or laborers at the end of the job. It can be money or clothes or

anything else and there is no set rate.

Bargaining is to be expected. Don't bargain if you're not really interested. If your

price is accepted, don't try to back out, and don't try to get an even lower price.

Bathing in the hills is very conservative.

Men should wear shorts women should wear a lungi pulled up under the arms.

Clothing is conservative. Men should not go bare- chest and shorts should be

conservative. Women should avoid bare shoulders halter tops, and shorts. Ties

and suits are not necessary except for special occasions.

36

Nepal

Customs and traditions

Take off shoes

Take off the shoes before entering a temple or one's home.

permission

Ask over for permission before entering a Hindu temple.

permission

Taking photographs inside the most temples are considered prohibited. We have to

ask for the permission it also applies to Nepali people also.

friendly

Nepali people are of friendly by nature. They Have a true interest in them. They are

friendly and talkative.

offensive

Public displays of affection such as kissing may be considered offensive. Or illegal In

Nepal.

Namaskar

They are saying Namaskar if anyone is initiating a dialogue with someone. The form

of greeting in Nepal is or Namaskar. To do Namaskar by hand, join your palms

together, bring few inches below you chin facing upwards.

handshake

Nepali may agree to handshake offered by both sex male and female, but never offer

your hand first to women. as a substitute you do `Namaskar' It’s considered rude for

a man to touch a women even shaking a hand.

Khana Khanu Bhayo? –

37

Nepalese may ask you in Nepali, Khana Khanu Bhayo (have you eaten) . is a form

of greeting . So go ahead say you eat one (Khaya)' if you are busy, or they will have

you joining their dining table if you say (Chaainaa)

Nepali friendship

It is common to see same sex walking together hand in hand or with arms around

each other. When someone talks to you and taps you while talking to you consider

that the person is trying to get your attention - it’s a Nepali friendship way.

Pointing your finger

Pointing your finger at people is considered rude it means stay and I will have

something against you If you have to aim at someone.

offer food.

When you are in a Nepali dining table, there is frequently the senior member of the

family, usually a female, serving to everyone. She will repeatedly offer food.

Consider it as a respect, do not get hurt, take a modest and say thank you. In Nepali,

usually the mother eats last and she makes certain that everyone eats and eats well.

Elders

Are called by their name but not by their names. Never call your daddy by his name

not call your mummy by her name, it's considered bad. When you visit your friend's

parent, you also don't use their names

Shopping

in Nepal start by bargaining. Most products don't have price tags, so you are

expected to haggle with shop owners. Don't buy anything without bargaining or if you

suffer that extra dollars of yours would not harm poor Nepalese go ahead give your

best shot. Bargaining is common for buying things like vegetables, groceries, riding a

cab, buying gift items such as Nepali Kukuri, Carpets, and just about anything really.

Calling

38

people by names like Dad, Mum, Sister, Brother, Uncle is very ordinary. For ex., you

say `Amaa' (Mother) or Buba (Dad) to your friend's parents but never call them by

their names.

Never

tell a girl you don't know that she is beautiful or praise on her kind. Girls consider it

rude and offensive they will thought you are flirting with them.

Slurping

is ordinary to swallow tea or other drinks in restaurants and homes.

Fat

If you tell someone he or she is fat, it's a compliment. Say it in Nepali "Tapai Kastoo

Moto HooNuuHunChaa". Nepalese like that and most Nepalese like to be called fat.

When someone has a big fat stomach, it means they have got a lot of money to eat,

it. Most big fat bellies in poor countries do walk proudly.

Sharing a meal

You always ask someone around you if that person wants’ to share your meal. If you

get a snack to work, you always ask your colleague if they would like to have a bit

out of it. When a Nepali family prepares a special meal at home, sharing a meal

makes them feel good about it. This is very common especially in villages in the

country.

Nothing

in Nepal works on time. Don't expect promptly. local buses don't run time, road

traffics are random, and I didn't know about the meeting time - the kind of excuses

you will hear from someone who shows up late in Nepal. Did you know that it takes

hours just to pay your Electricity Bills, forget about paying your telephone Bill it might

take a whole day of waiting in a line Nepali Topi is the national cap of Nepal - it's

rather the part of the national dress for

39

Greetings

Men greeting women all meetings generally with palms pushed together at around

chest level and saying “NAMASTE” which means “I salute the god , or goddess in

you”, handshakes are common after initial Namaste , for those with familiar or

western cultures.

Women greeting women- all greetings are also usually begin with palms pressed

together around chest level and saying “Namaste”. Here also handshakes are also

common in recognizable or western cultures.

Greetings between men and women – all meetings normally begin with palms

pressed together around chest level and saying “Namaste”. It’s best for men

initiating a handshake with Nepalese women as this may be considered rude ,

especially in villages

'Namaste' (pronounced Namaste) or 'Namashkar' is the accepted form of

greeting and introduction amongst Nepali people.

Meaning: In everyday greeting Namaste or Namashkar means 'I bow to the

divinity in you'. In Hinduism and Nepali culture, it is believed that God resides in

all living beings and hence the form of greeting.

In meetings, or conferences, Namaste or Namaskar to participants or those

present means ‘May your mind and my mind/thinking come together and may

this meeting/conference be a successful one.

However, within the Gurkha military community, soldiers may sometimes use

'Ram, Ram hajur' as a form of greeting with each other (male to male only).

Lord Ram is considered the 7th

incarnation of Lord Vishnu and greeting one with

the Lord’s name is considered auspicious.

Note : When a Nepali is introduced or greets another Nepali it is normally done

so with a Namaste/namaskar. Nepali men may choose to shake hands with

each other but when introduced to a woman they will exchange

Namaste/namaskar. However, if a person from another country extends his/her

hand on introduction then a Nepali man or woman will accept it although many

Nepali women may feel slightly uncomfortable shaking hands with a male.

40

Important note:

Always use right hand when shaking hands.

You may accept handshakes offered by both the sex male and female , butnever offer first hand to women.

Instead you do “ Namaste” is considered as rude for men for touchingwomen’s hand

Handshakes are gentler than strong, so don’t feel the person interested if thegrip is weak, it’s just their way.

Do not eat from other people’s plate and do not drink from other people’s

bottle or glass. It is considered impure by the Nepalese.

Never touch anything with your feet. This is considered an offence among

Nepalese.

While traveling dress appropriately. Women should especially avoid dressing

in skimpy outfits.

Leather articles are prohibited to be taken inside the temple prenict.

Walking around temples or stupas is traditionally done clockwise.

Take photographs only after receiving for the object or person being

photographed.

41

Clothing in Nepal

What kinds of clothes the Nepali people wear

Nepal is a home to a variety of religions, ethnic groups and different climates. This

has lead to significant variations in Nepalese dress, both historically and in modern

era The dress in Nepal is influenced by nearby countries including India, china ,

Pakistan Bangladesh, Shrilanka and Bangladesh bepali clothing remains

independent uniqueness with garments specific to the cultures of Nepal.

Men’s clothing

Traditional men’s clothing consists of daura suruval or labeda-suruval. This garment

consists of a long tunic or vest over pants. The vest or tunic has five pleats and eight

ties, each with religious significance. The pants fit quite loosely through the hips and

crotch and are then quite fitted from the knee to ankle. A wool hat which called as

topi, completes the traditional outfit. Topi is also worn with the western men’s dress

, especially in the cities.

Women’s clothing

Women in Nepal wear sari (type of garment) called a guniu. The guniu can be woven

from cottons or silk fabrics. In Nepal, the sari is commonly draped around the waist

and worn with a separate shawl like garment on the upper body. This style of draping

is called Haku patasi.

Sherpa Dress

Traditional Sherpa dress consists of a knee-length coat woven of yak wool. This

garment is similar for both men and women and is worn with yak wool pants. Boots

made of yak hide and packed with dried grass for warmth were traditional. Many

Sherpas have opted for Western dress, as well as cowboy hats and boots.

42

Traditions in Nepal

Nepal has a wealthy cultural as well traditional influence, the main influence in

Nepal is Hinduism, and the secondary is Buddhism . Due to Hinduism it had a

rich culture of festivals belonging to all gods, goddesses, clothing, food etc.

Traditions are the religious rituals which are to be followed by the people of

Nepal. As it has a sole variety for following traditions they are as follows.

They are as follows

Nepal is known for its continuous festivals. Nepalese are said to view more

festivals than there are days in the year. Some of the major and interesting

festivals are presented below.

Navavarsha : The Nepalese New Year's Day usually falls in the second week of

April. i.e. the first day of Baisakh. The day is observed as a national holiday. The

people celebrate it with a great pomp and show. On this occasion, Bisket Jatra is

held in the city of Bhaktapur.

Baisakh Poornima : (April-May) As Nepal is the origin of Lord Buddha, the Light of

Asia, the triple anniversary of the Buddha's birth, enlightenment and death is

observed with many colourful ceremonies on this day. People celebrate the occasion

with great worship paying homage to Buddha at places like Swayambhunath and

Lumbini.

Red Machchhendranath Rath Jatra : ( May -June ) This festivals is the major

socio-cultural event of Patan. The wheel chariot of a god known as Bungdyo or red

Matchhendranath is set at Pulchowk and dragged through the city of Patan in

several stages till it reaches a prescribed destination (Lagankhel) . The grand finale

of the festival is called the 'Bhoto Dekhaune'. ' . A similar kind of chariot festival of

Machhendranath (White) is also held in Kathmandu city in the month of March-April.

Dumji : It is celebrated in the Sherpasettlement in the month of July. The Sherpas

of Khumbu and Helambu regions participates in dancing on this day .

43

Gaijatra (Cow festival): (July-August) it is a festival of festival enduring eight days.

Dancing, singing comedy no matter etc which that caused amusement and laughter

are its highlights.

People whose family members have died during the years send out persons

dressed up as a cow to display the main thorough welfares of the city.

Krishnastami : ( July-August ) It results the birthday of Lord Krishna, one of the

incarnations of Lord Vishnu. On this day, an striking ritual at the lord Krishna Temple

in Patan and Changu Narayan take place.

Indrajatra: this festival comes in august - september The festival of Indra, the God

of rain, is observed with great obsession in Kathmandu Valley. The festival is

celebrated in August-September lasting for eight days. The chariot of Kumari, the

Living Goddess in present taken out in March through the main streets of

Kathmandu. The festival is particularly noted for the echoes of drums and dancing

feet of the veiled dancers at evening.

Vivaha Panchami : this festival comes in November-December is a well-known

festival of Janakpur of Dhanusa area in the east. This occasion commemorates the

marriage of Sita to Ram, which is one of the most valued Hindu religion.

Birthday of His Majesty the King : The auspicious birthday of Majesty King

Birendra Bir Bikram Shah Dev falls on December 28/29 (Poush 14th). This occasion

is celebrated with great enthusiasm all over the empire.

National Democracy Day : This day is formally celebrated as Rastriya Prajatantra

Divas or National Democracy Day (it generally falls on February 18th i.e. 7th of

Phagun as a mark of respect to the people's revolution of 1950-51).

Maha Shivaratri : (Fabruary) Shivaratri or the night of Lord Shiva, is observed in

February - March. It is celebrated in admiration of Lord Shiva. A great religious light

takes place in the Pashupatinath Temple and thousands of people from all over

Nepal and India visit the temple.

Ghodejatra : (March-April ) Known as the festival of horses, is one of the most

exciting festivals of the Kathmandu. Horse race takes place at Tundikhel on this day.

44

In other parts of the city the various deities are carried shoulder-high on wheelless

chariot with the supplement of traditional music.

Tihar

Tihar is a five day Nepalese festival celebrated at the ending of autonum . One

of these days incorporates the Hindu festival diwali , all the ethnic groups

celebrate as well as newar’s .

The festival is celebrated from traydoshi of kartik Krishna to kartik shukla

second every year. The name tihar means the festival of lights , many candles

are lightened , this festival is considered as of great importance as it shows the

reverence not simply to humans but also to god’s and goddess . and also to all

the animals such as cow as well as dog who maintains strong relationship with

humans.

Kag puja (festival of crow)

The first day of the festival is called as kag puja or kag parva it is the festival is

called as worship of crows. The crows are worshipped by offering sweets and

dishes .

the crowing of crows symbolizes the sadness and grief in hindu mythology , so

the devotees offer sweets or food to avert grief and deaths in their homes.

Kukur puja

The second day is called kukur puja or khicha puja , ot the puja by newars.

Here it is a festival to worship of dogs which are belived to be a messenger of

lord yamraj (god of death), it is worshipped once a year , people offer garland

delicious food to the animal , and this festival is also called narak chaturdarshi.

Gai (cow)puja and laxmi puja

One of the morning of third day is gai puja meaning worship of cows , cow is

belived to be a mother of human according to hindu mythology. So they

worship with tika, by offering food and fruits on that day.

45

At the evening laxmi (godess with wealth) is worshipped as this day is called

laxmi puja , the godess is belived to be enter the brightest house and to give her

blessings , making the family healthy and prosperous .

Gobardhan puja and maha puja

At the fourth day of tihar gobardha puja is performed it is a worship of lord

Krishna , people who follow krisha perform this ritual , it is worshipped towards

cowdung it is seen a svery useful in nepal , as in the olden days it was used a

light for evening by bewar community . social workers, children, and young visit

local homes the home owners gives those fruits and delicious fruits .

Bhai tika

This is the fifth and last day of tihar a day where sisters put “tika” or tilak on

forehead of their brothers to ensure long life , and thank them for their

protection when sisters give tika the brother give money or gifts as return . a

special garland as made for brother by them out of a flower that wilts after a

couple of months which symbolizes the sister’s prayer for her brother’s long

life.

Vasantpanchmi

Vasantpanchmi is referred as basant panchmi , is Hindu festival celebrating the

godess saraswati, the goddess of knowledge, music and art.

This festival is celebrated every year on the fifth day of Indian month magh (jan-

feb) the first day of spring. Traditions during this festival children are taught to

write their first words, bramhins are fed, ancestors worship, the god kamdeva is

also worshipped, and goddess saraswati is also worshipped.

46

Food Habits of Nepal

The traditional staple food of the Nepal is is dal, bhat, achar and tarkari (pulse, rice,

pickle and curry). Their traditional food also includes dhiro (a paste like food prepared

of flour or pounded finger millet) and of route selroti (round sweet bread made of

pounded rice). They are very fond of milk, curd, ghee, butter, cream, meat, eggs, fish

and country liquor. But the upper castes usually do not take liquor, pork, chicken.

The Newars prepare chhoila, by mixing boiled meat, especially buffalo’s meat, with

chilly, salt etc.

Dhakani is an extraordinary dish prepared by the women a day before the teej, by

frying awash and swelled rice mixed with milk and sugar.

Furaulla, small balls of crushed bick-wheat fried in oil, are specially taken during

maghe sankranti with tuber-roots and hot pickles.

Kwanti is especially taken by Newars on Rakshya bandhanea or soyabeans or like

other seeds are soaked during the night and cooked.

Massyora- soaked gram seeds, after grounding in to a paste and mixing with turmeric

powder and tuber roots, are left to a ferment for a couple of days. After fermentation

the paste is moulded into balls, which are known as massyora.

Besides, the Nepalis take offshoot of bamboo called basko tama, Rakshi (country

liquor), Khalpi, Khatte, Kancho-Chhurpi, Chamre (polao) etc, including pickles made

of Sesamum (teel), sungur ko-khutta (pig’s trotter), khasiko khutta (He-goat’s trotter)

and so many things.

47

Food

Main Food crops: Rice, Wheat, and Maize

(Bhat-Dal-Tarkari)

Vegetable, Milk: Very common

Meat: Mutton

Local alcohol: Rakshi

Popular Nepalese drinks include locally shaped beer and lassi which is exciting

drink made from the yoghurt and water. There are many specific dressing

styles and is a home of multi cultural and lingual groups of people. Nepalese

ethnic groups have their own exclusive style of dress according to their religion

and culture. Among man Daura suruwal Dhaka topi, t-shirt, shirt pant, different

casual wears and among woman they wear kurta shalwar, saries blouse. In

Nepal city areas the young generation also wear western dress while the elder

woman wear the saris. Nepali topi is the the national cap of Nepal It's quite the

part of the national dress for men. Many Nepalese were Topi proudly and it

makes them feel good.

Some of Major Dishes.

Daal – Lentil soup eaten with plain rice and one-third of the well-known dal-

bhat-tarkari mixture. Popular lentils are the black, green and yellow varieties.

48

Bhhat - good quality old boiled rice, the staple Nepalese nourishment and the

central ingredient of the dal-baht-tarkari diet.

Tarkari - Vegetable curry in a rich spicy broth, element of the dal-bhat-tarkari

staple meal.

Gundruk - Dired and fermented green vegetables. Legendary accompaniment

to meals in the valleys of Nepal.

Achar - A pickle to "lighten up your mouth". Can be made of ground tomatoes.

sliced radish, ground coriander, boiled and diced potatoes and other

ingredients.

Newari Dishes:

Chatanmari - Rice flour pizza with meat or egg topping or plain. Chhoyla -

Roasted meat diced and spiced an flexible snack. chew it with free rice and

wash everything down with home-based liquor.

Kwati - Soup of different sprouted beans. A festival specialty and great way to

start dinner.

Momocha (MO: MO:) - Dumplings filled with minced meat, served steamed or

fried. extremely popular appetizer , afternoon snack or sunset meal.

Samay Baji - A ceremony dish consisting of flattened rice, roasted meat,

smoked fish, boiled egg, black soybeans and diced ginger.

Sukuti - Hot and spicy concoction of dried meat roasted over a charcoal fire.

Something to munch on between sips.

Wo - Lentil flour patty or without meat or egg topping. a festival snack or an

afternoon bite.

Drinks:

TongbaTongba is a kind of homemade wine sophisticated with Lemon. Here,

49

fermented millet seeds are soaked in hot water. As a result brew is sipped with

a bamboo straw while the mug is replenished every so often with hot water.

This enhances the flavor and impact of Tongba, which is a great favourite of

tourists. The Nepalese, of course, consume at winter .

RakshiRakshi is a strong alcoholic drink that is distilled from millet. An obligatory form

at social events and religious rituals, and known both for its alcoholic content as

well as its antibacterial properties, Rakshi is often homemade.

Chhyang/ Thon:

Chhyang is the generic term for any beer made from rice or other grains, typically

fermented in barrels while cloudy unfiltered Chhyang is called jaarnd. It is believed

that Chhyang was once unknown to both the Tibetans and Sherpas. It is said that a

Chinese princess, who got married to a certain king in around the seventh century

A.D. brought a brew now known as chhyang with her to Tibet as part of her dowry,

and so it was taken as a means to share hospitality.

Thon is used in Newari and Chhyang in the Sherpa language, it's a milky,

refreshingly sweet alcoholic drink made by fermentation of rice. This is a special

drink used by Newar communities during festivals, social events, and family

celebrations.

50

Eating Habits

Main Meal All around Nepal, and more so in the rice growing regions, daal

bhaat is the staple dish, eaten twice a day. This dish comprise a thin broth like

preparation (daal) made from seasoning boiled lentils with chillies, ginger and

and cooked rice (bhaat). Daal is poured liberally over a heap of bhaat and this is

eaten along with vegetable curries (tarkaari) along with spicy pickle

Snacking The two main meals are interspersed with snacks like beaten rice

(chura), flat bread (roti), vegetable curries, bread and milky sweet tea.

Food and etiquettes.

Most Nepalese eat with their hands. In many cases a spoon may not be offered

to you. But it may be available if you ask. The Nepalese use the right hand for

eating , and expects everyone that they will do the same, wash the hands

before eating as it dictate your manners , a jug of water is always available in

restaurants for this purpose.

Any food that a (non-hindu) foreigner has touched has become jutho(pollute)

and cannot be eaten by hindu . this problem does not apply to sherpas however

Do not put more food on your plate than you can eat . once it has been put on

your plate , food is considered polluted .

When you hand something to a Nepalese , whether it is food , money or

anything else uses your right hand.

Don’t throw anything into the into the fire in any house – Buddhist or hindu . in

most cultures the household gods live on earth.

Nepalese will not step feet over your feet legs . if you pull legs across a

doorway or path , or pull them in when someone wants to pass. Do not step

over the legs of Nepalese.

51

Nepal the four most important figures in Nepali culture

The first one is their parents:

parents are considered as the primary appearance of God in Nepali culture. The

culture of Nepal expects Nepali children to have a high regard for their parents

as the they respect their God.

The second is their teachers:

Teachers grasp the same place as the main Trinity in Hinduism i.e. Lord

Brahma the Creator, Lord Vishnu the Preserver and Lord Shiva the Destroyer

because teachers help to create good qualities in their students teachers help to

protect anything good qualities their students already have and teachers help to

destroy whatever bad qualities their students may have. Hence, culture expects

teachers to be sacred as a form of the trinity.

The third important person

For Nepalese are their Guest, Guests visiting Nepali homes are also

considered a form of God and hence the respect or respect. Everybody else as

well Nepali people is considered foreigner or a guest, respect extensive to

anybody as of another country.

The forth most important for Nepalese is their God:

Nepali or Hindu culture very much centers on parents, teachers and religion.

So, God and religion play an important role in the everyday life of the Nepali

people.

52

Myths and superstitions in Nepal

Nepal has millions of myth- ridden gods and goddesses, great snow dressed

mountains, some of them are very holy and incarnation of the gods and

goddesses. There are the rivers and valleys each of them are scattered with a

famous legend of their own. Myth in Nepal amounts to a lively myths which

noticeable itself in the folklore of its diversified cultural communities.

There are some myths which are as follows in a Nepalese community

1: When an important person dies, the family should not eat salt for at least 13

days.

2: When a husband dies, the wife should not wear red for entire life.

3: You should not shrill inside the house.

4: When you hit your head against someone else's head, you need to hit once

more.

5: If you touch someone's neck, you need to carry your hand.

6: Three people should not leave their home for an overnight stay at different

location on the same day.

7: It is a bad sign to sneeze when someone is leaving the house .

8: Green pepper (AKA green chilly) should not be given to someone hand to

hand: Results in a conflict.

9: You should not write on the floor with a burnt-out coal.

10: Sacrificing animals will delight certain Gods and Deities.

53

As in Nepal the majority of population of people is Hindus. So they have

different superstitions in their society it is as follows.

They have superstitions according to the week days as follows:

Monday- cannot buy new clothes

Tuesday- if you are going out of town, you shouldn’t come back on

Saturday.

Wednesday – you shouldn’t be buying cooking oil.

Thursday – if you are a woman who’s is not a widow , you shouldn’t

washing your hair

Friday – you shouldn’t be eating meat

Saturday – if you went out of town on Tuesday, you shouldn’t come

back

Sunday – if you leave house together as a trio, you shouldn’t be

going to divide ways to separate place.

All these religion and religious groups prevailing in Nepal has a great

political influence in Nepal’s politics.

54

Financial Factors

Trade and Commerce

Commercial and Economic Relations:

India is Nepal’s largest trade partner and source of foreign investment; India is also

the only transit providing country for Nepal.

Trends in trade and investment:

Bilateral trade was US$ 4.21 billion during Nepalese fiscal year 2010-11 (July 16 –

July 15). Nepal’s import from India amounted to US$ 3.62 billion and exports to India

aggregated US$ 599.7 million. In the first six months of fiscal year 2011-12, Nepal’s

total trade with India was about US$ 1.93 billion; Nepal’s exports to India were about

US$ 284.8 million; and imports from India were about US$ 1.64 billion.

Since 1996, Nepal’s exports to India have grown more than eleven times and

bilateral trade more than ten times; the bilateral trade that was 29.8% of total

external trade of Nepal in year 1995-96 has increased to 66.4% in 2010-11. Since

1995-96, the total external trade of Nepal has increased from NRs. 9433 crores

(IRs.5895 crores) to NRs. 45946.1 crores (IRs. 28716.3 crores). 83% of this increase

is on account of increase in the bilateral trade between India and Nepal, which grew

from NRs. 2808 crores (IRs. 1755 crores) in 1995-96 to

NRs. 16319.9 crores (IRs. 10199.9 crores) in first six months of 2011-12. Nepal’s

exports also increased from NRs.1988 crores (IRs. 1242 crores) in 1995-96 to NRs.

3591.6 crores (IRs. 2244.7 crores) in first six months of 2011-12. 45% of this

increase was on account of increase in Nepal’s exports to India.

Nepal’s main imports from India are petroleum products (28.6%), motor vehicles and

spare parts (7.8%), M. S. billet (7%), medicines (3.7%), other machinery and spares

(3.4%), cold rolled sheet in coil (3.1%), electrical equipment (2.7%), hotrolled sheet

in coil (2%), M. S. wires, roads, coils and bars (1.9%), cement (1.5%), agriculture

equipment and parts (1.2%), chemical fertilizer (1.1%), chemicals (1.1%) and thread

(1%). Nepal’s export basket to India mainly comprises jute goods (9.2%), zinc sheet

55

(8.9%), textiles (8.6%), threads (7.7%), polyester yarn (6%), juice (5.4%), catechu

(4.4%), Cardamom (4.4%), wire (3.7%), tooth paste (2.2%) and M. S. Pipe (2.1%).

Indian firms are the biggest investors in Nepal, accounting for 47.5% of total FDI

proposals approved foreign direct investment of IRs 42.53 billion (approx. US $ 448

million) and 23.7% of total 2108 FDI proposals approved ventures with foreign

investment.

Indian ventures in Nepal are engaged in manufacturing, services (banking,

insurance, dry port, education and telecom), power sector and tourism industries.

Some large Indian investors include, ITC, Dabur India, Hindustan Unilever, VSNL,

TCIL, MTNL, State Bank of India, Punjab National Bank, Life Insurance Corporation

of India, Asian Paints, CONCOR, GMR India, IL&FS , Manipal Group, MIT Group

Holdings, Nupur International, Transworld Group, Patel Engineering, Bhilwara

Energy, Bhushan Group, Feedback Ventures, R J Corp, KSK Energy, Berger Paints,

Essel Infra Projects Limited and Tata Projects, etc.

In recent years, Hydropwer sector has emerged as an attractive sector for Indian

investments. Government of Nepal has issued 28 survey licenses for hydropower

projects in Nepal having generation capacity of 8249 MW to Indian companies/ joint

ventures. These include Satluj Jal Vidyut Nigam Limited (900 MW Arun III); GMR

(900MW Upper Karnali and 600 MW Upper Marsyangdi); Everest Power (184 MW

Upper Karnali St-1); Bhilwara Energy Limited (120 MW Likhu-4, 50 MW Balephi, 194

MW Mugu Karnali-1 & 274 MW Humla Karnali-1); Patel Engineering Ltd (130 MW

Budhi Gandaki ka & 260 MW Budhi Gandaki kha); PES Energy Pvt. Ltd. (210 MW

Phulkot Karnali & 216 MW Upper Trishuli-1); LANCO Infratech Limited (303 MW

Namlan Project, 200 MW Karnali-7 & 100 MW Kaligandaki Gorge); Jindal Power

Limited (454 MW Chainpur - Seti Project); KSK Energy Pvt. Ltd. (400 MW Tila-1, 420

MW Tila-2, 212 MW Bheri-1, 180 MW Bheri-2, 174 MW Bheri-3, 130 MW Manang

Marsyangdi & 150 MW Upper Marsyangdi); Avanti Feeds Ltd. (80 MW Seti Nadi-3),

Maytas Estates Pvt. Ltd.( 138 MW Dudhkoshi-2); Nanda Devi Agro Farms P.

Ltd.(350 MW Dudhkoshi-4); Essel Infraprojects Limited (40 MW Lower Solu); and

Tata Power (880 MW Tamakoshi – 3). Several other companies are awaiting

decision on their survey license applications or are negotiating with the local license

holders.

56

Nepal’s transit trade is routed through twenty two designated routes from India-Nepal

border to the port of Kolkatta/Haldia. In addition, Nepal’s trade with and through

Bangladesh also transits through India.

Government of India is providing assistance for development of cross-border trade

related infrastructure. It includes upgradation of four major custom checkpoints at

Birgunj-Raxaul, Biratnagar-Jogbani, Bhairahawa-Sunauli and Nepalgunj-Rupediya to

international standards; upgrading approach highways to the border on the Indian

side; upgrading and expanding the road network in the Terai region of Nepal; and,

broad gauging and extending rail links to Nepal.

Line of credit from Exim Bank of India to Government of Nepal

GOI agreed to provide a USD 100 million Line of Credit (Loc) to Nepal in June 2006

for execution of infrastructure development projects as prioritized by GON. As a

special gesture, GOI agreed to dilute the norms of Indian content and eligibility

criterion for accessing the LoC. Exim Bank of India and GON signed an agreement

in September 2007, following which, LoC was operationalised in January 2008. The

projects identified for implementation under the LoC include eleven road

development projects, rehabilitation of 15 MW Devi hat Hydro Power Project (HEP),

development of 27 MW Rahughat HEP, Nepal portion of the Muzaffarpur- Dhalkebar

cross-border transmission line and rural electrification projects. Thirteen contracts of

value USD 73.98 million has been approved so far under the LoC. An amount of

USD 25,757,833.75 was disbursed till mid-November, 2010.

In response to further request from Government of Nepal, the Government of India

has agreed to extend another line of credit of US$ 250 million from EXIM Bank of

India to GoN at similar terms and conditions as the existing LoC. The cotract

agreement between Government of Nepal and Exim Bank was signed on 21st

October 2011 in New Delhi during the visit Hon'ble Prime Minister of Nepal Dr.

Baburam Bhattarai.

57

Money Market in Nepal

The money market is founded on the large amounts of funds, in which companies,

banks and other financial institutions wish to hold in highly liquid form to meet short-

term fluctuations in their finance market. Money market is divided into two sector -

organized and unorganized. The organized market comprises Nepal Rasta Bank -

the central bank and commercial banks. It is called organized because the activities

of commercial banks are systematically co-ordinate by the central bank.

Nepalese money market is not well developed in terms of securities dealt with and

institutions that deal completely in money market instruments are absent. Similarly,

many of the instruments which are popular in developed money market like

commercial paper, banker’s acceptance. Still this instrument not entered in Nepal

country.

Although, commercial banks have been dealing with commercial bills since long, the

bill market has its position as underdeveloped in Nepal. Only a small amount of

commercial banks' lending is against export and domestic bills and larger amount is

invested in import bills and LCs and the purchase of export bills.

In Nepal, money market is in starting phase. It is an underdeveloped in term of

securities dealt with institutions involved in the money market. There are so many

money market instrument and institutions are still not present in Nepal.

58

Monetary Policy

Higher economic growth and employment along with economic stability are the

objectives of the fiscal and monetary policies. Fiscal policy is formulated and

implemented by the executives directly elected from the people, whereas monetary

policy falls under the authority of an autonomous central bank or a monetary

authority that is free from the direct intervention of the government.

Nepal Rastra Bank has been publicly announcing monetary policy and its mid-term

review on an annual basis since 2002/03 as per the Nepal Rastra Bank Act, 2002.

The Monetary policy so announced covers the subjects like credit, foreign exchange,

microfinance, and regulation and supervision of the financial system. The provision

of announcing monetary policy enhances public accountability of the central bank

and helps in achieving the monetary goals. Monetary policy for the FY 2011/12 and

its mid-term review were made public on 21 July 2011 and 10 February 2012

respectively.

Nepal Stock Exchange

The Nepal Stock Exchange Limited usually called NEPSE is the only Stock

Exchange of Nepal. It is situated in Singh Durbar Plaza, Kathmandu Nepal. On

November 15 2011 the equity market capitalization of the companies listed on

NESPE was approximately US$ 3564.35 million.

The main objective of NEPSE is to communicate free marketability & liquidity to the

government and corporate securities by facilitating transactions in its trading floor

through member, market intermediaries, such as market makers, agent etc. opened

NEPSE its trading floor on 12th march 1994. As of November 2011, the numbers of

listed companies are 267, which include insurance companies and finance

companies and many more. The NEPSE Index is main all fairness market index of

NEPSE. It is regulated by the Securities Board of Nepal.

Trading System

59

NEPSE operates on the ‘NEPSE Automated Trading System ‘(NATS), a fully screen

based automated trading system, which adopts the standard of an order determined

market. Purchase and sell of physical share certificate is done by NATS. The

Automated Trading System was started from 23 august 2007.

Foreign Investment

Foreign investment and technology transfer is essential to make the economy strong

and consolidated, dynamic and competitive, oriented to self-dependency with

maximum utilization of natural and human resources. Realizing this fact, Foreign

Investment and Technology Transfer Policy is waiting for the final approval. The

proposed policy has emphasized flow of foreign investment by bringing procedural

simplification in technology transfer in order to be competitive in World Market for

utilizing the comparative advantage of the private sector. Accordingly, a Bilateral

Investment Promotion and Protection Agreement have been initialed with India to

promote Indian Investment in Nepal, while preparation is being made to conclude

such agreements with other countries.

Foreign Investment Projects in Nepal

Foreign direct investment approvals in Nepal as of 16 July 2010 stands at NRs

57,998 million from 1898 joint venture projects. The largest contributor to Nepal’s

foreign direct investment is India with approved investments of NRs 25,381 million in

462 projects. China comes second with a total approved investment of NRs 5,849

million in 332 projects and United States of America is third with a total approved

investment of NRs 4,875 million in 166 projects. The employment generated from

these investments stand at 144,513, with contributions from India, China and United

States of America at 53,101, 20259 and 12,034, respectively.

60

NEPAL-INDIA RELATIONS

As close neighbours, India and Nepal share a special relationship of friendship and

cooperation characterized by open borders and deep-rooted people-to-people

contacts of kinship and culture. There has been a long tradition of free movement of

people across the borders. Nepal has an area of 147,181 Sq. Kms. and a population

of 29 million. It shares a border of over 1850 Kms to the south with five Indian States

– Sikkim, West Bengal, Bihar, Uttar Pradesh and Uttarakhand and in the north with

the Tibet Autonomous Region of the People’s Republic of China.

In keeping with the tradition of regular high-level exchange of visits between India

and Nepal, President, Dr. Ram Baran Yadav, the first President of Republic of Nepal,

paid an official visit to India from 27 January – 5 February 2011. Other visits from

Nepal to India in the recent years have been by Prime Minister Dr. Baburam

Bhattarai (20-23 October 2011), Prime Minister Madhav Kumar Nepal (18-22 August

2009) and Prime Minister Pushpa Kamal Dahal ‘Prachanda’ (14-18 September,

2008). External Affairs Minister Shri S.M. Krishna visited Nepal from 15-17 January

2010 and again from 20-22 April 2011. Finance Minister Shri Pranab Mukherjee

visited Nepal on 27 November 2011.

India-Nepal Treaty of Peace and Friendship of 1950 is the bedrock of the special

relations that exist between India and Nepal. Under the provisions of the treaty,

Nepalese citizen have enjoyed unparalleled advantages in India, availing the

facilities and opportunities at par with Indian citizens. The Treaty has enabled Nepal

to overcome the disadvantages of being a land-locked country. Overtime, many

regimes in Nepal have raised the issue of revision of the treaty. India has maintained

that it is willing to examine all bilateral arrangements with a view to further

strengthening our relations. Specific suggestions from the Nepalese side have not

been forthcoming.

Cooperation on issues of mutual security concerns relating to the open border has

been a hallmark of our relations with Nepal. Nepal has assured, at various levels that

it would not allow its territory to be used for any activity against India. There are

streamlined bilateral mechanisms that meet regularly to address all issues

concerning security, including cross-border crime, and establishing effective

communication links between the bordering districts of the two countries to further

61

facilitate the exchange of information. India has repeatedly stressed the need for

strengthening the bilateral legal framework in order to counter the common cross

border security challenges. India has also provided liberal assistance to the security

apparatus in Nepal in development of infrastructure, capacity building, equipment

and training of human resources.

Contrary to some politically motivated attempts in Nepal to portray the status of the

boundary in an unfavourable light alleging instances of encroachment, there are no

disputes on the India-Nepal boundary. A Joint Technical Committee (JTC) led by

Surveyors General of India and Nepal has jointly prepared and initialed strip maps of

98% of the India-Nepal boundary in December 2007. These strip maps are awaiting

authentication at Plenipotentiary level. India has emphasized the necessity of early

authentication of the strip maps so that work on installation of boundary pillars where

they are missing and repairs where they are damaged could begin and the

concerned agencies in the two countries are provided with a contemporary

information base for effective border management. Nepal has conveyed that they are

building political consensus for the signing of the strip maps. Demarcation of the

remaining sectors of the boundary is to be taken up by the Joint Boundary Working

Group which will be activated upon authentication of the agreed strip maps.

Beginning with the 12-Point Understanding reached between the Seven Party

Alliance (SPA) and the Maoists in Delhi in November 2005, Government of India has

welcomed the efforts by the Nepalese political parties in working towards political

stabilization in Nepal through peaceful reconciliation and inclusive democratic

processes. India has consistently responded with a sense of urgency to the needs of

the people and Government of Nepal in ensuring the success of the political process

and institutionalization of multi-party, inclusive democracy through the framing of a

new Constitution.

62

NEPAL- INDIA POLITICAL RELATIONS

Nepal and India have been living as close neighbours of south Asia since the

existence of two countries. The relationship between the two countries is bound by

history, geography, economic, cooperation, socio culture ties and people-to –people

relations. The bilateral relationship, which is marked by mutual trust, goodwill and

cooperation, has been moving forward with the increased interactions and close

cooperation between the two countries with the passage of time.

A number of mechanisms exist between Nepal and India for bilateral cooperation

covering various aspects of bilateral relations ranging from trade and economic

cooperation to security and water resources. Post the visits from Nepal to India at

the level of Prime Minister after Nepal got transformed into a democratic republican

country in 2008, both the countries agreed to reactive the bilateral mechanisms.

Consequently, interactions have taken place on cooperation related to security,

water resources, trade and commerce, customs, etc at different levels. There has

been a renewed interest in both the sides to make the bilateral relationship more

interactive and fruitful.

63

NEPAL- INDIA TRADE RELATION

Nepal and India have a history of age-old relations in trade and commerce. India is

Nepal's largest trade partner and source of foreign investment.

Total bilateral trade has reached US $3.21 billion (NRS 257.10 billion) during

Nepalese fiscal year 2009-10. During that year, Nepal’s imports from India amounted

US $2.71 billion (NPR 217.11 billion), and exports to India remained about US $0.50

billion (NPR 39.99 billion).

Nepal and India, despite their vast differences in size and population, are closely

held together by their culture and traditions. A history of close co-operation and

friendship between the people of these two nations has been greatly facilitated by

the long and open border and close economic ties between these countries. In the

past few decades, there has been tremendous progress in economic relationship

between Nepal and India. In the recent years, the two countries have successfully

concluded very important treaties such as, Nepal-India Trade Treaty 1996 and its

subsequent renewals in 2002 and 2009, Nepal-India Transit Treaty, Agreement to

Control Unauthorized Trade between Nepal and India, Railway Service Agreement,

Bilateral Agreement For Avoidance of Double Taxation & Prevention of Fiscal

Evasion with respect to Taxes on Income, Mahakali Treaty and Power Trade

Agreement, to name a few.

Nepal has the largest volume of trade with India. Nepal also has the largest trade

deficit with India, and this figure is increasing from year to year. Of late, it is widely

felt that Nepal must concentrate heavily on import substitution and in setting up and

furtherance of export-oriented industries. To achieve this, Nepal must attract direct

foreign investment with more and more value additions in Nepal so that it may

industrialize faster and also increase trade with India so as to reduce the trade

deficits with the trading p

64

PART 2

65

Banking Industry

Banking sector in Nepal

The current picture of the balance sheets of some financial institutions needs to be

restructured as expeditiously as possible not only to revitalize the institutions but also

to aid economic growth. Hence, it has become necessary that the financial regulator

take the initiative in assessing the true value of the loan portfolio of such banks and

take the necessary remedial actions for banks with insufficient capital.

Banking is mere a simple deposit and lending centre. This is mainly due to the large

gap between the rich and the poor where the poverty amongst the poor never lets them

to be facilitated with the banking as a whole.

In order to encourage the trust of the public in the overall banking and financial

system, protect and promote the rights & interests of depositors and give quality

banking & financial intermediary services through healthy competition, the Bank and

Financial Act 2006 has been brought into result. It aims to endorse well business and

support prudential regulation.

The role & importance of banks in augmenting growth, increasing credit and

generating employment are also examined using regression and trend analysis of time

series data. Insurance sector performance has been assessed independently by

examining the pattern of insurance premiums & lending.

Basically two factors governs it, first is the banks had limited vision to innovate the need in

the areas that suits the need for the common; at the second place nor did the customer had

knowledge how could s/he bank upon his needs. Apart from this, the banks vision was to

target the big which provides a logical sense to serve and earn.

Policy Reforms in Banking

The mid 1980s, Nepal's financial systems were characterized by interest rate controls,

controls on entry & exit, and selective credit policies. An intermediation cost was

very high due to lack of competition & inadequacy.

66

There were only two commercial banks, and two specialized financial institutions, the

Agricultural Development Bank of Nepal (ADB/N) & the Nepal Industrial

Development Corporation (NIDC), all forced and regulated by the Government.

Financial institutions and Commercial banks were authorized to fix deposit rates

above the floor rate fixed by the Nepal Rastra Bank (NRB).

In 1984, a joint venture bank was also allowed to operate. Elimination of the statutory

liquidity ratio and introduction of auctioning of Treasury Bills were other reform

measures implemented during the 1980s.

NRB is a set an upper limit on the amount of loan to be provided to a single borrower

or group of borrowers by a bank with the aim of minimizing the risk of over-attention

of loans in some big borrowers.

Banks was instructed to offer a maximum of 50 percent of capital fund with respect to

funded loan and 100 percent of capital fund with respect to non-fund based loans for a

single borrower.

These reforms were ineffective in raising the financial health of the banking system in

government and general owned banks in exacting.

Rules on Ownership

At least 51 per cent ownership has to be engaged by the promoters for establishing

any bank & financial institution.

Likewise, a 30 % share of total paid up capital has to be owed to the general public.

Existing Scenario of Banking Sector

Presently, Nepal has not yet allowed foreign bank branches in the country and only

permits commercial presence by a foreign financial institution – presently this is limited

to a maximum equity of 75% (seventy five percent).

However, during the course of accession negotiation for membership in WTO and at the

request of some WTO members, Nepal has committed to allow foreign bank branches in

the context of wholesale banking, only after 1 January (i.e. the transition period).

The new Bank and Financial Institution Ordinance has been enforced from 2004, which

has also incorporated a provision under section 4(3) that allows incorporating a bank and

financial institution in Nepal, fully owned as a subsidiary of a Foreign Bank or a

Financial Institution.

67

The current Government of Nepal (GON) has continued its liberal trade and investment

policies and states in its public proclamations to foreign investors that Nepal is open for

business.

However, political instability, labour unrest, continuing bureaucratic delays and

inefficiencies, pervasive corruption, and perennial power shortages create an uncertain

environment for foreign and private investment.

India was by far the most important foreign investor in Nepal with 501 ventures,

accounting for nearly 47.6 percent of total foreign investment. Ten of the 20 largest

foreign enterprises in Nepal had Indian investment.

Policy for Indian Banking Industry in India

The Banking Regulation Act was passed as the Banking Companies Act 1949 and came

into force wef 16.3.49. Subsequently it was changed to Banking Regulations Act 1949 wef

01.03.66. Summary of some important sections is provided hereunder. The section no. is

given at the end of each item. For details, kindly refer the bare Act.

Power to Reserve Bank to issue directive to banks to determine policy for advances.

Every bank to maintain a percentage of its demand and time liabilities by way of cash,

gold, unencumbered securities 25%-40% as on last Friday of 2nd preceding fortnight.

Analysis of Study

The study of both countries have been reviled that the India has stronger Economical as well

as financial position than Nepal.

Nepal has been more depend on agriculture sector which has highest contribution in

providing employment and in the GDP of country.

Nepal has high level of unemployment rate, which has been indicated high supply of

labour force so there is opportunities for labour intensive technology for industry

sector, which has been help to decrease unemployment rate and increase GDP

contribution.

India is one of major Import as well as Export partner of Nepal.

68

Existing Scenario of Banking Sector

Presently, Nepal has not yet allowed foreign bank branches in the country and only permits

commercial presence by a foreign financial institution – presently this is limited to a

maximum equity of 75% (seventy five percent). However, during the course of accession

negotiation for membership in WTO and at the request of some WTO members, Nepal has

committed to allow foreign bank branches in the context of wholesale banking, only after 1

January 2010 (i.e. the transition period). In the mean time, the new Bank and Financial

Institution Ordinance has been enforced from 2004, which has also incorporated a provision

under section 4(3) that allows incorporating a bank and financial institution in Nepal, fully

owned as a subsidiary of a Foreign Bank or a Financial Institution.

The current Government of Nepal (GON) has continued its liberal trade and investment

policies and states in its public proclamations to foreign investors that Nepal is open for

business. However, political instability, labor unrest, continuing bureaucratic delays and

inefficiencies, pervasive corruption, and perennial power shortages create an uncertain

environment for foreign and private investment.

India was by far the most important foreign investor in Nepal with 501 ventures, accounting

for nearly 47.6 percent of total foreign investment. Ten of the 20 largest foreign enterprises in

Nepal had Indian investment.

List of Banks in Nepal

There are 217 banks and financial institutions of Nepal have been classified in following 5

categories, which are as follows:

1) Central Banks – 1

2) Commercial Banks (Class A) – 32

3) Development Banks (Class B) – 86

4) Finance Companies (Class C) – 77

5) Micro Credit Development Banks (Class D) – 21

69

Existing Rules and Regulations Relating to the Banking Sector

Followings are the requirements for establishing a new commercial bank in Nepal

[A] Regarding Paid up capital Requirements

To establish a new commercial bank of national level, the paid up capital of

such bank must be at Rs. 1000 million.

To have an office in Kathmandu, the bank is required to have either joint

venture with foreign banks and financial institutions or a technical service

agreement (TSA) at least for three years with such institutions.

In general, the share capital of commercial banks will be available for the

promoters up to 70 percent and 30 percent to general public. The foreign

banks and financial institutions could have a maximum of 75 percent share

investment on the commercial banks of national level. In order to provide

adequate opportunity for investment to Nepali promoters in National level

banks, only 20 percent of total share capital will be made available to general

public on the condition that the foreign bank and financial institution are going

to acquire 50 percent of total share.

Banks that are already in operation and those who have already obtained letter

of intent before the enforcement of these provisions have to bring their capital

level within seven years, i.e., by 16 July 2009 as per this recently declared

provision. In order to increase in the capital such increase should be at a rate

of 10 percent per annum at the minimum.

Banks to be established with foreign promoters' participation have also to be

registered fulfilling all the legal processes prescribed by the prevalent Nepal

laws.

To establish the commercial banks in all the places in the kingdom other than

in the Kathmandu valley, the paid up capital must be Rs. 250 million. In this

case, the commercial banks to be established outside Kathmandu Valley, share

investment of promoters and general public should stand at 70 percent and 30

percent respectively.

Banks to be established outside Kathmandu Valley could be allowed to

operate throughout the kingdom including Kathmandu Valley only on the

70

condition that they have operated satisfactorily at least for a period of three

years and they have brought their paid up capital level up to Rs. 1000 million

and also fulfilled other prescribed conditions. Unless and until such banks do

not get licence to operate throughout the kingdom, they will not be allowed to

open any office in Kathmandu Valley.

The total committed share capital, the promoters has to deposit in NRB an

amount equal to 20 percent along with the application and another 30 percent

at the time of receiving the letter of intent on the interest free basis. The bank

should put into operation within one year of receiving the letter of intent. The

promoters have to pay fully the remaining balance of committed total share

capital before the banks comes into operation. Normally, within 4 months

from the date of filing of the application, NRB should give its decision on the

establishment of the bank whether it is in favour or against it. If it declines to

issue license, it has to inform in writing with reasons to the concern body.

Policy Reforms in Banking

General Policy Reforms

Proceeding to liberalization in the mid 1980s, Nepal's financial system was characterized

by interest rate controls, controls on entry and exit, and selective credit policies.

Intermediation costs were excessive due to lack of competition & inefficiency. There were

only two commercial banks, and two specialized financial institutions, the Agricultural

Development Bank of Nepal (ADB/N) and the Nepal Industrial Development Corporation

(NIDC), all controlled and regulated by the Government.

In 1984, controls on interest rates were gradually lifted. Commercial banks & financial

institutions were allowed to fix deposit rates more than the floor rate fixed by the Nepal

Rastra Bank (NRB). By 1989 uncontrolling of interest rate was completed. In 1984, joint

venture banks were also allowed to operate. As a result, 3 joint venture banks came into

operation during the period 1984 to 1987. Similarly, the Finance Companies Act was

brought into result in 1985 to meet the growing demand of small borrowers. Removal of

the statutory liquidity ratio and introduction of auctioning of Treasury Bills were other

reform measures implemented during the 1980s.

71

From 1989, NRB also began to fix capital adequacy ratio. In the same year 1989, NRB

also set an upper limit on the amount of loan to be provided to a single borrower or group

of borrowers by a bank with the aim of minimizing the risk of over-attention of loans in

few big borrowers. Banks were instructed to provide a maximum of 50 percent of capital

fund with respect to funded loan and 100 percent of capital fund with respect to non-fund

based loans for a single borrower. Similarly, in 1990 the Central Bank introduced open

market operations as one of the tools of monetary policy.

Some Specific Policy Measures

General Provisions:Nepal Rastra Bank Act, 2002 has given full right to the Nepal Rastra Bank regarding

regulation, inspection & supervision of the banks and financial institutions. Bank and

Financial Institution Act governs the functional aspect of banks and financial institutions. The

NRB classifies the institutions into "A" "B" "C" "D" categories on the basis of minimum

paid-up capital and provides a license to the bank and financial institution. The license holder

entity must maintain a capital fund according to ratio agreed by NRB, based on its total risk

weighted assets. The license holder entity must contribute a fixed percentage of its profit to

general reserve every year until the amount is double the paid up capital of the entity.

Establishment and Classification:

For the establishment of any bank or financial institution in Nepal, every bank should get a

license from Nepal Rastra Bank (NRB). For this purpose the NRB has classified the

institutions into "A" "B" "C" "D" groups on the basis of the minimum paid-up capital shown

in the table below.

To set up a new commercial bank at national level, the paid up capital of such bank must be

at least Rs. 1000 million. Those banks that are in operation and those who have obtained

letter of intent before the enforcement of these provisions have to raise their capital level to

Rs 1 billion by 16 July 2009. In order to increase the capital level, profit must be at least 10

% of the paid up capital.

72

Rules on Ownership:

At least 51 % ownership has to be engaged by the promoters for establishing any bank and

financial institution. Likewise, a 30 per cent share of total paid up capital has to be distributed

to the general public.

Rules on Location:

For operating banking all over the country, the paid up capital must be Rs. 1 billion. To

establish a bank outside Kathmandu Valley, the paid up capital must be Rs. 320 million.

Legal Provisions for the Establishment of Joint Venture Bank: For establishing a Joint

Venture Bank, share capital of the foreign partner bank should be at least 20 %. The upper

limit has now been raised to 75 per cent of the total paid up capital. In addition, if the ratio of

paid up capital of foreign partner is less than 50 %, at least 30 % shares have to be issued to

the general public.

Provisions for Establishing Foreign Bank's Subsidiaries and Branches:

A foreign bank and financial institution desiring to open its office within Nepal has to receive

permission from the NRB. The NRB may specify necessary terms & conditions while

granting transaction license. However, a joint venture bank cannot open another bank or

financial institution on a joint venture basis. Additional contacts and representative office

may be recognized with the permission of the Nepal Rastra Bank.

Branching:

A new commercial bank with a head office in Kathmandu may firstly open a branch in the

Valley. Only after some interval is it permitted to open other branches in the Valley and

outside. For existing commercial banks, they can open branches anywhere in the country

after getting sanction from the NRB.

Scope of Business:

In order to encourage the trust of the public in the overall banking & financial system, protect

and promote the rights & interests of depositors and provide quality banking and financial

intermediary services through healthy competition. The Bank and Financial Act 2006 has

been brought into effect. It aims to promote vigorous business and strengthen prudential

regulation.

73

Rules on Employment:

There are no specific rules & regulations for domestic banks on employment. Normally,

commercial banks prepare their staff by-law covering issues correlated to personnel

management. In case of Joint Venture Banks, they have to make separate Technical Service

Agreement on number and responsibilities of expatriates.

Prudential Regulation:

The main responsibility of the NRB is to build up prudential regulation in the banking

system. As an administrator, the NRB reviews and inspects functioning of financial

institutions through among others, on-site inspections and off-site inspections and special

inspections.

NRB recently has issued a set of sixteen joined directives for all bank & financial institutions

for ensuring corporate governance, consolidating financial situation improving the people’s

confidence & enhancing constancy of the financial system.

The directives related to prudential regulation include: (I) Maintenance of capital adequacy,

(ii) Loan classification and loan loss provisioning, (iii) Limit of credit exposure and facilities

to single borrower, group of related borrowers and single sector of the economy, (iv)

Accounting policies & formats of financial statements, (v) Minimization of risk, (vi)

Corporate governance, (vii) Time-frame for completion of regulatory directives issued in

connection with examination and direction of the banks, (viii) Investment in shares &

securities, (ix) Statistical reporting by commercial banks to NRB &, (x) Sale and transfer of

promoters share (xi) Provision related with Consortium financing (xii) Provision for

blacklisting (xiii) Maintenance of Cash reserve ratio (xiv) Provisions for bank branches (xv)

Provisions relating interest rate and (xvi) Provisions related with financial resource

collection.

Performance of Banking and Insurance Sectors

Periods is examined by reference to key indicators like net profit, ratio of non-performing

loans to total loans and interest rate spars. Competition and efficiency issues are assessed by

calculating various performance indices as suggested by Beck and Heiko (2006) and

Bayraktar and Wang (2006). The role and importance of banks in augmenting growth,

74

expanding credit and generating employment are also examined using regression and trend

analysis of time series data. Insurance sector performance has been assessed separately by

examining the pattern of insurance premiums and lending.

Performance and Efficiency of the Commercial Banks

Net Profit, NPA and Interest Spreads

The net profit, the ratio of NPA to total loans, and the interest spread of government owned,

private domestic owned and joint venture banks for the years 1990, 1995, 2000 & 2005. By

examining the profitability of the 3 types of banks, it is found that, except in the case of one

bank, the profitability of the joint venture banks has substantially increased over time.

A parallel pattern is observed in the domestic private sector banks. However, in the case of

government owned banks non-performing loans in the total loan portfolio (reaching above 60

% in both banks in 2003), caused a major losses. It was only post - contracting out of these

banks as a part of overall financial sector reform, could these banks make a net profit.

Financial sector liberalization has been linked with continuous decrease in interest rate

spreads for all banks and positive net profits. Thus, the Nepalese experience indicates that

increased competition backed by institutional and structural reforms are keys to improving

performance of the banking system. It is also clear from the Nepalese experience that even in

a liberalized environment only strict crises and shocks compel broad based reforms in

government banks. Additional indices related to competition and efficiency supports this.

75

History of Nepalese Banking System

The initiation of formal banking system in Nepal commenced with the establishment in 1937

of Nepal Bank Limited (NBL), the first Nepalese commercial bank. The country's central

bank, Nepal Rastra Bank (NRB) was established in 1956 by Act of 1955, after nearly two

decades of NBL having been in existence.

A decade after the establishment of NRB, Rastriya Banijya Bank (RBB), a commercial bank

under the ownership of His Majesty’s Government of Nepal (HMG/N) was established.

Thereafter, HMG/N adopted open and liberalized policies in the mid 1980s reflected by the

structural adjustment process, which included privatization, tariff adjustments, liberalization

of industrial licensing, easing of terms of foreign investment and more liberal trade and

76

foreign exchange regime was initiated. With the adoption of liberalization policy, there has

been rapid development of the domestic financial system both in terms of number of financial

institutions and as ratio of financial assets to the GDP.

As of July 2005, the number of commercial banks has reached 17 and their branches

Numbered 375. A total of 60 finance companies and other Development Banks and numerous

credit cooperatives have also been established. Total financial assets in 2004/2005 reached

around 54.09 percent of GDP and the M2/GDP ratio, which shows the financial sector

development or financial deepening increased from in 12.4 percent in 1975 to 50.9 percent in

2000

In the context of banking development, the 1980s saw a major structural change in financial

sector policies, regulations and institutional developments. HMG/N emphasized the role of

the private sector for the investment in the financial sector. The financial sector liberalization,

started already in the early eighties with the liberalization of the interest rates, encompassed

further deregulation of interest rates, relaxation of entry barriers for domestic and foreign

banks, restructuring of public sector commercial banks and withdrawal of central bank

control over their portfolio management.

Factors affecting to Banking Industry of Nepal

Economical Factors

FACTORSNEPAL

GDP (purchasing power parity)$40.49 billion (2012 est.)

GDP (official exchange rate) $19.42 billion (2012 est.)

GDP - real growth rate 4.6% (2012 est.)

GDP - per capita (PPP) $1,300 (2012 est.)

GDP - composition by sector Agriculture: 38.1%

industry: 15.3%

services: 46.6% (2012 est.)

77

Labor force - by occupation

Agriculture: 75%

industry: 7%

services: 18% (2010 est.)

Labor force18 million

severe lack of skilled labor (2009

est.)

Inflation rate (consumer prices) 8.3% (2012 est.)

Industrial production growth rate 2.9% (FY11/12)

Unemployment rate 46% (2008 est.)

Financial Factors

FACTORSNEPAL

Central bank discount rate 6% (31 December 2010 est.)

Commercial bank prime lending rate 8% (31 December 2012 est.)

Stock of money $2.53 billion (31 July 2009)

Stock of narrow money $2.983 billion (31 December 2012 est.)

Stock of quasi money $7.49 billion (1 April 2009)

Stock of broad money $12.12 billion (31 December 2011 est.)

Stock of domestic credit $9.618 billion (31 December 2012 est.)

Current Account Balance $93 million (2012 est.)

Fiscal year 16 July - 15 July

Exports $1 billion (2012 est.)

Imports $6.15 billion (2012 est.)

78

Social & Demographic Factors

FACTORSNEPAL

Population 29,890,686 (July 2012 est.)

Population growth rate 1.768% (2012 est.)

Population below poverty line 25.2% (2011 est.)

Age structure

0-14 years: 33.5% (male

5,108,258/female 4,918,259)

15-24 years: 22.5% (male

3,350,311/female 3,362,958)

25-54 years: 34.1% (male

4,786,214/female 5,417,777)

55-64 years: 5.4% (male 792,775/female

835,048)

65 years and over: 4.4% (male

613,905/female 705,181) (2012 est.)

Household income or consumption

by percentage share

lowest 10%: 3.2%

highest 10%: 29.5% (2011)

Distribution of family income -

Gini index32.8 (2010)

Languages

Nepali (official) 47.8%, Maithali 12.1%,

Bhojpuri 7.4%, Tharu (Dagaura/Rana)

5.8%, Tamang 5.1%, Newar 3.6%, Magar

3.3%, Awadhi 2.4%, other 10%,

unspecified 2.5% (2001 census)

Religions Hindu 80.6%, Buddhist 10.7%, Muslim

4.2%, Kirant 3.6%, other 0.9% (2001)

Exchange ratesNepalese rupees (NPR) per US dollar -

85.16 (2012 est.)

79

LiteracyTotal Population: 60.3%

male: 73%

female: 48.3% (2010 census)

Political & Legal Environment

FACTORSNEPAL

Government type Federal democratic republic

Capital Kathmandu

Administrative divisions

14 zones (anchal, singular and plural); Bagmati,

Bheri, Dhawalagiri, Gandaki, Janakpur,

Karnali, Kosi, Lumbini, Mahakali, Mechi,

Narayani, Rapti, Sagarmatha, Seti

Legal system English common law and Hindu legal concepts

Legal Factors

There are following rules & regulations have to follow:

Nepal Rasta bank as central bank of Nepal Local Governmental Policy

Foreign Direct Investment Policy Economic Policy

Monitory Policy.

Others Factors

Geographical factors International Environmental Factors

- Location - Trade associations

- City - Regional Unions

Technological factors - WTO

Competitive factors - World Bank

80

Policy for Indian Banking Industry in India

BANKING REGULATIONS ACT 1949

- The Banking Regulation Act was passed as the Banking Companies Act 1949 and came

into force wef 16.3.49. Subsequently it was changed to Banking Regulations Act 1949

wef 01.03.66. Summary of some important sections is provided hereunder. The section

no. is given at the end of each item. For details, kindly refer the bare Act.

- Banking means accepting for the intention of lending or investment of deposits of money

from public repayable on demand or otherwise and withdraw able by cheque.

- For banking companies carrying on banking business in India to use at least one word

bank, banking, banking company in its name (7).

81

Hotel Industry

The present-day world is struggling to find a new order in social and economic structure.

Dynamic forces are working with unbelievable speed today. Man is advancing so rapidly that

knowledge and technology challenge him before considerate the past. Miracle in transport

and communication has made this world a universal village.

SWOT Analysis of Hotel industry in Nepal

Strengths

Afterward signing the Peace agreement and performance of parliamentary elections

finally the Federal Democratic Republic of Nepal has been declared. Such growth of

democracy and political balance of the country means a very optimistic factor for the

further development of tourism which was not the case in the last period

The political parties in parliament have given their promise to tourism as the most

important sector of Nepalese economy. Subsequently the “New Nepal” was awarded

also a new tourist brand name and marketing advertising by The Nepal Tourist Board.

State budget for touristic sector is growing although the experts in touristic sector still

claim to expect more funding by the government.

The demand on Nepal as a touristic destination is still lasting on the global touristic

market and a strong market appeal with huge interest is to feel worldwide.

The Nepal’s nature by its attractiveness, multiplicity and uniqueness at the same time

is representing a permanent strong point of touristic sector in the nation.

Weaknesses

In spite of the vast interest of the global touristic market for the region the near

countries represent a strong and direct rivalry to Nepal and thus the final figure of

tourist reaching Nepal is comparatively lower as it could be which means a relatively

lower results from tourism quiet demand.

82

Nepal as known “Low cost destination” is receiving less foreign currency as it could

by better organized touristic offer and developed infrastructure of the nation. There

are also other reasons that are representing a strong problem to the efforts of the

touristic experts to raise the image and excellence of services which would finally

lead into the higher ranking position of the country touristic and thus enable better

prices and related higher revenue.

In addition to the internal problems on the way of reaching higher image of tourism in

Nepal there are inopportunely also external negative factors where a strong

negotiating trend of universal operators are identified. This trend is hard to stop again

due to current profile of a low cost destination.

The poor country infrastructure and availability by air and by land represents a

bottleneck for a significantly higher touristic inflow currently and also midterm.

Drinking water and hygienic food also represent a big difficult for the image of local

tourism since they are not yet accessible on enough places

Despite the official support of the politics to the growth of tourism the importance of

this economic sector is still not widely shown which gives lower results than

predictable by the local and international specialists as well as wider public in the

country

Alongside the above defined weaknesses there is to be indicated also the

unenthusiastic and divided industry as well as the insufficient software and absent

knowledge on different fields of tourism.

Opportunities

There are symbols of recovery due to the stabilizing of political condition which

impacts on growing environment for tourism). Certain relaxing of travel advisories is

recently present which is mainly in relation with the development of the political

condition. It is followed by the increasing business inquiries-and bookings.

As a permanent opportunity the Nepal’s tourism attractions and their sole and nature

based activities are defining the variety of the local tourism. Products like “Life time

83

experiences embracing nature” as well as culture and adventure are connection into

the frame of the country image.

Increasing awareness towards Nepal among worldwide viewers and developing

markets are based on attracted natural and rural experience. The significant growth in

outbound tourism in nearby countries like India and China represent a huge potential

for the coming years.

The promotion of regional tourism must intensively include local culture e.g.

Buddhism, Asian culture, Himalayan trail tec.

Sales on line and internet travel entrance represent the quickest and cost effective way

of reaching potential consumers.

Threats

In spite of the developed situation of tourism due to the stable political situation the

country is still the victim of the past image which is observable as travel reluctance

for Nepal and through negative and strong travel advisories.

Due to global situation there are some falling figures already from 2002 and due to

the very recent energy crisis it is a question if the growing of Nepalese tourism will be

as high as predictable on basis of favorable local factors.

If the need to strengthen the National air carrier will be neglected further this can

mean an additional trouble on the existing bottleneck of the air accessibility. The lack

of enough seats on Indo Nepal sector and the poor long-haul connectivity are joining

to the same issue.

Additionally and again there must be mentioned threats from the competition on the

international market and especially from close rivals like Malaysia, Thailand,

Singapore, Srilanka, Maldives where the resource limits like low budget comparing to

competitors, slow development of infrastructure also have an important negative role.

84

Hotel Statistics

HOTEL ACCOMMODATIONS IN KATHMANDU VALLEY, 2009 -2011.

Category No. of Hotels No. of Rooms No. of Beds2009 2010 2011 2009 2010 2011 2009 2010 2011

5 Star 8 8 8 1539 1539 1539 2897 2897 28974 Star 2 2 2 190 190 190 362 362 3623 Star 11 13 16 372 501 596 774 774 11072 Star 27 28 29 1138 1183 1213 2263 2263 23961 Star 26 26 26 564 564 564 1374 1374 1374Touriststandard 348 387 423 5010 5903 6650 9976 9976 12805Total 422 464 503 8813 9880 10752 17646 17646 20941

Source: Nepal Tourism Statistics 2011 (Annual Statistical Report)

In Kathmandu there are mainly following different categorize hotels situated.No. of Hotels

11

22

16

2

8

Total 59

85

City No. of Hotels

Pokhara 9

Birgunj 4

Dhulikhel 5

Hetuda 2

Lumbini 5

Solukhumbu 4

Nepalgunj 1

Daman 1

Bhairahawa 1

Dhangadi 1

Jomsom 1

Total 34

So overall in Nepal, there are around 93 different types of Hotels are running

ROOM OCCUPANCY RATE BY MONTH FOR THREE STAR HOTEL INKATHMANDU VALLEY, NEPAL, 2011.

Month Rooms OccupancyRate(%)Available Occupied

January 16,647 9,156 55February 15,036 9,110 60.6March 16,647 9,621 57.8April 16,110 11,466 71.2May 16,647 11,300 67.9June 16,110 10,615 65.9July 16,647 8,057 48.4August 16,647 10,115 60.8September 16,110 10,521 65.3October 16,647 12,442 74.7November 16,110 13,381 83.1December 16,647 10,383 62.4Total 196,005 126,167 64.4

Source: Nepal Tourism Statistics 2011 (Annual Statistical Report)

ROOM OCCUPANCY RATE BY MONTH FOR FIVE STAR HOTEL INKATHMANDU VALLEY, NEPAL, 2011.

86

Month Rooms OccupancyRate (%)Available Occupied

January 45,725 23,725 51.89February 41,300 26,878 65.08March 45,725 31,304 68.46April 44,250 32,590 73.65May 45,725 29,053 63.54June 44,250 27,203 61.48July 45,725 23,474 51.34August 45,725 28,382 62.07September 44,250 27,034 61.09October 45,725 37,637 82.31November 44,250 39,740 89.81December 45,725 28,905 63.21Total 538,375 355,925 66.11

Source: Nepal Tourism Statistics 2011 (Annual Statistical Report)

87

CASINO INDUSTRY

CASINOS IN NEPAL

In Nepal, There are many Casinos & Hotels like 4 & 5 also provides Casinos but

in small scale. Casinos are as follows:

CASINO ANNA

Casino Anna is in Kathmandu, Madhyamanchal, Nepal and is open daily 24 hours.

The casino's 12,000 square foot gaming space features 200 gaming machines and forty table

and poker games. The property has four restaurants, one bar and a hotel with 187 rooms.

It is mainly Located within the 5 Star Hotel de l'Annpurna. I has700 trained

Service Staff & largest number of jackpot winners of any casino in the valley. At second

Floor facilities for serious gambling with larger wagers and tournament players welcomed.

CASINO EVEREST

Casino Everest is in Kathmandu, Madhyamanchal, Nepal and is open daily 24 hours.

The casino's gaming space features twenty-nine gaming machines and twenty table game. It

has 29 Gaming Machines & Table and Poker Games - 20 totals. Location within the 5 Star

Hotel Everest.Playing takes plays in one of Kathmandu's biggest banquet halls.

CASINO NEPAL

It is Located on the premises of the 5 Star Hotel Soaltee Holiday Inn Crown Plaza.

New renovations to make it the largest gambling center in the valley.Regularly held

entertainment programs. A newly established back-bar and game room for serious gamblers.

It has 11Table and Poker Games.

CASINO ROYALE

It is Located within the 5 Star Hotel Yak and Yeti in Kathmandu's most popular tourist

center,DurbarMarg, The advancement is Gambling in an Old-World atmosphere. A Kids

Corner with entertainment games.

FACTORS AFFECTING CASINOS IN NEPAL

88

ECONOMIC FACTORS

AT WHAT STAGE OF THE BUSINESS CYCLE IS THE ECONOMY

If the economy is going through a recession it is obvious that businesses generally

will not be doing well due to low aggregate demand in the economy. On the other hand, a

boom period will lead to higher business profits and revenue for most of the businesses in the

economy.

INFLATION RATE

High rate of inflation leads to lower purchasing power for consumers resulting in

lower demand for goods and services. Moreover, a higher inflation rate will make business

uncompetitive in the international market leading to lower sales for the business.

PREVAILING INTEREST RATES

Higher Interest rates will lead to a fall in the aggregate demand in the economy thus

leading to difficulty for business to find customers willing to buy its product. Lower interest

rates will lead to a increase in demand in the economy.

UNEMPLOYMENT LEVEL

High level of unemployment in the country can also adversely affect a business.

People will not have enough money to purchase a firm’s product.

LABOR COSTS

High labor cost will result higher production costs. This will make a firm’s product

more expensive as compared to other firms affecting its sales and profit margin.

LEVELS OF DISPOSABLE INCOME AND INCOME DISTRIBUTION

High level of disposable income is good for business producing luxury goods. A large

disparity in income distribution will promote businesses dealing in luxury goods as well as

inferior goods.

89

TAXES

High level of taxes will lead to low disposable income and contraction of demand in

the economy. Business will find it difficult to attract consumers.

TARIFFS

Tariffs are taxes and imposed on imported goods. If the tariffs are low the domestic

market may be flooded with cheap imported goods and the local businesses will have tough

time selling their products.

POLITICAL FACTORS

LEGISLATION AND REGULATIONS

One issue that affects manufacturers and retailers of electronic goods is the disposal

of these products at the end of their life. Recycling is high on the public agenda. There are

government initiatives to promote more recycling. These initiatives are sometimes backed by

legislation.

GOVERNMENT INITIATIVES

Businesses also have to take into account the more general political ambitions of the

government. The current Conservative-led coalition government is cutting jobs in the public

sector and is hoping that the private sector will grow to create new jobs in the economy.

SOCIAL FACTORS

MEETING DIFFERENT CUSTOMER NEEDS

It is important that caters for more traditional customers, as 69% of the photo business is still

associated with producing standard prints. However, the company is responding to the

younger demographic by delivering its multi-channel strategy using modern technologies.

90

CREATING LOYAL CUSTOMERS

Consumers’ expectations are higher than ever. Today’s customers want products and

services on demand. They are not prepared to wait It is refurbishing many of its stores to

improve customer service.

TECHNOLOGICAL FACTORS

HOW TECHNOLOGY IS CHANGING DEMAND

The development of the internet is also having an impact on the market. Young

consumers are also much more willing and confident to experiment with new media. More

customers are using the internet for online casinos. The development of these new selling

channels has helped to push down prices.

TECHNOLOGICAL SOLUTIONS

Now days in global world of business it is necessary to acquire a latest & useful

technology to the business. For opening & running the business, the use of internet & online

services change the market. For example, before many years, the customers have to go to the

business place & then he/she can purchase the goods & services but through technologies

goods comes to the home.

OVERVIEW OF CASINO INDUSTRY IN INDIA

UNDERGROUND LOTTERY

Buying a lottery ticket is very common practice in every household of India. Both

urban and rural people are used to it. But there is a paucity of reliable data on

revenues/turnover in the gambling industry of India since much of the turnover is in the

illegal market. Roughly half is wagered legally, the other half, illegally. Lotteries are very

popular among backward states of India. Estimates suggest that the paper and online lottery

markets are worth Rs 350 billion and Rs 10 billion, respectively.

The annual turnover from horse-racing is Rs 10 billion in India. But from 'single-digit'

lottery or patta games to betting on politics, the illegal market is large and varied. In the

91

recent Indo-Pak one-day cricket series, the stakes reportedly ran into hundreds of billions.

The stakes on elections are estimated to be even higher, at about Rs,350-500 billion). Much

of gambling in India, therefore, is in the illegal market. The first and foremost benefit from

legalizing gambling will be revenue generation for states. Lately many Indian states have

realized the importance of the gambling industry.

CASINO GAMBLING IN INDIA

India is one country in central Asia with legal gambling. One of the most visible signs

of the legal gambling industry in India is the casinos that have sprung up across the states.

While they have their critics, they have the positive impact. Now online casinos

accommodate the patrons, who would otherwise be forced to travel a long distances to bet at

brick-and mortar casinos. This technology gives the customer the convenience and privacy of

gambling sitting at their own homes. Pressures of tourism are spurring the growth of casinos

and other legal gaming establishments in India; Pressure for the introduction of casinos in

India is developing from factors that include lack of 8 entertainment and leisure activities for

the tourists (and the) stagnant tourism sector stuck at about 0.4 per cent of world tourism.

Unexplored Gaming Opportunities in India have immense revenue potential. India has

a severe shortage of leisure and recreation infrastructure and so people go to Nepal, which

has casinos in five-star hotels. Casinos help create jobs, diversify the local economy and

reduce illegal gaming activity. The advocates of Casino dismissed the contention that they

boost crime, saying "most people use casinos for harmless recreation. “India is divided into

many regions with mega cities as nodal points. There are 5 cities in India which have 6 legal

gambling facilities available. The 6 gambling facilities consist of casinos and pari-mutuel

facilities. Legally the only types of gambling available in India are: casinos, casino-cruises.

Salcette has the most casinos in India with 2 casinos in it. Our database currently shows 4

gaming machines (slots, video poker terminals, etc) and 10 table games in Salcette. The

largest casino in India is Winners Casino and Hacienda de ora located in AltomonteMargao.

It has a total of 30 table games and 150 gaming machines.

INTERNET GAMBLING IN INDIA

92

The Internet is a complex web of computer networks that allows a person in one part

of the world to communicate by computer with another person located in another part of the

world. Internet gambling involves any activity that takes place via websites and that includes

placing a bet or wager. Internet gambling site enables one to wager on sporting events,

political races and other types of contests. Internet gambling is on the rise throughout India .

It's blossomed into a three billion dollar annual business. Law enforcement officers of India

used to say it's hard to contain its growth. Representatives of law enforcement agencies,

regulatory bodies, and the credit card and gaming industries expressed mixed views regarding

the vulnerability of Internet gambling to money laundering.

LOSS OF COMMUNITY CONTROL

If the people of given region believe that some gambling is good for economic

development, they can pass a law and must live with the consequences. But Internet gambling

has no such geographic limitations. Anyone with a computer is a potential player, even in the

most righteous community on earth. The problems of compulsive gambling do not go away,

and indeed their effects stay local. On the contrary all the benefits, such as potential profits,

taxes and jobs do not stay local, but instead get sucked off into cyberspace.

LACK OF REGULATION

There are no specific rules and regulations for internet gambling in India. When one is

playing virtual roulette in a virtual casino, after ten straight blacks one just knows the next

ball will be red. You swallow, hard, as you put down a $10,000 wager on red. It is more than

one ever dreamed of betting and frankly more than one can afford. It comes up black, again

so you lose. But the game is not fair. The WWW site sends your money to an uninhabited

island. But there is no authority to listen to your complaints

LACK OF INFRASTRUCTURE

But Internet gambling does not need huge infrastructural base. Expanding casino

gambling from an enclave in a city into a nationwide ``gaming'' industry required a

considerable investment in infrastructure and personnel. Massive hotels and powerful

politicians had to be bought, the latter to help steer reluctant legislatures towards legalizing

their business. But internet gambling is having no such bottlenecks.

93

Therefore Internet gambling is an essentially borderless activity that poses regulatory

and enforcement challenges. The legal framework for regulating it in the India and overseas

have to be more pragmatic one in India.

SOCIAL DIMENSION

Gambling propensity of people is deeply entrenched in the tradition and culture of

Indian society. Diwali is the most important Indian festival which is the time for new clothes,

new utensils, crackers, sweets, poojaand gambling. One reason for putting lights around the

house on Diwali is to light the way for Lakshmi, the goddess of wealth. It is believed that she

visits the houses of her devotees and bestows luck and good fortune where she chooses.

There are hundreds of rituals and traditions associated many festivals directly or indirectly

connected to gambling with regional variations in practices.

POLITICAL DIMENSION

Gambling in India has a unambiguous political dimension. It is well integrated with

the power structure of police, politicians and bureaucrats and local influential people. It has

very firm roots. Therefore there are no easy answers or quick-fix solutions for it. So any

attempt to control or limit the illegal economy must begin from the popular pressure. On the

control of soft activities such as gambling and prostitution, public opinion is always divided.

Some firmly argue that such activities should remain illegal on the ground of principle.

Others argue to decriminalize on practical grounds, and they advocate legalizing adult

prostitution and gambling. Particularly the casino gambling which is so wide spread as a way

to reduce corruption among certain segments of the police, politicians and high bureaucrats

and as such generate govt revenue. The real crux is that many people appreciate that branding

an activity as criminal but then failing to suppress it effectively creates a high profit in terms

of black money. The profits have a distorting impact on the economy and a corrosive impact

on law enforcement and on politics. This in turn breeds distrust of politicians and police.

Because of this distrust many people do not support decriminalization. They believe that the

existing illegal forms will persist under the existing form of protection.

94

LEGAL DIMENSION

There are many legislative measures governing lottery and gambling in India. In

recent times, with the greater acceptance of liberal values in India, it's harder to support a

moralistic ban. In any case, the enforcement capacity against "illegal gambling" is quite

miniscule. The Public Gambling Act, enacted in 1867, gives legal validity to gambling,

unless it's made a business to earn a profit or a commission. The interpretations of the Act are

such that they give enough leeway to the police to harass people. Sometimes police officers’

conduct raids only to extort money.

CHALLENGES IN THE GAMING INDUSTRY

Enormous amounts of data in multiple, disparate systems

Room inventory and games management in constant flux

Tremendous challenge in meeting customers’ expectations and preferences

Constant pressure of capturing, analyzing, and creating the right message/offer using

the right medium and at the right time

Highly regulated environment for gaming corporations

HOTEL AND CASINO OPERATIONS

Manage revenue and understand price optimization trending

Analyze table and slot machine profits

Understand machine placement, total usage, and total downtime

FINANCIAL ANALYSIS

Use predictive analytics to determine “theoretical value” of customers

Track performance of supplementary services such as dining, room bookings, and

percentage contribution to total revenue

CUSTOMER ANALYSIS

Offer products and services that match customer preferences

Target different cross-sell and up-sell offers based on prior purchase behaviour

95

Determine reinvestment levels and offer comps according to customer value and

profit

GAMING —CREATES VALUE THROUGHOUT THE INDUSTRY

ABOVE MAP

Provides focus points for discussion

Promotes an enterprise strategic perspective

Identifies gaps in the BI application architecture

Highlights ways of extending existing applications

Rapidly identifies the pain points within a department

Presents an overall vision for what could be done

96

PROCESS OF CASINO LICENCING

Before completing the attached license application form, please read the following

information:

The attached casino license application is comprised of three separate sections (Part A

– Casino Event Details, Part B – Casino Bank Account Declaration & Volunteer Worker

Applications, and Part C – Proposed Use of Gaming Proceeds) and must be completed in full

prior to submission. Applications will not be processed if all required information has not

been completed and supporting documents have not been included. Casino License

Applications must be submitted at least sixty (60) days prior to the scheduled casino event.

PART A: CASINO EVENT DETAILS

Please ensure all sections of the license application are completed in full by

completing the checklist on page 2 prior to submission.

The Casino License will be mailed to the Casino Chairperson. The license must be

displayed at the casino facility for the duration of the event.

PART B: CASINO BANK ACCOUNT DECLARATION

To ensure deposit of pooling revenue into the organization’s casino bank account, each

organization must provide accurate casino bank account information by completing the

attached form in full and attaching an original, unaltered, VOID cheque for the casino bank

account. The cheque must be preprinted with the legal name of the group or bank verification

will be required.

PART C: USE OF PROCEEDS WORKSHEET

It is mandatory for applicants to specify the intended use of gaming proceeds. Prior approval

must be obtained before disbursement of funds. Gaming proceeds must only be used for

AGLC approved objects which are essential to the delivery of the group’s charitable or

religious programs.

The organization’s List of Approved Use of Gaming Proceeds will be mailed under separate

cover to the organization address.

97

Cotton IndustryPRODUCTION OF COTTON IN NEPAL

ESTIMATED COTTON REQUIREMENT OF NEPAL

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Requierment of cotton

Requierment of cotton(millbale)

TABLE 2. 4AREA AND PRODUCTION OF COTTON, 1999/00 - 2010/11

AREA PROD. YIELD

YEAR (Ha.) (Mt.) Kg./Ha

1999/00 1229.3 743.7 6052000/01 1135.5 458.8 4042001/02 101.7 150 14752002/03 117.6 61.1 5202003/04 15.5 12.5 8062004/05 20.0 12.0 6002005/06 59.0 57.0 9662006/07 50.0 45.0 9002007/08 75.0 68.5 9132008/09 100.0 59.0 5902009/10 121.0 109.0 9012010/11 135 135 1000

98

Sequence of Garments manufacturing are given below in details:

1. Cotton Farming

After the flowers of the cotton plant have blossomed they fall off and a round green seed pod

called a cotton boll remains. The cotton boll ripens in the sun and its cellulose fibers expand

until they ripen and burst out of the boll. At this point the cotton plant is ready to be

harvested.

2. Cotton Harvesting

Although cotton used to be picked by hand, it is now almost entirely harvested mechanically.

The cotton is harvested either with a cotton-picking machine that twists the cotton boll from

the plant or a cotton-stripping machine that strips the entire boll from the plant. The harvested

cotton bolls are packaged into large bales for transportation to a cotton mill.

3. Cotton Ginning

Cotton bolls are processed in a cotton gin that removes the seeds and pods from the cotton

fibers. The gin cleans and dries the raw cotton and removes any debris by passing the cotton

over a series of fine combs. The combs also brush the fibers straight and align them to make

clean lint. The lint is pressed into large bales, which are categorized by professional cotton

assessors according to the staple length, color and cleanliness of the cotton, all of which

affect its value. The lint is usually sold and then sent to a textile mill to be turned into cloth.

4. Design/ Sketch

In the garment manufacturing the first step is designing the sketch for the dresses that have to

be prepared. For this purpose the designer first draw several rough sketches in the sketch

book. The designer does not go for details at this moment but he rather let his creativity flow

on the paper and he draws many sketches. Later these sketches are analyzed by a panel of

designers. They finally select few out of them. These few sketches are rendered in detail

separately or in the form of a single collection.

5. Pattern Design

Hard paper copy of each component of the garment of exact dimension of each component is

called pattern. The patterns also include seam allowance, trimming allowance, dirts, and

99

pleats, ease allowance, any special design etc affairs. Pattern design could also be done

manually or with the help of computer.

6. Sample Making

The first patterns are sent to the sewing unit for assembling them into garment. This is

usually stitched on calico or muslin which is an inferior quality of fabric and it reduces cost.

This sample is constructed to analyze the pattern fit and design too. After the sample garment

is stitched it is reviewed by a panel of designers, pattern makers and sewing specialists. If any

changes have to be made they are made at this time.

7. Production Pattern

The production pattern is one which will be used for huge production of garments. The

pattern maker makes the patterns on standard pattern making paper. These papers are made-

up of various grades. The most important component, the tissue paper pattern, is made from

the lightest and thinnest paper commercially available (it is not made at the pattern

companies). It is called 7.5 lb (3.4 kg) basis paper, meaning that a ream of it (500 sheets) only

weighs 7.5 lb (3.4 kg).

Garment patterns can be constructed by two means: manual method, CAD/CAM method.

Today many companies have developed CAD/CAM because of the ease of designing

patterns, fluency and precision involved which cannot be guaranteed with the manual

method. Investing once into the CAD/CAM unit is worth in itself. Many buyers around the

world prefer manufacturers who are using CAD/CAM methods. The production patterns

created in CAD/CAM can be stored easily and they can be modified at any point of time.

8. Grading:

The purpose of grading is to create patterns in different standard sizes. Grading a pattern is

really scaling a pattern up or down in order to adjust it for multiple sizes. Pattern sizes can be

large, medium and small or else there are standard patterns of size 10, 12, 14, 16 and so on

for different figure and statures sizes. This is generally how we get S M L XL XXL sizing.

Pattern grading by manual method is a cumbersome task because the grader has to alter the

pattern on each and every point from armhole, to neckline, sleeve cap and wrist etc. by using

CAD it is much easier and faster.

9. Marker Making

100

All the pattern pieces for all the required sizes are arranged the paper in such a way so that

maximum number of garments could be produced with minimum fabric wastage. Markers are

made for 6, 12, 18, 24 etc. pieces. Marker is also useful to estimate fabric consumption

calculations. Markers are laid in such a way so that minimum possible fabric gets wasted

during cutting operation. After marking the garment manufacturer will get the idea of how

much fabric he has to order in advance for the construction of garments.

10. Fabric Cutting

On the fabric lay/spread the marker paper is placed carefully and accurately, and pinned with

the fabric to avoid unwanted movement or displacement of the marker paper.

The fabric is then cut with the help of cloth cutting machines suitable for the type of the

cloth. Computerized machines that use either blades or laser beams to cut the fabric in desired

shapes.

11. Sorting/ Bundling

After cutting the entire fabric lay, all the garments components in stack form is shorted out as

per size and color. To avoid mistake in sorting, it is better to use code number on each

pattern.

The sorter sorts the patterns according to size and design and makes bundles of them. This

step requires much precision because making bundles of mismatched patterns can create

severe problems. On each bundle there are specifications of the style size and the marker too

is attached with it.

12. Sewing or Assembling

Sewing machines of different types are arranged as a vertical line to assemble the garments.

Sequence of types of sewing machine arrangement depends on sequence of assembling

operations. Number of sewing machine arrangement per line may be up to 60 depending on

design and output quantity of garment.

The sorted bundles of fabrics are now ready to be stitched. Large garment manufacturers

have their own sewing units other use to give the fabrics on contract to other contractors.

Stitching in-house is preferable because one can maintain quality control during the

processing.

101

13. Inspection

Each and every garment after sewing passes through the inspection table/ point, where the

garments are thoroughly and carefully checked to detect/find any defect if present in the

garment. The defects may be for example variation of measurement, sewing defect, fabric

defects, spots etc. if the defect is possible to overcome, then the garment is sent to the

respective person for correction. If the defect is not correction able, then the garment is

separated as wastage.

Open seams, wrong stitching techniques, non- matching threads, and missing stitches,

improper creasing of the garment, erroneous thread tension and raw edges are some of the

sewing defects which can affect the garment quality adversely. During processing the quality

control section needs to check each prepared article against these defects.

14. Pressing/ Finishing

After passing through the inspection table, each garment is normally ironed/ pressed to

remove unwanted crease and to improve the smoothness, so that the garments looks nice to

the customer. Folding of the garment is also done here for poly packing of the garments as

per required dimension.

The next operations are those of finishing and/or decorating. Molding may be done to change

the finished surface of the garment by applying pressure, heat, moisture, or certain other

combination. Pressing, pleating and creasing are the basic molding processes.

Creasing is mostly done before other finishing processes like that of stitching a cuff. Creasing

is also done before decorating the garment with something like a pocket, appliqués,

embroidered emblems etc.

15 FINAL INSPECTION

It is the last stage of inspection of the manufactured garments on behalf of the garment

manufacturing organization, to detect any defective garments before packing.

102

Quality control in terms of garment manufacturing, pre-sales and posts sales service,

delivery, pricing, etc are essential for any garment manufacturer, trader or exporter. Certain

quality related problems, often seen in garment manufacturing like sewing, color, sizing, or

garment defects should never be over looked.

16 PACKING

After final inspection, the garments are poly-packed, dozen-wise, color wise, size ratio wise,

bundled and packed in the cartoon. The cartoon is marked with important information in

printed form which is seen from outside the cartoon easily.

The finished garments are finally sorted on the basis of design and size and packed to send

for distribution to the retail outlets.

17 DISPATCH

The cartoons of the manufactured garments are delivered or placed in the dispatch

department or finished product goes down, from where the garments lot is delivered for

shipment.

INDIAN COTTON AREA AND PRODUCTION

Since launch of "Technology Mission on Cotton" by Government of India in February

2000 significant achievements have been made in increasing yield and production

through development of high yielding varieties, appropriate transfer of technology, better

farm management practices, increased area under cultivation of Bt cotton hybrids etc. All

these developments have resulted into significant quantitative increase in cotton

production and country has become self-sufficient in cotton production barring few

years. The yield per hectare is about 300 kg/ha for more than 10 years, has increased

substantially and reached a level of 554 kg/ha in cotton season 2007-08.

The fundamental changes that taking place in the realm of cotton cultivation in the

country, are having the potential to take the current productivity level near to the world

average cotton production per hectare in the near future. Apart from meeting the

103

increased cotton consumption by domestic textile industry, country may have sufficient

surplus cotton to meet the cotton requirements of importing countries.

Source: cotton advisory board

Area, Production and Yield for last Twelve years:

Area in lakh hectare/Production in lakh bales/Yield kgs per hectare

Year

Area in

lakh

hectares

Production

in

lakh bales

Yield kgs

per

hectare

2000-01 85.76 140.00 278

2001-02 87.30 158.00 308

2002-03 76.67 136.00 302

2003-04 76.30 179.00 399

2004-05 87.86 243.00 470

2005-06 86.77 241.00 472

2006-07 91.44 280.00 521

2007-08 94.14 307.00 554

104

2008-09 94.06 290.00 524

2009-10 103.10 305.00 503

2010-11 111.42 325.00 496

2011-12 121.78 353 493

2012-

13*116.14 334 489

Source: Cotton Advisory Board *Projected

Production in 2007/08 totaled 5,355,000 tons, with an estimated yield of 567

kilograms/hectare. Indian production grew rapidly after the introduction of genetically

modified cotton seed in 2003. Indian yields have risen 74%, and the cotton harvest has

grown 61%.

The country has also developed eco-friendly colored cottons through hybridization and

mutation breeding. In addition, India produces 8.6 million bales of jute fibre, a

substantial increase from 1.6 million bales about 50 years ago. Introduction of high

yielding varieties and hybrids and improved agronomic practices are mainly responsible

for the increased production. India has the largest area under cotton, but its cotton

production is just 15.8 million bales, much lower for the vast area, the crop occupies.

INDIAN CONSUMPTION

2012/13 cotton consumption is expected to increase to 26 million 170 kg bales. The

spinning industry is still in the process of recovering from the losses incurred during

2010/11 when India’s cotton export restrictions kept Indian yarn prices below

international prices and encouraged record cotton consumption followed by a drop in

cotton prices that saddled mills with expensive stocks of yarn and cotton. The losses

incurred during that period continue to affect mill operations.

105

2011/12 consumption is estimated at 25.3 million 170 kg bales (18.2 million 480 lb

bales, 4.0 mmt). Average monthly consumption is expected to improve slightly to 1.95

million 170 kg bales per month during the February to July period as mills benefit from

ready supplies as a result of the current ban on exports.

The textile industry in India is one of the largest industries in the country. During the last

two decades, there is a phenomenal growth in this sector in terms of installed spindle and

yarn production, installation of open-end rotors and setting up of export-oriented units.

The growth and modernization of the spinning industry has led to a substantial growth in

cotton consumption. The mushroom growth of spinning industry and its modernization

has led to sustained growth in cotton consumption. But India still has to go long way to

catch up with the world average yield of 735 kg per hectare as of 2009 - 10. India’s yield

position as of today is only 505 kg per hectare.

INDIAN TRADE FLOW

Cotton consumption has witnessed a sustained increase since 2003-04 onwards due to

growing demand for Indian textiles and subsequently, there has been considerable

expansion and modernization of the textile mills.

Even though the Indian cotton consumption has increased at a rapid pace in the last few

years, it has not kept pace with the growth in domestic cotton production, which has led

to a surplus of production since 2003-2004.

As a result, India has emerged as one of the top exporters of raw cotton in the world.

Currently, India is the second-largest exporter of cotton after the USA and mainly

catering to markets in Bangladesh, China and Pakistan. However, ELS (extra long

staple) cotton is imported in India from Egypt and USA.

106

An estimated value in INR in Crores for cotton export and import are as follows:

Source: www.indianmbc.com

India is a major exporter of cotton. After emerging as the second largest exporter of

cotton behind the U.S. for two consecutive years, India’s cotton exports during 2008/09

faltered as the high minimum support price (MSP) made Indian cotton uncompetitive in

the international market.

India’s exports reached 751,000 tons in 2005/06 and continued to climb in subsequent

seasons (960,000, 1,500,000, tons in 2006/07 and 2007/08, respectively). In 2008/09

estimated at 450,000 tons. Major export destinations are Bangladesh, Pakistan, China

(Mainland) and other Far-east countries.

Imports have risen slightly. Imports were high at the turn of the century (520,000 tons in

2001/02) but dropped due to the rapid expansion of the domestic cotton industry.

However as of July 2008, the Indian government abolished the duty on cotton imports

into the country boosting imports to 130,000 tons in 2008/09. Most of the imports are

Extra Long Staple (ELS) and cotton from the U.S., Egypt, and West Africa.

107

FACTORS IMPACTING THE FUTURE COTTON PRODUCTION

a) Population Growth:

Over the next 15 years, it is likely that there will be more than a billion extra people living

on our planet; with global population growing from 6.9 billion to reach 8.1 billion by

2025.2 Populations in developing countries is expected to rise rapidly, whilst population

in the developed world will remain largely stable. This will have significant impacts on

the labor force and nature of the demand for textiles.

b) Resource scarcity:

Against the backdrop of population growth, the key resources needed to support that

growth are becoming scarcer. For example, 20,000 – 50,000 sq km of arable land is lost

each year through land degradation.4 by 2025; 1.8 billion people are expected to be living

in countries or regions with absolute water scarcity. As resource scarcity5 increases,

resource costs are likely to become increasingly high and volatile, with massive impacts

on the cost of production and supply security.

c) Increasingly extreme climate change impacts:

cotton production is likely to suffer from the predicted rising temperatures, decreased soil

moisture and more extreme weather events and flooding.8 Although effects will vary by

region, the overall impact of climate change on global agriculture is likely to be negative.

This is likely to exacerbate food security concerns in the future, possibly leading to

different land use priorities.

EXPORT BAN

With the announcement of cotton export ban on March 5, 2012, India was considered a

capricious partner in the global cotton market. Everyone started analyzing the news as

“China’s Loss” or “United States’ gain.”

March 11, 2012: India has reversed a ban on cotton exports. There was an angry reaction

from farmers when the government announced the policy. The government justified the

ban by saying that India needed to protect supplies for its own cotton mills. The ban is

India's latest effort to balance export revenue against the needs of its textile industry.

108

Last year, the national government had capped cotton exports, but by August it had to

remove those restrictions because India's cash-strapped textile mills weren't buying the

fiber. It extended the unrestricted exports for the 2011-12 crop years. Exporters have

shipped out 9.4 million bales of cotton, and The Indian government had expected it would

have 8.4 million bales available for export based on its projections for domestic demand.

Reason for Ban on Cotton Export

Farmers currently have a number of alternate planting options. High prices for peanuts,

soybeans, guar and maize (corn) could prompt farmers to shift away from cotton in

central, western and northern India. Farmers may also see the higher prices for alternate

crops as an opportunity to plant something other than cotton in an effort to improve soil

conditions and hedge their risk.

The significant amount of cotton shipped in the first five months of the Indian cotton

season (October 2011 to February 2012) and fears that the quantity remaining in the

country would not be sufficient for the needs of domestic mills.

Indian government´s move came amid mounting pressure from its local hosiery

industries that underwent massive lay-offs due to shortage of cotton yarn caused by

unrestricted exports. The industry provides direct employment to around a million

people in India that exports around 720 million kg of cotton yarn annually.

India has already exported 9.4 million bales higher than the projected export surplus

quota of 8.4 million bales due to strong demand from China. This excess led India's

Directorate General of Foreign Trade (DGFT) to ban shipments, to ensure steady

supplies for the local textile industry, the country's largest employer after agriculture

and which accounts for some 4 percent of GDP

109

Transport Industry

Introduction to Nepal Transport Industry

NEPAL is one of the richest Countries in the world in terms of bio-diversity due to its unique

geographical position and altitudinal variation. The elevation of the country ranges from 60

M above sea level to the highest point on earth, Mt Everest at 8,848 Meter, all within a

distance of 150 dm resulting into climatic conditions from sub-tropical to Arctic. Anyone will

be wondered by its amazing diversity within very short span of length. So why not try once

and unleash yourself.

BY AIR:

Nepal Airline is the national flag carrier of Nepal with Flights to and from Delhi. Other

international airlines operating to and from Kathmandu are:

- Indian Airlines (Delhi, Kolkata)

- Jet Airways (Delhi, Mumbai)

- Jet Lite (Delhi)

- Spice Jet

- Buddha Airlines

BY LAND:

Visitors coming to Nepal by land must enter only through one of these entry points:

1- Kakarbhitta,2- Birgunj3- Belhiya, Bhairawa4- Nepalgunj5- Dhangadi6- Mahendra Nagar (Nepal-India Border),7-Tatopani, Kodari (Nepal China Border).

110

Approx. distance from border town to Kathmandu

S.No. Border Town in Nepal Nearest town in neighboring

country

Distance from border town

to Kathmandu

1 Kakarbhitta Siliguri(India) 597 km

2 Birgunj Raxaul(India) 278 km

3 Bhairahwa Sunauli(India) 282 km

4 Nepalgunj Rupadhiya(India) 520 km

5 Dhangadi Gauriphanta(India) 664 km

6 Mahendernagar Banbasa(India) 705 km

7 Kodari Hasha(China) 114 km

Source: http://www.nepalembassy.in/tourism.htm#reach

http://www.bharatonline.com/nepal/travel-tips/local-transportation.html

Local Transportation in Nepal

Local transportation is not a problem in Nepal.

Different modes of transportation are available

according to your budget and preference. Try and

stick to the modes that are normally preferred by

the visitors such as cabs and auto-rickshaws.

Following are the different modes of local

transportation in Nepal:

Local Bus

These are arguably the cheapest mode of transportation in Nepal but are too crowded for

comfort. It is very likely that you will have to share your seats with poultries at times. Also,

on occasions, be prepared to wait, as some buses will not move until full to a certain quota.

Tourist bus

These are relatively comfortable but are only operational on wide inter cities roads. This is

111

always full of tourists therefore book a few days ahead with any travel agent (or your hotel

will book it for you). A welcome break from local buses but not much safer. The only saving

grace is the fact that everybody gets a seat to sit.

Rickshaw

these are good for short jaunts if you don't have much luggage and don't mind a bit of cramp

space. Bargain before you get in, and don't be afraid to walk away and try another.

Tempo

these come in two types. One is a three-wheeled electric or propane-powered microbus for

10-13 passengers. They run in different routes around the city. The other type is a newer

Toyota van running the same routes at a higher price and a bit faster and safer. It is more

comfortable and is slowly taking the place of former.

Taxis

There are two types of taxis in Nepal. The first one is called "private", which can be hired

anywhere both on route and day basis, the other one is interestingly called "10 Rupee", which

don't leave

International Airlines in Nepal

Tribhuwan International Airport at Kathmandu is

the sole international airport in Nepal. The

airport is well equipped to handle international

flights of all kind, make and size. The airport has

good transit facilities though service is not world

class. The officials are co-operative and the

immigration process is very simple.

As far as International flights are concerned, Nepal has lots of them. Apart from the

government owned Royal Nepalese Airways, Nepal also has a couple of other operators such

as Yak and Yeti Airlines and Cosmic airways. As far as International operators are

concerned, 50 different airlines from all over the world provide their service to Kathmandu.

All the major airlines in the world such as Virgin, Lufthansa, Aeroflot, Emirates, Air India,

PIA and British Airlines provide their service in Kathmandu,

112

Kathmandu has direct or indirect flights from nearly all the major cities in Eurasia and

Americas. There are direct flights to Asian cities like Delhi, Mumbai, Dhaka, Karachi,

Islamabad, Shanghai, Singapore, Tokyo, Dubai, Doha and Abu Dhabi. Among the European

cities, flights are available from Paris, London, Berlin, Berne, Frankfurt, Vienna, Munich,

Moscow and Amsterdam. Apart from that, regular flights are available from New York, Los

Domestic Airlines in Nepal

Officially, Nepal has 48 airports but only 8 of

them have paved runways. Most of these airports

are at the transit cities and some in bigger cities

such as Kathmandu and Dharan.

As far as domestic airlines are concerned, Nepal

has got a good network of private airlines. The

government has given license to a dozen or two private airlines to operate in Nepal. These

airlines generally ply small Dakota planes that are mostly 20-seater. Bigger planes only

operate to transit cities such as Dharan, Biratnagar, Nepal Gunj and Kathmandu. Tickets are

easily available and rides are normally comfortable. Inter country journeys are very short. In

fact, by the time you settle yourself you are hovering over your destination. High and

medium end hotels have in house travel agents who arrange tickets on a nominal commission.

Following is the list of the Domestic operators in Nepal: -

AIRLINES DESTINATION PHONEAsian Airlines Thamel 4410086/4423273Air Ananya Tripureswor 4220172/4222948Avia Club Maharajgunj 4412830Ballon Sunrise Lazimpat 4424131Buddha Air Hattisar 4417802/4429739Dynasty Aviation Panipokhari 4410090Fishtail Air Tinkune 4485186/4494107Flight Care 4414422Gorkha Airlines New Baneswor 4475855/4436576Lumbini Airways New Baneswor 4482728/4482725Manang Air Tinkune 4496253Mountain Air Lazimpat 4413114/4412461Necon Air Sinamangal 4473335/4473860Karnali Air Kalimati Tole 4473141/4488553Royal Nepal Airlines New Road 4220757Shangrila Air Kamalpokhari 4410026/4423433Skyline Airways

113

Entry & Exit Points in Nepal

It is very essential to know about the entry and exits point of any country. This helps you in

avoiding unnecessary troubles. As far as Nepal is concerned, there are only 8 government

approved entry points. These inlets can also be used for getting out of Nepal. There is

absolutely no problem if you plan your entry and exit from the separate points and fill up the

prescribed forms. Following are the government approved entry/exit points of Nepal: -

ENTRY/EXIT POINTS RESPECTIVE REGIONS

Tribhuvan International Airport Kathmandu

Kakarvitta, India Border Eastern Nepal

Birgung, India Border Central Nepal

Kodari, China Border Northern Nepal

Belhia, Bhairahawa Western Nepal

Jamunaha, Nepalgunj Mid-Western Nepal

Mohana, Dhangadhi Far-Western Nepal

Gadda Chauki, Mahendranagar North-Western Nepal

Source: http://www.nepalembassy.in/tourism.htm#reach

114

PESTLE analysis of Transport Service Industry in Nepal

Environmental Analysis of Public Transport Service Industry in Nepal

Tulsi Jung Basnet

Ace Institute of Management

Public Transport Service Industry in Nepal: An introduction

We all make use of the services provided by transportation companies. We probably have

caught the bus in town or travelled on a school bus or made an intercity journey by Nepal

Yatayat or Safa Tempo. Some of us have travelled on a super green energy-efficient Trolley

bus. We know that, Nepal does not have a long history of transport service industry. Even

though, with a population of 25 million, Nepal is a potential market for transport

industry. Public transport is popular as a cheap, easy and reliable access of transportation in

the country. Sajha Yatayat was established as first public transport industry in Nepal. It was

established on B.S.2018,Chaitra 3rd as per the cooperative act B.S. 2016. On Shrawan 1,

2019, Sajha Yatayat started providing services with 6 buses and 14 employees. It was

successful in its early days and created its brand image as good service provider. Besides the

Sajha Yatayat, the trolley bus also provides the service as public transport in the Kathmandu

valley. At present other private entrepreneur are attracted in public transport industry. Now

popular public transport services in Nepal are Nepal Yatayat, Makalu Yatayat, Agni Yatayat

etc.

External influences

Running a business would be simple if the chief executive only had to think about what went

on inside the business. They could concentrate on internal decisions, such as determining

routes, timetables and operating buses. However, a business planner has to understand what

goes on outside the business. Businesses are able to identify external changes that may affect

it by carrying out a PESTEL analysis. This is a business tool in which each of the letters in

PESTEL describes a type of change that takes place in the external business environment

Many of these external changes may be outside the control of the company, for example, new

government legislation. Some changes may present a threat to the business, such as a

Competitor using new or improved technology. Social changes may bring opportunities, for

115

example, migrant workers bringing new skills to the service market. Environmental impacts,

such as those caused by carbon dioxide (CO2) emissions or the management of waste, are of

particular concern to businesses. A business must assess what external changes are likely and

which it needs to react to or take advantage of. Business planners can then create strategies to

help the business respond effectively.

An industry has to work within a changing environment and respond to many factors over

which it may have no control. They are 'external' factors because they are problems arising

from groups or forces outside of the industries' control. When assessing the main impact of

external factors on any business or organization, it is helpful to group these together using the

acronym PESTLE.

This stands for the four areas that represent the most common external influences. These are:

Political and Legal factors – for example, new laws and regulations or decisions made

by governments

Economic factors – changes in the economy, people's spending power, patterns of

wealth

Socio-cultural factors – changes and trends in society, for example, the number of

people aged over 60 in society

Technological factors – changes in techniques or equipment that can lead to the

development of new goods and services or new ways of doing things.

Economic Factors

The most significant of all external forces with which a business must contend is the

economic environment of the country. The general economic conditions and trends are the

most crucial to the economic viability and success of the business. The economic

environment consists of factors that affect consumer purchasing power and spending patterns

and it depends on income level, price, savings, and availability of credit. The purchasing

power of Nepalese people is very low due to political instability, higher inflation rate and

unemployment. The recent slowdown economy is principally led by contraction in

manufacturing and tourism industry, and steep drop in exports.

Businesses need to make money to continue to exist. They do this by listening to customers

to ensure they keep their customers and attract new ones with good services that customers

want and need. It is extremely important for businesses to respond to changes in demand

116

from customers. Market research showed that Nepalese passenger wanted cheaper and safer

transportation services and public transportation fulfil the public demand.

Another economic factor affecting the transport service is increasing fuel price. High fuel

price encourages passenger to switch from using private vehicle to more economical public

transport.

Overcrowding in cities like Kathmandu also encourage people to switch to other forms of

transport. For example, in major cities where parking is inconvenient, cheaper and wide

available public transports are easy.

Political Factors

The country in the present day is in the transitional phase. The Constituent Assembly Polls

being the major issue so various other matters are overlooked. The existing political

instability as the constituent election has successfully completed is anticipated to be stabilize,

which will certainly help the business environment to become favorable in the country. With

so much of instability in Nepalese political sector, it is apparent that the rules and regulations

are unstable as well. Hence, it is very important for any company to be extra cautious and

adaptive to the changes in the policies regarding the laws and legislations.

To sum up, because of the unorganized political sectors it is pretty hard for business bodies

to carry on the plans within the specified time frame. Thus, the unnecessary red tape and the

bureaucratic systems of the government have been creating an intense problem for the service

sector to grow. Nepal is facing increasing inflation day by day. The purchasing power of

people hence, has become much less. People cannot afford to own private vehicle so there is

a need of much cheaper mean of transportation to travel. Public transportation service

therefore must identify and grab the market by establishing brand, service at a low cost,

reliable and convenient method to travel and cater the needs of deprived Nepalese all over the

country.

However beside private owned transport services, government protected public transport

service is in loss due to excess political influence. These organizations have become a

recruitment centre of political party. Due to over politicization the problem of over staffing,

mismanagement and lack of leadership occurs which were the factors responsible for its loss.

So these organizations instead of making a profit are running into irrecoverable losses.

117

Socio-cultural Factors

Socio-cultural environment is composed of various class, structure, beliefs, values, social

institutions, accepted patterns of behavior, customs of people and their expectations. Hence,

any industry must take into consideration the socio-cultural environment for developing its

policy and strategy. Socio-cultural environment influences the demand and supply of goods

and services.

Social trends are one of the key factors affecting a business. People's buying patterns and

service utilizing pattern are determined by trends. Just as the demand for some popular

clothes are determined by fashion, demand for mean of transport is determined by social

trend and income level. Transportation means are always changing. The trend of leaving the

country and staying abroad is arising for better lifestyle and to enhance their living condition.

Lack of opportunity for youth, political instability, insurgency and educational purposes are

major reasons for leaving the country. Due to this the income level of families has rise.

Currently most medium class people are attracted towards car and motorbikes. But due to

highly increased fuel price and shortage of fuel, people are shifting towards public

transportation.

Society's habits and tastes are changing. People are being educated and are more aware of the

importance of the environment and health’s and is becoming 'green consumers'. Green

consumers prefer goods and services that are environmentally-friendly' and which have less

impact on the environment and is good for health. The green consumer, for example, prefers

to travel by bus or cycle.

Technological Factors

Technological environment refers to all the technical surroundings that affect business. It

includes skills, methods, systems and equipment. Technology consists of the forces that

create new technologies creating innovative services and market opportunities. The most

dramatic force shaping people's lives is technology.

Businesses are continually developing new technologies to provide the best solutions for the

market place. Intelligent companies find out what the most appropriate technologies are for

their businesses and use them. This is particularly true in transport.

A good example of change in technology is buses that lower the floor for easy entry. These

provide better accessibility for disabled and elderly people. Technologically, Nepalese

transportation industries are far behind the international transport industry.

118

Various types of sophisticated technologies are invented and implemented in international

transportation Service. Services like path navigator, wireless communication in vehicle and

other safety measures are already in use in international industry but in Nepal it is lagging

behind. Crowded and the unsafe module of the procedure are till we considered. That makes

the capacity below the actual level and makes difficult to compete with other. It ends up with

a poor working condition for the employees.

Legal

Responsible businesses not only abide by the law, they seek to create standards above

minimum requirements. Public transportation has to be aware of a number of legal factors.

Legal changes that affect business are closely tied up with political ones. Many changes in

the law stem from government policy. The Department of Transport Management (Dotm)

government's transportation services governing body used to recommend the transportation

fare. Many other laws are nation-wide, for example, the standards for bus transport

emissions. Public transport must make sure that all its buses meet these requirements. It has

to anticipate and prepare to meet future legal changes. From 2010 Nepal is entering in WTO,

as part of an initiative called Carbon Reduction Commitment, public transport and other

companies will need to buy carbon credits. These credits will permit companies to generate

specific quantities of carbon emissions.

Transport infrastructure in Nepal

In the age of globalization, transportation and communication networks are the backbone of

an inter-connected world. Despite this integral role, these networks are also the source of a

number of unintended negative environmental, economic, social and political effects.

Advances in transportation technologies have sustained networked patterns of social and

economic life in time and space. The increase in mobility and travel comes along with

disintegrative social processes. Mobility burdens of commuting and business travel

undermine traditional social forms such as families, neighbourhoods and communities. New

inequalities, social exclusions and risks arise in connection with unequal availabilities and

accessibilities of transportation means. Mobility is an essential human need. Human survival

and societal interaction rely on the ability to move people and goods from one place to the

other. Efficient and effective mobility systems are essential factors for economic

119

development. The global trade cannot occur without systems to transport people and goods

cheaply and efficiently. Infrastructure development, particularly transport infrastructure, is a

prerequisite for the economic development. Transport is the need of the people to be

accessible for different activities like visiting a doctor, going to work, visiting relatives etc.

Transport is an integral part of most public interventions targeted at meeting the basic needs

of the poor people (for example, food, education and health care). In the absence of adequate

access roads, poor farmers will not produce cash crops for urban populations, may not send

their children to school, or make use of preventive health care. In emergencies, they cannot

even reach the hospital in times

Without adequate transport, poor people in rural and urban areas will remain in physical

isolation and “trapped” in poverty. It is an intermediate service to a wide range of productive

activities in almost all economic sectors. Without transport, production inputs such as raw

materials, fuels and labour from different locations cannot take place, and products cannot be

delivered to markets and consumers. Lower transport cost results in stimulating trade, makes

specialization and economies of scale possible, and helps widen the market, thus promoting

economic growth.

IMPACT OF INTERNATIONAL ORGANISATION ON TRANSPORT INDUSTRY

IN NEPAL

Special Arrangement for Trade between EC (European Commission) and Nepal:

The European Commission signed an agreement with the Government of Nepal in the year

1996, since then EC has played an important role in the development of Nepal in all sectors

needing attention including Promotion of Trade.

Nepal’s Accession to WTO (World Trade Organization) supports Trade Promotion

between the EU (European Union) which makes Nepal a beneficiary to the preferential trade

treatment with the EU under the EBA (Everything but Arms) Regulation, adopted by the EU

council in 2001. EBA Regulation grants duty-free access to imports of all products

from LDCs (Least Developed Countries) with any quantitative restrictions, except for

Arms and Ammunitions.

120

Special Economic Zones

A Special Economic Zone (SEZ) is a geographical region that has economic laws that are

more liberal than a country's typical economic laws. The category 'SEZ' covers a broad

range of more specific zone types, including Free Trade Zones (FTZ), Export

Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban

Enterprise Zones and others. Usually the goal of a structure is to increase foreign

direct investment by foreign investors, typically an international business or a

multinational corporation (MNC).

MULTILATERAL AND BILATERAL AGREEMENTS OF NEPAL

Multilateral agreements of Nepal

The country of Nepal takes part in two multilateral agreements:

The South Asian Free Trade Area, SAFTA, is a multilateral agreement reached on 6Th

January 2004, which created a free trade area in Bangladesh, Bhutan, India, Maldives, Nepal,

Pakistan and Sri Lanka. The seven governments signed a framework agreement to promote

and sustain mutual trade and economic cooperation within the SAFTA region through the

exchange of concessions, reducing customs duties of all traded goods to zero by the year

2016.

SAFTA (South Asian Free Trade Area):

The South Asian Association for Regional Cooperation, SAARC, is an organization of South

Asia n nations, founded in December 1985, dedicated to economic, technological, social, and

cultural development, emphasizing collective self - reliance. Its eight members are

Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

SAARC (South Asian Association for Regional Cooperation):

Its main objectives are:

• To promote the welfare of the people of South Asia and to improve their quality of life

• To accelerate economic growth, social progress and cultural development in the region and

to provide all individuals the opportunity to live in dignity and to realize their full potential

121

• To promote and strengthen selective self-reliance among the countries of South Asia

• To contribute to mutual trust, understanding and appreciation of one another's problems

• To promote active collaboration and mutual as assistance in the economic, social, cultural,

technical and scientific fields

• To strengthen cooperation with other developing countries

• To strengthen cooperation among themselves in international forums on matters of common

interest

A. Bilateral agreements of Nepal

The Government of Nepal has signed Bilateral Air Service Agreements and Memorandums

of Understanding with 36 different countries since 1963 (see table below), despite the fact

that until now 22 of them have still no direct flights to or from Nepal. That is because

currently not all of the countries with an air service agreement have possibilities of tourism

promotion to or from Nepal.

Provisions of the air service agreements provide for over 5. 25 million seats per annum to

and from Nepal. However, nowadays not even 45% of this capacity is being utilized by the

operating airlines to Nepal (only 2. 36 million seats per annum in total).

Winter schedule program of 28 airlines from 14 countries during October – March 2012

settled 47, 057 seats per week. Summer schedule prepared from March to September 2012

by 27 airlines produced 43, 710 passenger seats, 890 cargo tons and an overall program of

255 flights per week.

Bilateral Air Services Agreements with Foreign Countries

Memorandums of Understanding

122

• The current bilateral agreement with India establishes a seat capacity provision of 30, 000

seats per week and unlimited air cargo flights between six metropolitan cities of India and

Nepal. On January 2011 21 potential tourist destinations were opened for cross border flights

with unlimited seats, a milestone in Nepalese civil aviation.

• Similarly, the agreement with China provides for almost 10, 000 seats per week to seven

Chinese cities, with two beyond points to Osaka and Seoul. The air traffic to the sacred city

of Lhasa is restricted to a maximum of 14 flights per week. Air services to Kai lash area, in

the Tibetan region, are being explore

Opportunities for India in Transport Industry at Nepal

Investment Climate: SWOT Analysis of Nepal

Strengths

■ Location between the two potentially largest markets in the world: India and China

■ Macroeconomic stability and a relatively liberal economy

■ Trainable and low-cost workforce

■ Substantial natural and cultural assets

■ Small and accessible bureaucracy and a generally business-friendly Government Foreign

Investment

123

Weaknesses

■ Landlocked country

■ Poor infrastructure and mostly unskilled workforce

■ Rigid and intrusive labour legislation

■ Political instability, weak implementation and persistent corruption

Opportunities

■ Tourism, including sports and adventure tourism, health tourism and cultural tourism

■ Hydropower generation and infrastructure development generally

■ Small and accessible bureaucracy and a generally business-friendly Government

Threats

■ uncertain political climate

Source: UNCTAD

Govt. forms new panel for Nepal-India Pipeline project

The government has formed yet another committee to speed up construction of much-

delayed 41km Nepal-India cross border petroleum pipeline project. At pre-sent, a

committee led by the National Planning Commission (NPC) Vice Chairman Dipendra

Bahadur Kshetry is studying the project. The new committee has been formed under

the chairmanship of Lalmani Joshi, secretary of the Ministry of Com-merce and

Supplies (MoCS).

The new committee has been entrusted to recommend necessary ideas to the NPC on

construction and operation modality, technical, resources among other issues to help the

proposed project ahead without any obstruction, Kshetry said. “If the ideas submitted by the

new committee are reasonable, we will approve the project.”He informed that the NPC

had also sought suggestion from the committee on whether the project could be

developed with international resources. “The Indian Oil Corpo-ration (IOC) has expressed

its interest to invest in the project,” he said, adding that the project, which has been

124

in limbo since a long time, needs a fast-track decision and that the ministry’s suggestion

in that regard would be very helpful.

The project has been estimated to cost Rs 1.6 billion besides costs for the land acquisition. A

pre-feasibility study in 2004 and a technical study in 2006 had declared the project

economically viable, provided the pipeline is operated unhindered for 20 years. The

project is envisaged to reduce leakage and ensure supply cleaner and cheaper fuel and

also bring relief from frequent shortages caused by strikes.

A joint-venture model with equity participation of the NOC and the IOC was planned when

the government had approved the project in February 2010. But in March 2011, Nepal and

India dropped the JV model and agreed a new modality, whereby the two countries

would construct the pipeline separately on their respective territories, and it would then be

linked after signing a bilateral pipeline treaty.

NICCI e-Newsfla

125

Carpet Industry

Nepal's carpet sector is one of the main economic contributors that play a important role in

many areas of the country's well being. However, this sector has seen a major slump in recent

years that is related to supply constraints, environmental problems and management

inefficiency. Implementation of pollution prevention strategies has brought noteworthy

changes in similar sectors elsewhere in the world. so, Nepal's carpet sector can also benefit

from such strategies. There is certain effort that the carpet industry of Nepal is facing.

Nepal, a developing country, has profound potential on information technology, which may

solve the problem of landlockedness and trade and tariff barrier. The opportunities on

garments, carpets and other agriculture and service related productions and good right of

entry to herbal production and Ayurvedic medicines cannot be overlooked.

History of Carpet Industry in Nepal

The art of weaving is an old tradition in the kingdom of Nepal

especially in the mountains region of the country. Radii, pakhi,

bakkhu.Darhi are well known Nepalese products produced in the

regions using indigenous wool. The marketing of these products was

confined to the domestic market.

The development of an export quality carpet was initiated with the

influx of the Tibetan refugees in the early sixties. Credit goes to the

Swiss Agency for Technical Assistance (SATA) for their contribution, through financial

& technical support to the Tibetan refugee’s re-settlement programs. In the beginning, it

was launched as a source of livelihood for the Tibetan refugees and marketing was

limited to tourists visiting the kingdom. Efforts to gain access in the international

market arena paid-off in 1964 when the first commercial shipment left to Europe,

namely Switzerland. With vision and entrepreneur skill it transformed into a nationally

recognized commercial commodity and remains the most important export product from

Nepal.

The Nepalese- Tibetan carpets hold a very high degree of hand processing and qualities

ranging from 60-150 knots per square inch. Regularity safe guards are in place to ensure

that only highest quality fleece wool is imported for use in these carpets.

126

The traditional size has been replaced by a wide range of sizes from 0.25Sq.m. to 56m2

in shapes such as round, octagon and customs shapes. The desired designs, styles and

shades are the creation of limited designers & engineers with regular feedback from the

market.

At present, 95 percent of the production of carpet is concerted in the Kathmandu valley

with the remaining 5 percent is dispersal over a number of other districts of the country.

Early carpet

The earliest group of surviving tight carpets was produced under Seljuk rule in the first

half of the 13th century on the Anatolian peninsula. The eighteen extant works are often

referred to as the Konya Carpets. The central field of these big carpets is a repeated

geometrical pattern. The borders are decorated with a large-scale, stylized, angular

calligraphy called Kufic, pseudo-Kufic, or Kufesque.

The evolution of carpeting has been exaggerated by social, economical and fashion

pressures. Developments in man-made fibers, loom widths and machine efficiencies

brought carpets within reach of the mass market. Fashions for seamless square and then

seamless close-cover carpet helped introduce wider looms. Investigation into thermal

and acoustical requirements leads to fixed carpets in public buildings, shops and offices.

original manufacturing solutions from the 1960's. Tiles, printing, warp printing, needle

punched fibers and double faced bonded carpets all increased the aptitude of the carpet

trade to cater for specific areas, price points and the demands of fashion.

127

Traditional process of weaving carpet in Nepal

Synthetic fibre are introduced

Until about 1954, cotton was virtually the only fibre used in tufted products. Wool and

manmade fibers -- polyester, nylon, rayon, and acrylics -- were gradually introduced by

textile men in Dalton. Nylon was first introduced in 1947 and grew steadily to dominate the

market. Polyester was first used in 1965 and was followed soon by polypropylene (olefin).

Most manufacturers will agree that the single most important development in the industry

was the introduction of bulk continuous filament nylon yarns. These yarns provided a deluxe

quality, durable carpet, similar to wool, which was cheaper to produce. Therefore, a durable,

lavishness product was presented to the consumer for less money.

In 1950, 10 percent of all carpet and rug products were tufted, and ninety percent were

woven. However, about 1950, it was as if someone had opened a magic case. Out of that

trunk came man-made fibers, new spinning techniques, new dye equipment, printing

processes, tufting equipment, and backing for different end uses. Today, tufted products are

more than 90 percent of the total, followed by less than 2 percent that are woven, and 6.7

percent for all other method, such as knitted, braided, hooked, or needle punched. By 1951,

the tufting industry was a $133 million per year business made up mainly of bedspreads,

carpet, and rugs, with carpet accounting for $19 million. The industry broke the billion dollar

128

mark in 1963. Through the years, the Dalton area has continued to be the centre of the tufted

carpet industry, and today, the area produces more than 70 percent of the total output of the

world-wide industry of over $9 billion. Dalton is now known as the "Carpet Capital of the

World."

General Carpet Manufacturing Process in Nepal

This section provides a brief overview of the general carpet manufacturing process used in

Nepal along with different waste streams associated with each stages of processing. Figure 2

presents a simplified flow chart of the manufacturing process. At the time of writing this

article, several carpet manufacturing companies were contacted and information on the

effluent parameters was requested. However, it was not possible to obtain such information.

Therefore, different literature sources were used to quantify some of these parameters as

presented below:

Crude wool: Unprocessed wool from different countries (Tibet, New Zealand,

England, Egypt etc.) is imported to Nepal. Such wools come in bales packaged in

paper and plastic wraps of varying sizes. The majority of waste is in the form of solid

packaging materials, which is usually sold to local recycling companies.

Wool sorting and washing: The wool is then hand sorted to remove foreign matters such as

any unwanted debris. This wool is then washed to remove dirt, oil and grease and sun dried

for two to three days in. However, some of the studies (Green, 2003; Sharma et al., 2005) on

the surface and groundwater quality of the Kathmandu Valley report that the carpet

manufacturing industries lack effluent treatment facilities, which result in the pollution of

surface and groundwater resources of the Valley.

Carding: Washed wool is brushed using metal brushes to prepare it for spinning and

weaving. The carding process allows the fibre to flow smoothly at the time of spinning. At

this stage, wool from different origins are blended and mixed at proper ratios to gain the

specific quality of carpet desired. Traditionally, carding used to be performed by hand and it

was very labour intensive. More recently, many of the industries are using automated

machines for carding. Air borne solid woolen particles are produced in this process, which

often cause indoor air pollution.

129

Spinning: Spinning is a process by which carded wool is spun into yarn using a hand

spinning wheel. Machine spinning wheels are not very widely used in Nepal. The quality of

carpet depends on the thickness of yarn. Mostly 3 ply yarn is used in Nepal. The waste stream

of the spinning process contains small solid yarn pieces, which are reused and recycled on

site to make inferior quality carpets so that there is no loss of the raw material.

Dyeing: Two different dyeing methods (pot and machine dyeing) with both vegetable and

chemical coloring substances are used in Nepal. The dyeing substances are both imported or

locally produced depending on the requirement. The machine dyeing process consists of

processing yarns in closed chambers while the pot dyeing process is more traditional and uses

locally made open pots for dyeing. After dyeing, the dyed yarn is dried mostly in sunlight for

one to three days and taken for further processing. The wastewaters containing these

chemicals are directly discharged into the nearby rivers,

Carpet Knotting: Carpet knotting is done by skilled weavers who follow paper printed

graphic designs to make artistic prints. Weaving is done in wooden or metal frames known as

looms. Depending on the size of the carpet, the loom size and the number of workers varies

between looms. Simple tools such as scissors, iron rods, levers, comb beaters etc. are used by

weavers to make individual knots. Fibre cuttings are the main waste products generated in

this process. All fibre cuttings are recycled or reused on site to make inferior quality carpet.

Trimming: Finished carpets that are produced in the looms are not of very good quality.

They require more finishing by the procedure of trimming. In this process, the carpets are

taken off as of the looms and spread on the floors. Then the designs and patterns in the

carpets are bent out using scissors. Fibre cuttings are main waste products generate in this

process. All fibre cuttings are recycled or reuse on site to make inferior quality carpet.

Finishing: This is the last step in the carpet manufacturing process. The trim carpet is largely

washed and dried. Washing is done either with fresh water or chemicals as desired. Some of

the chemicals worn in the washing process are ammonium sulphate, sodium sulphate, acetic

acid, dye, detergents, etc. The washed carpet is then dried in sunlight and packed for final

send off. By time last finishing is done, the carpet industries in the Kathmandu Valley make

approximately 1.6 million cubic meter of untreated wastewater with 355 and 750 tons of

BOD and TSS loadings per annum, respectively (Green, 2003; Sharma et al., 2005).

130

Carpet knotting

Carpet knotting is an art by itself. The workers known as the weavers

are well trained and skilled in their art and have a very high

versatility in knotting. One or more weavers work on a loom

depending on the size of the carpet. The designs are chartered out on

a graph and the weave translate the graphic designs into knots on a carpet. The dyed yarn is

made into balls and scissors, iron rod, levers, comb beaters are used as tools.

Trimming

The finished carpet taken off from the loom and the designs & patterns are curved out by

scissors.

Payment

Export precedes must be received through an letter of credit (L/C) or advance payment.

Benefits of carpet industry in Nepal:

Gives employment to rural youth, especially women and helps reduce mass

poverty in the country (1 sqmt=-96m/hr/12 persons) {Direct employment to 1

Lack and Indirect employment to 3 lacks}.

Carpet Industry helps in earning foreign currency for the country and helps in

reducing trade deficit.

It builds Nepal’s image in international economic committee of Nations and active

member of WTO.

It can be established with the low investment in terms of employment generation.

Carpet industry can be located in any part of the country.

It has very low energy consumption and has a very less impact on environment.

Problem Facing Nepalese Carpet Industry

Rising cost of Production.

Insecurity among entrepreneurs due to political and labour unrest.

Low profit and return in term of Investment.

No Direct or Indirect support from Government to encourage the stakeholders to

retain in the business.

No Labour act in accordance with nature of industry to maintain industrial

harmony.

131

Different unnecessary document and fee regimes such as Tax, CO, GSP etc against

WTO level (Turkey’s case).

Unauthorized bureaucrats and slow government actions and decisions.

Nepal’s Weakness

Ineffective and unpredictable policies in the area of taxation, investment environment

whereas other countries have long term vision and export policies.

Weak Infrastructure rigid Labour Law.

Unfriendly business climate.

Lowest labour productivity.

High cost of transportation to sea port.

Inadequate marketing network and vision.

owing to constraint on Import and raw materials of one quality, no product

development has been achieved by Nepal carpet industry.

strict banking policies and lack of credit insure agencies.

What carpet industry can contribute to Nepal?

Generating numerous job creations in the rural areas.

Can contribute in poverty mitigation by increasing cash flow in rural areas.

Helps indirectly to promote the word Nepal among the people using carpets.

Responsible FactorsAs mentioned previously, Nepal's carpet sector is facing many problems, which have

contributed to the turn down in trade. These factors have been broadly grouped into

environment and management related factors.

Environmental FactorsCostly Water LossesMany carpet industries are established in an accidental way in buildings and structures that

are inappropriate for industrial purposes. This causes loss of valuable water, which adds to

the cost of production. Some of the commonly observed but deserted wastes of water are

listed here (Thornton, 2002)

Leaks through pipes and hoses that go ignored or neglected

Inefficient washing equipment and lack of knowledge of the equipment

132

extremely long washing cycles

Excessive use of water in washing operations when washing is done

physically

Poor housekeeping practices such as broken or missing valves

Cooling waters are left running when machinery is shut down

Use of fresh water at all points of water use without reusing and recycling.

Lack of 3R PrincipleThe revival, reuse and recycling (3R) of process chemicals and water is rarely practiced by

carpet manufacturing industries in Nepal. The use of virgin chemicals at every point of use

adds to the cost of production. Moreover, this increases the quantity of waste water requiring

treatment. This also creates environmental pollution caused by wastewater discharge into

freshwater bodies.

Excessive Use of DyesNepalese carpet manufacturing industries chiefly use synthetic dyes. These dyes are often

practical to the carpet fabric in vats that have no routine process controls. Therefore,

efficiency is gone and unnecessarily large quantities of dyes are used. Such large quantities of

dyes often end up in rivers cause detrimental effects on the environment . Loss of large

quantities of synthetic dyes also adds to production costs.

Lack of KnowledgeThe carpet manufacturing sector in Nepal did not grow due to the presence of organized and

planned trading practices. When Western nations showed interest in the carpets manufactured

in Nepal during the late eighties and early nineties, a lot of people began to put a few looms

in the basement of their homes and started producing carpets on a small scale. These people

became entrepreneurs within a very short time and enjoyed profits that were not imagined

before. Though, they sustained to lack the necessary knowledge of environment, economics,

foreign trade, health and safety. This was the reason why the carpet industry underway to

countenance a lot of problems within 10 to 20 years of enjoying extraordinary growth.

Resource ShortagesMost of the carpet manufacturing industries in Nepal are situated within the perimeter of the

Kathmandu Valley. It is estimated that almost 90% of the Nepalese carpet is manufactured

inside this valley (Hammer, 1998). The population of the Kathmandu Valley has increased to

133

almost two million and it is showing an rising trend. This has put a tremendous pressure on

the available resources that support industry and infrastructure in the valley. An independent

study conducted by the World Bank/Federation of Nepalese Chambers of Commerce and

Industry (WB/FNCCI) in 2000 estimated that the carpet industries in Nepal features severe

problems in terms of availability of water, energy and other related infrastructures

(WB/FNCCI, 2000).

In order to meet energy demand, carpet industries use diesel run electricity generators.

Similarly, water demand is met from underground wells, which are dug within the industry

premise. Use of diesel-powered generators has worsened the air and noise pollution of the

Kathmandu valley. Similarly, pumping of water has caused lowering of groundwater levels in

the valley. One study shows that the groundwater level in the valley has been lowered from 9

m below ground level to as much as 68 m bgl within a few years (Metcalf & Eddy, 2000).

These aquifers are not being replenished by the natural recharging process This has led to the

drying of many natural springs, waterfalls and ponds in the valley, which have caused major

long term damage to the environment. besides, land problem has also started to be obvious in

the Kathmandu valley.

Lack of Proper Wastewater Treatment, Recycling or Reusing FacilitiesMost of the Nepalese carpet industries do not have any wastewater treatment, recycle or use

again facilities (TRN, 2003). There is a widespread practice of directly pumping out the

wastewater into sewers or surface water bodies such as rivers, lakes and streams without even

giving a second thought to the possibility of reusing or recycling. Some of the worst

contamination problems have surfaced in many receiving water bodies due to this. In the past

when there were very few carpet industries, this was of little concern because the adverse

effect was not quite visible. However, with the increasing number of industries and the

cumulative effect of the pollutants in the ecosystem, it has generated many environmental

problems (Adhikary, 2002). For example, in some areas of Kathmandu Valley, the carpet

industry has been found responsible for depletion of all forms of aquatic life (NPEDC, 1991).

News on such weakening environmental quality in the international media has prompted the

decreasing trend of carpet exports

Management Related FactorsLack of Organizational Infrastructurethough carpet manufacturing industries were established in the sixties, for a long time there

was not any organization that provided a common platform to organize policies and activities

134

between the government and the industry. It was only in July 1990 that a fully representative

association came into being after the formation of the Central Carpet Industries Association

(CCIA, 2003). By this time, environmental and management problems had already started to

surface and CCIA was not experienced enough to handle such problems.

Lack of Regulatory Body

In Nepal, Ministry of Population and Environment (MOPE) acts as a governmental

regulatory body to oversee environment related matters such as environmental conservation,

pollution control, environmental standards, enforcement and monitoring, environmental

impact assessment etc. MOPE was established fairly recently in 1995. By this time, the carpet

sector had already operated for more than 20 years without any governmental regulatory

authority that imposes environmental standards. It should be noted that most of the

environment related acts and regulations were promulgated only after MOPE was established.

For example, Environmental Protection Act (EPA) and Environmental Protection Regulation

(EPR) were formulated in 1996 and 1997, respectively. This is one of the reasons why most

of the pollution problems caused by the Nepalese carpet sector remained unchecked for many

years.

Negative PublicityIn 1994/1995, the Nepalese carpet industry suffered a huge setback as the export plummeted

by almost 34% (refer to Figure 1). One of the reasons for this was attributed to the negative

publicity that Nepalese carpets were facing due to anti child labour issues in overseas

countries. Western nations were mostly concerned about the child labour situation in

Nepalese carpet sector and started boycotting Nepalese carpet (USDOL, 2003).

Excessive Supply and Unplanned GrowthSince Nepalese carpet sector did not have any organized body until recently to coordinate the

marketing issues, there was no control on the industrial practice. Carpet industries sprawled

in every possible empty space in the Kathmandu valley. Moreover, there was a lack of

institutional involvement in conducting economic studies on the global market trends to make

a planned production of carpet. As a result, there was an excessive supply of carpet in the

market, which ultimately let to price undercutting in the industry.

Foreign DependenceNepal is heavily dependent on foreign countries in the carpet sector. Almost everything that

is used in the industry is imported. Crude wool, dye, chemicals and machinery are all

135

imported either from neighboring countries (India and Tibet/China) or from overseas. Nepal's

northern cold climate is ideally suited for sheep farming and wool production. However,

concerned authorities have not given thought on this matter. The production of home grown

wool would have reduced dependency on the foreign market and it would have also helped in

reducing the expenditure of foreign currency.

Tough CompetitionIn the past, carpets were produced by very few countries in the world and there was not much

competition. However, in the recent years, many new countries have started to produce

carpets and export their products in a world-wide scale. This has put a tremendous pressure

on Nepalese carpet sector due to increasing competition.

Need for Pollution Prevention Strategies In general, Nepalese carpet sector is facing the following problems:

Short term oriented goals without considering long term environmental

impacts

Lack of pollution prevention strategies

Lack of life cycle assessment of products manufactured

Poor housekeeping practices

Establishment of open-end systems rather than closed-loop systems and

Lack of investment on energy saving and improved technologies.

One of the ways by which the above problems can be tackled is by implementing pollution

prevention related strategies. Although "control' strategies can also be implemented for both

short and long term solutions, they are not suitable in Nepal's context (Gautam and Herat,

2000) because such practices are not cost effective. It is also true that the carpet industry

decision makers (CIDMs) lack the basic understanding of pollution prevention strategies and

principles, which made pollution prevention strategies unpopular. CIDMs do not know that

pollution prevention does not necessarily mean a huge investment in technologies and

training in complex process changes. It means recognition of the environmental and financial

implications of not doing something to solve pollution problems, changing corporate attitudes

and workers participation, among other things. Therefore, a radical approach is required in

order to deal with these problems. Implementation of pollution prevention methods in similar

136

other sectors has already shown many positive results (Dupont et al., 2000). Such pollution

prevention methods may also bring positive changes in Nepal’s carpet industry sector.

QUALITY OF NEPALESE TIBETAN CARPETS

There are quite a few distinctive qualities of Nepalese - Tibetan Carpets, which are generally

identified by the density of knots. The major productions are in 60 knots quality but demand

for 80 knots, 100 knots, & above 100 knots quality are rising. A universal density of 70,000

knots/ m2 and 3.80 kgs weight in 60 knots quality carpets was the standard up to early

seventies. But the introduction of strong wash and market demand in Europe, led the

manufacturers to change their product to beet thick pile product.

The present day quality of Nepalese- Tibetan carpet of knot of 60 knots would have a density

of 56,000/m2+and the weight ranges from 4.5 to 5.0 kgs., where as in 80 knots would have

80,000 + with a weights is 3.5 to 4.25 kgs and in 100 knots the density would be 1,25,000+&

the weight varies from 2.5 to 3.5 kgs.

Nepal: Carpet industry under scrutiny for flouting laws

Kathmandu, Jan 13 (IPS/Suman Pradhan) -- The carpet industry in Nepal, one of the

country's top foreign currency earners, has begin the year in a debate that it can least afford.

Police raid last week in the capital city Kathmandu on wool- spinning factories that supply

wool to carpet weavers have led to the upturn of child workers, some as young as 13 years

old.

Nepal's newspapers have reported in minute detail how police rescue more than two dozen,

half-starved children from factories, often no more than small, dark and dingy rooms.

The children lived among the machines. "We weren't allowed out in the open for two months,

“complained Ram Bahadur Rai, 15. "We were waged poorly," he added.

Factory owners are accused of violate Nepal's laws which ban child labour in a country where

per capita income is just 200 dollars a year and children work to extra scanty family incomes.

137

Under the Children's Act of 1992 it is a crime to hire workers below the age of 17. The Act

protects the rights of children to basic health care and education which were deprived of to

them in the factories.

In 1993-94, the hand-woven carpet industry in Nepal received a crushing blow on account of

several factors widespread reports of extensive use of child labour in the carpet industry; sub-

standard carpets and an economic downturn in Europe the major export market.

Out of more than 3,000 carpet manufacturers all over the Himalayan kingdom in late 1993,

two-thirds have gone out of business, trade figures show.

Police have handed some of the rescued children for rehabilitation to Child Workers in Nepal

(CWIN), a non-governmental organization (NGO).

A few have already been sent back to their parents, and the search for the families of the

others is continuing, CWIN officials say.

The NGO says the police raids only revealed what it has known for a long time - that the

practice was general in Nepal, despite efforts to control child labour. CWIN says its own

studies show that 50 % of workers in carpet factories are children.

But the figure is doubtful. Other surveys listed in a report released last year by the

Kathmandu office of the International Labour Organization (ILO) put child labour estimates

at up to 8 % of the total labour force.

in the meantime, an official of the Central Carpet Industries Association (CCIA), a trade

group, thought in their defense, "We can't deny that child labour exists in our industry, but it

is nowhere near the levels of 1993-94. Exporters are aware of the stigma attached to the

practice."

Carpet weaving factories and auxiliary industries directly employ about 100,000 people,

according to CCIA secretary C.L. Sharma. That is a far weep from 1994 when the industry

employed more than 300,000, he said.

Along with tourism and garment exports, the industry is one of Nepal's chief export

businesses, netting over $179 million in 1994, the peak year. But then exports went into a

slide, recovering last year to $130 million. CCIA officials said it was an improvement.

138

Several organizations to weed out child labour have sprung up in Kathmandu over the last

two years, including the government's `Child Labour Free Certification Coordination

Committee' set up in 1994.

In 1995, ILO also began funding programmers under its International Programmed for the

Elimination of Child Labour.

Such activities have contributed hugely to raising awareness among factory owners, says

Nepal Rugmark Foundation, an affiliate of Rugmark International which has offices in over

half a dozen carpet manufacturing countries including India and Pakistan.

Now more than 280 carpet manufacturers are registered with Rugmark for the popular

Rugmark seal which indicates children are not employed. The seal is granted after rigorous

check of factories and their ancillary suppliers, Naryan Bhattarai, Rugmark's inspection

promotion programme supervisor, supposed.

A part of the export proceeds are ploughed back to Rugmark by the exporters and foreign

buyers to run schools and treatment centres. Rugmark runs four of the many centres in

Kathmandu run by different organizations.

"Rugmark strongly feels that children should not be allowed to work in carpet factories," says

Bhattarai. "That is why we are running centres that recover those children displaced by the

new awareness about child labour that is slowly building up in Nepal."

India can provide raw materials to Nepal specially cotton wool and silk

Currently there are standing orders from many international carpet buyers to many Nepal

carpet producers for full containers of nettle carpets all totaling 50 tons, but the threads are

not available on the market. If the threads were available the orders would triple in a month.

139

India has good amount of export of thread the export according to the year

2009 10 3022 .7

2010 11 2855.3

2011 12 4132.5 rs in million

Source NRB based on Nepal Customs pragyapan ( www.nicci.org)

For manufacturing good quality of carpets good quality of raw cotton is also needed so India

also exports raw cotton which was according to the year

India’s export of carpets and raw materials to other countries.

Introduction

The use of child labour in the hand-knotted carpet industry has been widely reported and

documented in recent years. global organizations, human rights groups, and NGOs have

described the dangerous conditions under which children make carpets, often in repression

and without pay.

This chapter discusses a number of private-sector initiative to reduce child labour in the hand-

knotted carpet industry. Section B provides a brief profile of the industry, followed by a

discussion, in Section C, of child labour in the hand-knotted carpet industries of selected

producing countries. Section D discusses consumer labeling programs, including their claims,

structure and functioning procedures. Finally, Section E reports responses of U. S. importers

and retailers of hand- knotted carpets to the child labour issue, based on a recent voluntary

survey conducted by the Department of Labour.

B. Industry Profile

Nearly all hand-knotted carpets are made for export, with less than ten per- cent sold for use

in their country of origin. The main carpet exporting countries are Iran, India, China,

Pakistan, Turkey, Nepal, and Egypt. The United States and Germany are the world's

foremost importers of hand- knotted carpets. The United States, which produces no hand-

knotted carpets of its own, imported $329 million worth of hand- knotted carpets in 1996.

140

India is the largest single basis of U. S. imports of hand- knotted carpets, followed by China;

together they accounted for about 70 percent of total U. S. imports of hand- knotted carpets in

1996. Pakistan, Turkey, and Nepal accounted for another 25 percent of imports, while the

residual 5 percent came from Romania, Egypt, and other countries.

India - 45 % China 25% Pakistan 16% Turkey 6.5 Nepal 2.9 Romania.9 Egypt .9

Germany. 4

Carpet industry in India

Carpet Industry is one of the oldest industries in India. Carpet Weaving was brought to India

by Moguls. Some of the majestic carpets were woven during this Mogul era.

Based on individualistic skill of the weaver, there is an aesthetic touch of the coloring and

beauty in the carpets.

Over the period, various clusters have emerged in the northern part of India. Major centers

have been Bhadohi, Agra, Jaipur & Kashmir, Panipat. During the last few decades, hand-

tufted carpets have emerged as one of the major categories. Indian carpet industry is

primarily export oriented industry. There are 1215 carpet manufacturing units recorded and

of that 190 are in the organized sector and the rest are in small scale industry sector

Carpet is a textile floor covering that is distinguished from the more general term "rug" by

being fixed to the floor surface and extending wall to wall. The earliest peoples covered the

floors of their dwellings with animal skins, grass, or, later, woven reed mats.

When people learned how to spin cotton and wool, woven mats of these materials largely

replaced earlier coverings. Around 3000 B.C. Egyptians sewed brightly colored pieces of

woolen cloth onto linen and placed it on their floors.

From these early beginnings, carpet weaving rose to its highest art form in Turkey, Iran,

India, and China. Using cotton, linen, or hemp as the foundation, and wool or silk as the

luxurious pile, weavers would make a knot out of the pile thread, then form a row of knots

that was tightly beaten down.

The process was time-consuming: some of the finest handmade carpets have as many as

2,400 knots per square inch (372 knots per sq cm). The brilliant colors of these ancient

141

carpets came from natural dyes such as madder, indigo, genista, wood, and ocher. Some

weavers added alum to these dyes to fix the color, and a few wove gold and precious jewels

into their carpets.

Raw Materials used in carpet industry in India

Carpet consists of dyed pile yarns; a primary backing in which the yarns are sewn; a

secondary backing that adds strength to the carpet; adhesive that binds the primary and

secondary backings; and, in most cases, a cushion laid underneath the carpet to give it a

softer, more luxurious feel.

Ninety-seven percent of pile yarns today are made up of synthetic polymers; the rest of the

yarns are wool and comprise the more expensive, woven carpet. Synthetics are plastics such

as nylon (which is in 66% of all carpet), acrylics (15%), polyester (less than 15%), and

polypropylene (less than 5%). These pile yarns are dyed using a variety of organic chemical

compounds, or occasionally, organ metallic complexes.

Both the primary and secondary backing are largely made of woven or nonwoven

polypropylene, though some secondary backing may still be made of jute, a natural fiber that,

when woven, looks like burlap. The adhesive used to bind them.

The most common padding is rebound (bonded urethane), though various forms of synthetic

latex, polyurethane, or vinyl might be used instead. Rebound is recycled scrap urethane that

is chopped into uniformly sized pieces and pressed into layers.

Although rare, some carpet cushioning is made up of horse hair or jute. A plastic top sheet is

usually added to the top to insure a smooth surface against the carpet.

142

Post treatment of carpets

When a carpet is woven there are four steps

before it put up for sell

polishing

Washing

Drying

Control and repairing

Polishing

The pile is cut to the intended length. In order to give the carpet an even nice surface & to get

a clear sharp pattern, polishing of the carpet is needed. The process is done with a

tool/machine , with a built‐in sucking function.

Washing

The carpet is washed thoroughly in order to remove dust from the polishing & to remove

loose colors & also for the colors to be fixed.

143

Drying

The carpet needs to be dried properly after the washing so that the colors stabilize & to keep

the shape of the carpet. Control and repairing After the polishing, washing & drying the

carpet is inspected very carefully to see that no holes or other damage have occurred during

the treatments

Carpet Export Promotion Council

Set up by the Government of India in 1982 to promote the exports of hand‐knotted carpets

and floor coverings.

CEPC advises the government on carpet export promotional measures and helps the exporters

by bringing their problems to the attention of the government.

CEPC is headquartered in New Delhi with its representative offices in the major carpet

producing centers.

CEPC informs the exporters through its regularly updated

website about any change in Government policy with respect to duty drawback schemes and

the like for the benefit of the exporter.

It identifies potential markets, conducts promotional fares, buyer‐seller meet, exhibitions for

display of Indian carpets in and outside India.

Manufacturing Process

Since most carpet in the India and other countries is tufted; earlier methods of weaving

carpet.

Preparing the yarn

1 Synthetic yarns arrive at the carpet manufacturer either in staple fiber form or bulk

144

continuous filament form. The staple fibers, which average 7 inches (18 cm) long, are loose,

individual strands that arrive in bales. Several bales are blended together into one batch in a

hopper. Then, after lubrication, they are spun into long, loose ropes called slivers by a

carding machine. The slivers are then pulled, straightened, and spun into single yarn that is

wound onto spools. Both the single-ply staple fibers (now spun into filament) and the bulk

continuous filament must now be twisted together to form thicker two-ply yarn suitable for

tufting. The yarns are then steamed to bulk them, and then heated to 270-280°F (132-138°C).

This heat setting causes the yarn to maintain its shape by fixing its twist. After cooling, these

yarns are wound onto tubes and transported to the tufting machines.

Dyeing the yarn

2 Most carpets are dyed after tufting, yet sometimes the yarns are dyed first. The methods

include putting 500-1,000 pounds (227-455 kg) of fiber into pressurized vats

145

through which treated dyes are circulated, or passing the fibre continuously through the bath,

or passing skeins of yarn through the vat of dye. The yarn can also be put on forms, and the

heated dyes can then be forced under pressure from inside the forms to color the yarn.

Another method passes the yarn through printing rollers, while yet another involves knitting

the yarn onto a form that is then printed with dyes before the yarn is unraveled. All yarn that

has been dyed is then steamed, washed, and dried.

Tufting the carpet

3 The yarn is put on a creel (a bar with skewers) behind the tufting machine, then fed into a

nylon tube that leads to the tufting needle. The needle pierces the primary backing and pushes

the yarn down into a loop. A looper, or flat hook, seizes and releases the loop of yarn while

the needle pulls back up; the backing is shifted forward and the needle once more pierces the

backing further on. To make cut pile, a looper facing the opposite direction is fitted with a

146

knife that acts like a pair of scissors, snipping the loop. This process is carried out by several

hundred needles (up to 1,200 across the 12 foot [3.7 ml width), and several hundred rows of

stitches are carried out per minute. One tufting machine can thus produce several hundred

square yards of carpet a day.

Dyeing the tufted carpet

4 For solid color carpeting, carpet of several standard roll lengths is sewn together to make a

continuous roll, which is then fed into a vat. The vat is filled with water, which is first heated

before dyes and chemicals are mixed in. The mixture is then slowly brought to a boil and

cooked for four hours. Another method of making solid color carpet is to sew several rows

together to make one continuous roll, which is then fed under rods that bleed the color into

the pile. After dyeing, the carpet is then steamed to fix the color, excess color is washed off,

and the carpet is dried and put on a roll.

5 To make printed carpet of various designs, white carpet passes under screens in which holes

in the desired pattern have been cut. The desired color is squeegees through the holes in the

screen, and the carpet is advanced 36 inches (91 cm) to a different screen that applies a new

color in a different design through the screen. Up to eight colors can be applied with this

method.

6 Another method of dyeing printed carpet is to pass it under embossed cylinders that have

raised portions in a design, which press color into the carpet. Each cylinder provides a

different design for a different color. After dyeing, the printed carpet is steamed, excess dyes

are washed off, and the carpet is then dried and put onto rolls to go to the finishing

department.

Finishing the carpet

7 The ends of the dyed carpet are first sewn together to form a continuous belt. This belt is

then rolled under a dispenser that spreads a coating of latex onto the bottom of the carpet. At

the same time, a strong secondary backing is also coated with latex. Both of these are then

rolled onto a marriage roller, which forms them into a sandwich and seals them together.

8 The completed carpet is then steamed, brushed, vacuumed, and run through a machine that

clips off any tufts that rise above its uniform surface. The carpet is then rolled into 120 foot

147

(37 m) lengths that are then packaged in strong plastic and shipped to either the carpet

manufacturer's inventory warehouse or to a retail carpet store.

Quality Control

Every piece of carpet that is tufted is inspected to see if any tufts are missing. One person

with a single needle tufting gun shoots pile yarn wherever holes are found. Each piece of

carpet is then inspected. The manufacturer checks that the piece is of the proper dimensions

and that the tuft height is of the desired length. The static shock potential is also tested.

Most states require a flammability test. A prepared 9 × 9 inch (23 × 23 cm) specimen is

placed on a steel plate that has a hole 8 inches (20 cm) in diameter in its middle. A

methylamine tablet is ignited in the centre. If the charred portion in seven out of eight trials

does not reach to the circumference of the hole, the carpet passes. Another important test

determines the carpet's resistance to wear. A specimen of carpet is placed in a drum and

beaten with a steel ball that has rubber studs on it for 20,000 to 50,000 revolutions. The

carpet should look fairly new after this test. To test how the carpet's color stands up to

sunlight, a standard light source that simulates sunlight is directed at a specimen, who is then

rated according to the number of units of exposure required to produce visible loss of color.

Backing fabrics and carpet padding are tested for strength by being pulled in a vise until they

break. The primary backing's strength is checked both before and after tufting. The

delaminating strength of the secondary backing is also tested by determining at what force the

secondary backing can be pulled away from the primary backing.

Part of the quality control process is up to the customer, who must select carpet of the proper

strength and durability for the amount of traffic expected in the room, vacuum regularly, and

have the carpet professionally deep cleaned at least once a year

148

Major raw materials that we are used in Indian carpet industry

Wool

Wool is certainly the most used material to produce knotted handiworks. Being able to

choose and work with it is very important as the quality of yarn strongly affects the softness

and the resistance of the carpet and it also determines the brightness of the colors and

patterns.

It is always better to use a fleece that is not too curly, otherwise it is frequently necessary to

treat the fleece with artificial substances that can alter their resistance.

Furthermore, it is important to carry out the shearing at a specific period during the year

ideally spring or the end of summer

.Once sheared, the wool is submitted to a washing process, necessary to remove all impurities

and to degrease it. The most expert craftsmen know this treatment does not have to be too

drastic as the correct percentage of grease makes the yarns particularly soft.

Once washed, the wool is dried with care, possibly through exposure to the sun, and then it is

teased and spun. In modern processes, it is very common that this operation is done

mechanically. However, spinning by hand is always the best as this allows the elimination of

any irregularity of the fibre, making it very compact and suitable for each kind of weaving.

Silk

Silk, an animal fibre made from the cocoons of silkworms, is an extremely costly and

luxurious material for textile and rug production. Silk cultivation began in ancient China

where it was a jealously guarded secret. Eventually its use spread to Persia and then to

Byzantium and Europe. The expense notwithstanding, silk pile rugs, even those with silk

foundations as well, are not uncommon, although they tend to be high quality pieces in the

tradition of court art.

Extremely luxurious nomadic weavings will also have some of the pile made in silk. The

attraction of silk resides in the fineness of its fibers which are remarkably soft, as well as in

its luminous, reflective quality. Because of this the effect of color on silk is far more intense

and brilliant than the effect of the same dye on even the finest wool. Silk, however, is much

more delicate and less durable than wool. Consequently, many less silk rugs are well

preserved. This rarity, as well as the basic cost, places antique silk pieces among the most

expensive rugs.

149

Hemp

Hemp fibers are obtained by subjecting the stalks to a series of operations—including retting,

drying, and crushing—and a shaking process that completes separation from the woody

portion, releasing the long, fairly straight fibre, or line. The fibre strands, usually over 5.8 feet

(1.8 meters) long, are made of individual cylindrical cells with an irregular surface. The fibre,

longer and less flexible than flax, is usually yellowish, greenish, or a dark brown or gray and,

because it is not easily bleached to sufficiently light shades, is rarely dyed. It is strong and

durable and is used for cordage—e.g., twine, yarn, rope, cable, and string—and for artificial

sponges and such coarse fabrics as sacking (burlap) and canvas. In Italy some hemp receives

special processing, producing whitish color and attractive luster, and is used to make fabric

similar to linen. Other plant fibers used for cordage have been incorrectly called hemp, but

only the hemp plant yields true hemp.

Linen(Flax)

Linen is one of the oldest textile fibers and it is valued for its strength, luster, durability, and

moisture absorbency. It is resistant to attack by microorganisms, and its smooth surface

repels soil. It is stronger than cotton, dries more quickly, and is more slowly affected by

exposure to sunlight. It can be bleached to a pure white but dyeing is somewhat difficult

because the fibers are not readily penetrated. Fine grades of linen are made into woven

fabrics and laces for apparel and household furnishings. Lower grades are used for products

requiring strength and ability to withstand moisture—such as canvas, twine, fire hose,

bagging, and, of course, rugs and carpets.

Banana silk (abaca)

The fibre-bearing outer layer is usually removed from the petiole by an operation in which

strips, or taxies, are freed at one end and pulled off. In the cleaning operation that follows,

pulpy material is scraped away by hand or machine, freeing the fibre strands, which are dried

in the sun The strands average 1 to 3 m in length, depending on petiole size and the

processing method used. The lustrous fibre ranges in color from white through brown, red,

purple, or black, depending on plant variety and stalk position; the strongest fibers come from

the outer sheets.

Abaca fibre is valued for its exceptional strength, flexibility and resistance; therefore it is

used in carpets, table mats, and paper. The plant’s inner fibers can be used without spinning

to manufacture lightweight, strong fabrics, mainly used locally for garments, hats, and shoes.

150

Production Colors

Despite the wide use of synthetic colors, the most prestigious manufactures still make use of

natural colors, extracted and prepared in accordance with very ancient methods. However, at

the end of nineteenth century, the use of synthetic colors made it possible to widen the

chromatic range. Today the best manufacturers use both techniques.

Working tools

The loom is the most used tool allowing the creation of pieces of various dimensions.

It has a solid and steady structure, formed by two lateral uprights and by two closing beams.

The upper heddle separates the warp yarns on proper seats fixed to the uprights while the

lower one is passed through the warps.

There are also other auxiliary tools, mainly necessary during the knotting phase, like, for

example, the characteristic blades having a hooked point. They are useful to cut the knots.

A comb is used to fix and close the wefts of the knots; this working phase is carried out with

absolute accuracy. When the work is finished, it is necessary to carry out careful shaving that

is still done by skilled shearers, expert in handling scissors and sharp blades.

The carpet structure

In the carpet structure, the warp constitutes the bearing part of the framework, a kind of

skeleton that must be produced with absolute accuracy to avoid defects to the final product,

such as humps and warping. The best materials to use are undoubtedly silk and cotton, which

are highly resistant and give strong textile strength.

To create the warp, the yarns are tightened on the beam equidistantly; each one creates a

chain that, once finished, appears in the single yarns on the fringe. A precious rug always has

a high number of warp chains.

The framework the weft thread passes through the warp and this structure is also useful to tie

up knots. Once the work is finished, it must not be noticed, therefore, it is preferable to hide it

under a higher fleece. The weft thread can be made in wool or in cotton; also silk is an

excellent material but, usually, it is used for valuable pieces due to the high costs.

The fringes are the visible part of the warp chains and obviously are exposed to wear. Their

151

yarns can be knotted in different ways depending on the producing country; therefore,

sometimes, they are an excellent indication to discover the place of origin.

The fleece is composed of the cut nooses of knots and it is obtained during the shearing

phase. This is extremely important to show the patterns precisely. An uneven or too long

shearing could, in fact, compromise the clarity of the decorative structure.

The asymmetrical knot is used in Iran, India, Turkey, Egypt and China. To form this knot,

yarn is wrapped around one warp strand and then passed under the neighboring warp strand

and brought back to the surface. With this type of knot a finer weave can be created.

Employment generation

The carpet industry provides job opportunities to the rural artisans and other poor sections of

society provides direct employment to more than 2.5 million artisans as of now with a total of

more than 2000 million of rupees export business. Gives indirect employment to several

thousands of people who work in raw material and other sectors connected with carpet

industry such as the transport sector which forms an important backbone for sustenance of

this sector.

Global market for carpets

The carpets manufactured in India are mainly Exported India exports carpets worth over

Rs.2600 crores.

The domestic market size is about Rs.200 crores Indian market will expand rapidly based on

current retail boom in India. Traditional designs are popular in southern European market

while modern design in northern European countries.

There is no such differentiation in US market Indian carpet industry, in general, is facing

tough competition from Iran, China, Nepal and Pakistan

152

Strengths of Indian Carpet Industry

Costs: Comparatively low labor cost in India.

Innovations: More innovative as compared to other countries like China

Flexibility: All kinds of carpets can be Manufactured in India.

Weaknesses

Unorganized Sector: Cost of production increases.

Marketing Channels: Difficult to access the customers directly by manufactures.

Infrastructure: Higher time of production and costs, no showrooms.

Professional Approach: Most players do not respect delivery time and quality issues.

Shortage of skilled carpet weavers: labor cost are surging, new generations not keen to

learn

Shortage of carpet grade wool: large quantity of wool imported, prices increased.

Intellectual Property Rights: Many players of industry copy designs. Use of corrosive and

hazardous chemicals in carpet washing

Lack of modern facilities particularly dyeing, washing, processing, designing etc.

Opportunities

Home furnishing market: moving towards carpet industry Companies like IKEA, Wal‐Mart

can offer new and large markets.

• Evolution of modern design attracted youth Market Designing skills of India are

acknowledged at global level in garments.

Indian Scenario

India is the seventh largest producer of wool and contributes 1.8% to total world production.

In sheep population, India ranks among the leading five countries in the world. However, at

0.8 kg/sheep/year, wool productivity in India is much lower than the world average of 2.4

kg/sheep/year.

153

Carpet industry

On account of the insufficient quality of wool and high wool prices, the domestic carpet

industry faces stiff price competition from other exporting countries, particularly from

Pakistan and Nepal, in the case of hand-made woolen carpets. Also, the industry is currently

using old/outdated technology.

For making good quality of carpets pure sheep wool is required India is amongst largest

sheep wool producer as under

India exports all the three varieties of carpets – hand-made, machine-made and silk carpets.

Hand-made carpets (knotted) account for a lion’s share of 75% of the total carpet exports

from India. The major export items include carpets made from wool, cotton, silk, jute and

coir, cotton, durries, mats and matting’s, rugs and drug gets. US are the largest export market

for carpet made in India, accounting for more than half of India’s export earnings.

To improve the quality & quantity of wool

Carpet grade wool

The domestic industry has potential in carpet grade wool, and therefore efforts should be

concentrated on increasing the production of carpet grade wool to reduce our dependence on

imported wool. India has some of the best carpet grade wool producing sheep breeds such as

Mara, Chokla, Nalli and Bikaneri. Thus, focus should be laid on these selective sheep breeds.

This should be done through increased thrust on cross-breeding programmes with an aim to

bring down the micron structure of the carpet grade wool

Selective breeding farms should be encouraged to be set up, preferably in the private sector or

as joint ventures towards improving the production and quality of carpet grade wool.

The cross-breeding programmes should be implemented in conjunction with the respective

State Animal Husbandry Departments to ensure better synergy and involvement, in order to

achieve the laid objectives.

154

World sheep population by country (2007)

Country Population (Mn nos.) Share (%)

China 172.0 15.7

Australia 85.7 7.8

CIS 72.4 6.6

India 64.3 5.9

Iran 52.2 4.8

Others 650.5 59.3

Total 1097.1

Source ministry of textiles govt. of India

(international wool trade organization)

World wool production in (000 tones)

Countries 1990 1995 2000 2005 2007 2008P Change (%)

Australia 1,100.3 731.0 666.0 520.0 477.0 437.6 -8.3

China 239.5 277.4 292.5 393.2 363.5 405.0 11.4

New

Zealand

309.3 288.5 257.4 213.1 217.6 205.1 -5.8

CIS 473.7 237.4 129.0 153.1 165.6 172.1 3.9

Iran 44.6 50.9 53.9 53.9 75.0 75.0 0.0

India 42.7 41.4 47.6 44.9 45.9 46.4 1.1

Others 1,189.0 969.7 836.0 765.5 827.0 765.4 -7.4

Total 3,399.1 2,596.3 2,282.4 2,143.6 2,171.6 2,106.6 -3.0

Source: IWTO ministry of textiles govt. of India

Countries 1990 1995 2000 2005 2007 2008P

Australia 32 28 29 24 22 21

China 7 11 13 18 17 19

New 9 11 11 10 10 10

155

Zealand

CIS 14 9 6 7 8 8

Argentina 4 3 3 4 4 3

United

Kingdom

2 3 2 2 3 3

South

Africa

3 3 2 2 2 2

India 1.3 1.6 2.1 2.1 2.1 2.2

Others 28 30 32 31 32 32

World wool production by country: Clean equivalent ('000 tonnes)

Countries 1990 1995 2000 2005 2007 2008P Change

(%)

Australia 723.7 472.5 438.3 332.3 309.0 283.5 -8.3

China 103.2 121.6 127.9 175.1 175.1 179.5 2.5

New

Zealand

230.7 213.4 193.3 158.5 164.1 154.7 -5.8

CIS 240.2 126.4 71.6 84.7 92.3 96.0 4.0

Argentina 94.0 56.6 38.9 49.6 47.8 38.5 -19.5

India 34.2 33.2 38.1 35.9 36.7 37.1 1.1

Others 581.1 496.6 435.1 382.2 396.1 401.8 1.4

Total 2,007.0 1,520.2 1,343.2 1,218.2 1,221.1 1,191.1 -2.5

Source: IWTO (international wool trade organization)

Share of countries in world wool production: Clean equivalent (%)

Countries 1990 1995 2000 2005 2007 2008P

Argentina 4.7 3.7 2.9 4.1 3.9 3.2

India 1.7 2.2 2.8 2.9 3.0 3.1

Others 29.0 32.7 32.4 31.4 32.4 33.7

Source: IWTO (international wool trade organization)

156

India is the world’s leading exporter of wool knotted carpets as also wool tufted carpets, with

a share of 18% and 19%, respectively, in total world exports, during 2008. During 2008, it

recorded lower exports of both these categories of wool products. In fact, all the leading five

countries reported fall in exports during 2008.

Exports of wool knotted carpets (Tonnes)

Countries 2001 2003 2005 2007 2008P Change

(%)

India 3,866 5,663 62,396 8,976 7,593 -15.4

Iran 21,926 20,672 16,231 10,803 7,371 -31.8

Afghanistan N.A. N.A. N.A. N.A. 6,185 n.a.

Pakistan N.A. 7,716 12,544 7,086 4,717 -33.4

Nepal N.A. 3,243 6,868 5,278 4,390 -16.8

Others 17,735 13,689 15,493 13,557 12,441 -8.2

Total 43,527 50,983 113,532 45,700 42,697 -6.6

N.A.: Not available; n.a.: Not applicable; Source: IWTO

In the case of wool woven carpets, China, India and UK are the world’s leading exporters,

with shares of around 13% each in 2008. During 2008, while China managed to record an

impressive 33.4%

373 increase in exports of its wool woven carpets, exports from India and UK declined by

29.2% and 3.4%, respectively.

157

Exports of wool woven carpets (Tonnes)

Countries 2001 2003 2005 2007 2008P Change

(%)

China 876 906 2,585 4,119 5,495 33.4

India 6,667 7,719 9,580 7,715 5,465 -29.2

UK 5,883 5,407 5,308 5,555 5,365 -3.4

Belgium 4,979 7,871 4,149 5,323 4,223 -20.7

UAE N.A. N.A. 1,092 2,797 3,690 31.9

Others 8,525 8,626 16,417 19,326 18,480 -4.4

Total 26,930 30,529 39,131 44,835 42,718 -4.7

Source: IWTO (international wool trade organization)

Exports of wool tufted carpets (Tonnes)

Countries 2001 2003 2005 2007 2008P Change

(%)

India 2,685 3,154 5,529 13,453 13,077 -2.8

Belgium 9,569 12,242 11,833 12,870 8,954 -30.4

New

Zealand

3,033 3,569 11,063 9,185 7,709 -16.1

China 8,166 8,343 7,123 8,155 7,109 -12.8

Netherlands 1,362 3 ,041 4,236 5,766 4,350 -24.6

Others 16,357 23,476 24,706 27,435 26,941 -1.8

Total 41,172 50,784 64,490 76,864 68,140 -11.3

Source: IWTO (international wool trade organization)

158

AUTO MOBILE INDUSTRY

Automobile Industry in Nepal

Nepal has one utility vehicle assembly unit and two motorcycle assembly units. The country

is dependent on imports and India is the major supplier with imports from it accounting for

nearly 68% of the total demand.17 It has good supply of tyres (produced by Gorkhali Tyre,

owned by the Nepalese Government). Tata Motors has launched its popular mini-truck, Tata

Ace in Nepal. Tata Motors has tied-up with Nepal’s Sipradi Trading to distribute and market

the trucks in the country. Nepal’s auto-industry is estimated at NRS 5 billion a year.18 A

Nepali manufacturer also has emerged offering a made-in-Nepal brand of a utility vehicle.

Some of the auto players (like Hyundai and Yamaha) are present through their supply chain

organized locally. Given the significance of revenue collection from motor vehicle imports,

the tariffs on motor vehicles and components have not been revised downwards to the same

extent as many other Nepalese imports.

Major Players

159

Vehicles Registered in Last fiscal year

Category 2009-10 2010-11 Change

percent

Bus 1,888 1,610 -14.72

Minibus 780 1,370 75.64

Crane/dozer/excavator/truck/tripper 4,524 3,201 -29.24

Car/jeep/van 12,268 8,510 -30.63

Pickup Van 1,975 3,087 56.3

Microbus 145 115 -20.68

Tempo 9 2 -77.77

Bikes 168,707 138,907 -17.66

Tractor/power-trailer 11,460 7,937 -30.74

Others 31 133 329

-20,0000

20,00040,00060,00080,000

100,000120,000140,000160,000180,000

2009-10

20010-11

Change percent

160

Vehicle Registration in the last ten fiscal years

FY Vehicles

Registered

Change

2010-11 163,640 -18.90 percent

2009-10 201,787 96.73 percent

2008-09 102,570 21.04 percent

2007-08 84,740 -4.50 percent

2006-07 88,735 61.40 percent

2005-06 54,975 35.03 percent

2004-05 40,711 2.54 percent

2003-04 39,699 5.38 percent

2002-03 37,670 -20.12 percent

2001-02 47,160 15 percent

Opportunity To Doing Automobile Business In Nepal

We are finding opportunity to doing automobile business in Nepal. Doing business of the

automobile product like four wheeler and specially minibus and pick up van.

Vehicles Registered in Last fiscal year

Category 2009-10 2010-11 Change

percent

Bus 1,888 1,610 -14.72

Minibus 780 1,370 75.64

Crane/dozer/excavator/truck/tripper 4,524 3,201 -29.24

Car/jeep/van 12,268 8,510 -30.63

Pickup Van 1,975 3,087 56.3

Microbus 145 115 -20.68

Tempo 9 2 -77.77

Bikes 168,707 138,907 -17.66

161

Tractor/power-trailer 11,460 7,937 -30.74

Others 31 133 329

In this table show the change in percentage of minibus and pick up van. The automobile

industry struggle for survival in Nepal though in 2010-11 registration of minibus and pick up

van increase.

Reason Of Increase Registration In Minibus And Pickup Van

1. Due to tourism

2. Due to transportation

These two are main reasons to increase registration of minibus and pickup van.

Due to tourism

Mode of transportation

Minibus And Van For Transportation

Minibus

Rent A Car Nepal - Silk Road Group provides currently different types of Mini Bus servicing

the main tourist’s destination of Nepal. The plush interiors have been specially designed to

provide a comfortable journey while the enough windows offer a panoramic view of the

countryside.

The fully air-conditioned interiors will keep you cool during hot summers and humid

monsoon while the soon to be installed heaters will keep one warm and cozy during the

winters. In a mini bus normally 15/20 people can easily exist.

Whether your auto rental is for business or pleasure, always remember that having the right

car for the same makes a lot of difference. Rent-A-Car has emerged keeping in the mind

about the same.

Rent-A-Car, Nepal is one of the largest rental car arranger in Nepal having own fleet of

vehicles of all types with the wide network throughout the kingdom of Nepal.

162

We are the only one arranger in the town with great selection of vehicles of different types

available in the local market. Our car rental classes range from economy to luxury car rental

or from cargo van to pickup truck rental.

Vehicle Fleet: Rent-A-Car, Nepal has its own fleet of vehicles, ranging from the ordinary but

reliable Toyota corollas to the all sophisticated, all terrain four-wheel drive vehicles. We also

can make avail all the models of the cars that are operating in Nepal as per the requirements

of the people.

Vehicle Safety: All our vehicles are well maintained and kept clean at all times. Most of our

vehicles are Japanese, German and Korean made with some Indians as well. They have

proven to be the most efficient and reliable in the roads like Nepal also.

Roads

Nepal’s total road network and density are low and only 43 percent of the population has

access to all-weather roads. More than 60 percent of the network is concentrated in the

lowland (Terai) areas of the country.

In 2007, the network consisted of 17,282 km of roads. The road network expanded by 5%, on

an average a year, over the last decade, with faster growth until 2002.

Public Transportation Planning, Multi-modal integration and Transport Demand

Management

Features and Challenges

Primarily, private sector has been providing public transportation facilities •All the

airlines except one are operating privately.

Means of public transport are: buses, minibuses, microbuses, tempos (three wheelers)

and taxis (cars).

Government provides permission to the public transport providers.

Government is trying to make permission system more transparent and efficient.

In remote areas, even in certain districts, there is no motor road network. People are

demanding for the construction of motor roads in those areas.

163

In area having motor roads, maintenance of roads has become a challenge. In certain

roads authorities have started to raise funds from the vehicles for using particular

roads.

Government is planning to extend networks of motor-able roads to each and every

district and also to improve the quality of roads and proper maintenance.

Replacement of old vehicles also is a challenge. As the age of vehicles has not been

declared, pollution created due to the emission of vehicle has also become a challenge

for Nepal.

Government in trying to implement vehicle replacement program also.

Scientific and appropriate system for determining fares of public vehicles has become

another challenge for the country.

There is 51 KM railway transport connecting Janakpurto Jayanagar (India). Out of

this only 29 KM is in operation. Similarly, dry ports of Birgunjand Bhairahawaare

connected directly to the Calcutta port with broad guagerailway.

Transportation Service in Nepal

Taxis & Tempos (three wheeler auto-rickshaws) can be hailed off the street, though it might

be a bit difficult to find after sundown.

Buses, mini-buses and three-wheeler tempos ply on fixed routes at regular intervals. These

public vehicles do not have a schedule and leave when there are enough passengers. The

services, however, are fairly frequent.

Rickshaws (two-seater tricycles) are a fun way to get around Kathmandu. They are

especially useful for short trips within the old parts of the city where cars can be a problem or

are prohibited due to the narrow lanes and crowded marketplaces.

Motorcycles, Bikes and Cars are available for renting in Kathmandu, Pokhara and many

other cities and towns of Nepal. The best way to see the old parts of Kathmandu is by

walking around but riding a bike or a motorbike is also another way to tour around the city

without feeling the traffic hitches.

Local Buses are available for short and longer journeys alike. These are the cheapest means

of transport. All the local buses leaving Kathmandu, departs from Gongabu bus park in Ring

Road - the north side of the city at different intervals and tickets has to be purchased in

advance.

164

Tourist Buses are specifically meant for the tourists only. These are run by private bus

companies or travel agencies. Tourist buses are more comfortable, faster and less crowded

and more expensive compared to the local buses.

Trucks are used to transfer goods but sometimes these trucks can get you to places although

these vehicles aren’t licensed as passenger vehicles. When you are stuck in the middle of

your journey, you can try hitch hiking the truck which might be travelling on the same route.

Challenges in Nepal’s Automobile Industry

Nepal has come along a long way in the automobile sector. Rana Prime Minister Juddha

Shamsher Rana introduced vehicle for the first time in Nepal on B.S 1958. Later on it takes

professional turn on B.S 2017.

Automobile sector provides a very important input to the national economy through its job

generating capacity for its unskilled, skilled and semi skilled labors. It can contribute to the

upmost to boost country economy if taken seriously. It is a good source of tax revenue.

However, the development in automobile is very sluggish. It has been 3 decades of

establishment of Nepal Automobile Dealer Association, it hasn’t flourished yet. This is

because government has not focused on developing infrastructure for automobiles.

It’s necessary to reduce the hefty excise duty imposed on the import of automobiles. In

addition, increase in fuel costs, political instability, the long term growth story of Nepal’s

auto Industry remains intact.

Another important thing is involvement of private sectors in government agencies like

Revenue Advisory Committee, Customs Evaluation Review Committee, Roads Board and

National Transport Board is necessary.

It is important that government should discuss the issues with the private sector before

issuing new rules so that they can be implemented promptly without hassles. However, the

initiative of the government to implement Euro 3 standard is praiseworthy.

With the implementation of Euro III in Nepal, air pollution can be controlled to some extent.

A recent study shows 60 percent of air pollution in the capital is contributed by vehicles. Of a

total of 1.2 million vehicles in Nepal, 800,000 are registered in Bagmati zone.

165

It is imperative that the government plays a role in raising Nepal’s auto market through

creation of a favorable business environment, attracting investments, promoting R&D and

facilitating infrastructure creation. The automobile industry also has the opportunity to

proactively establish best in class practices specifically in labor policies and innovative

business models for mobility. If government takes initiation and work accordingly this will

significantly impact the revenues, costs and profitability of stakeholders. Nepal has higher tax

duties in vehicles as compare to other countries. Government has imposed one of the world’s

highest import duties 240 per cent on automobiles and increase in excise duty by 10 percent.

It is no wonder that Nepal’s auto industry is suffering from a terrible decline in sales. Two

other reasons behind deceleration of auto transactions are difficulty in accessing auto loans

and high interest rates on available ones.

166

Readymade garments Industry

GUJARAT TEXTILE SECTOR PROFILE

In 2006-07, textile exports amounted to US$ 19.2 billion, almost 15% of the country’s

total commodity exports.

The domestic and export markets and expected to grow at 6.5% and 12% CAGR

respectively.

Exports from India include yarn, fabrics and made-ups of cotton, manmade fibre,

wool, silk, jute and carpets.

The Industry is highly laboured intensive and accounts for almost 21% of the total

employment in the country.

Foreign direct investment in textiles has more than quadrupled in 2006-07 to US$

19.5 billion.

Apparel manufacturing includes designing, pattern making, cutting, embellishing,

stitching, finishing and packaging for distribution.

Significant facts about Gujarat textile industry vis-à-vis India

Cotton: largest producer (35%) and exporter (60%)

Denim Production: 3rd largest in the World and largest in India (65-70%).

Multihead embroidery machines: Largest number in the world (over 40,000) installed

in last 3 years (Surat).

Over 24% to 28% of fixed investment, production value and employment of small

scale industries (SSI) are from textiles sector.

Presence of textile-related academic institutes caters to the manpower requirement of

this highly labour intensive industry.

Technical textiles are a key emerging area with over 860 units in Gujarat (as per

Government of Gujarat’s survey report).

Surat is India’s strongest bas for synthetic fabrics.

167

NEPAL: Garment export declines by 48 percent

The export of readymade garments, one of the largest foreign currency earners of the Eastern

Region, has dropped by around 48 percent during the first six months of this fiscal year...

KATHMANDU: The export of readymade garments, one of the largest foreign currency

earners of the Eastern Region, has dropped by around 48 percent during the first six months

of this fiscal year; alocal newspaper reported on March 06. Readymade garments worth Rs

1.13 billion were exported during that period, down from the export of Rs 2.19 billion in the

review period of last year; the latest data of Trade Promotion Center (TPC), Eastern Region

shows.

"Nepal's toughest challenge is not concluding the peace process or drafting the constitution,

but rather building an economic future"

I believe that Nepal's toughest challenge is not concluding the peace process or drafting the

constitution, but rather building an economic future for the young people of Nepal. Today,

when we look at a Nepal where 73 per cent of the population is under 35 years of age and 50

per cent is under 18, we have to ask: do they feel invested in their nation? Do they see

opportunities? Do they see a bright future for themselves in their homeland?

Nepal is situated between India and China, two of the fastest growing economies in the

world. That's an enviable location. Just the spillover effects from these two economies should

create thousands of jobs and expand trade. But, in reality, Nepal's economy will likely grow

this year by an anemic 3.5 per cent, one of the lowest growth rates in Asia. Investors are

scared off by the political instability, labour problems, and power shortages.

Policies and Norms of Nepal for Garment Industry for import /export including licensing / permission, taxation etc

Government Policies and Laws

Government of Nepal has initiated reforms in the economic policies and laws since the early

1990’s and several many changes have been announced to liberalize trade and

investment. Reforms in economic policies and laws have encouraged the private

sector to take a lead role in economic activities and the entire manufacturing and trading

activities ate under private sector’s operations and ownership’s. HMG acts as the

168

facilitator and is not engaged in the manufacturing and trade. Trade and industry policies if

HMG advocate the promotion of the textile and garment sectors accordingly, laws and

regulations have been incorporated to regulate to regulate and develop these sectors the

government policies considered friendly by the garment industry are:

• Bonded warehouse facilities for import of raw materials.

•Refundable VAT.

•Customs duty, excise duty and sales tax on raw materials and auxiliary raw materials of

export-oriented industry are reimbursed within 60 days.

•Customs duty excise duty and sales tax imposed on production on of intermediate goods

used in production of export goods is reimbursed to importers within 60 days.

• Abolition of export license system.

• Full convertibility to Nepalese Rs in current account transaction.

Industry Registration under Department of Cottage Industry:-

This department registers the industry with the machinery and equipment of

below 2, 0 0 , 00 0 . Th i s de pa r tme n t d oe s n o t ha ve l i c e nse i s s u i n g p r oc e s s

a n d l i c e n se i s s u in g c omm i t t e e . A pe r so n w ho wa n t s t o r e g i s t e r a n

i nd us t r y i n t h i s de pa r tme n t ha s t o submit:

a) Duly filled 2 copies of application form,

b) Two copies of details scheme,

c) A copy of citizenship certificate and

d) Rs. 5.00 as application fee.

H e sh ou l d a l so pa y the r e g i s t r a t i on f ee a t t he t ime o f i n du s t r y

r e g i s t r a t i on . Af t e r t he r e g i s t r a t i o n o f i nd us t r y a nd be g inn in g o f i t s

p r od uc t i on t h i s de pa r tme n t r e c omme nds I SC f o r va lue a d de d . I t a l so

r e c om me n ds f o r t he f o re i gn e xc ha n ge facility and rebate in the custom duty.

169

Present Trade barriers for import / Export for Garments

Major Problems of Garment Industry in Nepal

By reviewing and analyzing different articles, thesis, books and other published

and un pu b l i she d sou rc e s the maj o r p ro b le m f a c e d b y gar me n t ind us t r y

i n Ne pa l a re a s follows:

Readymade garments productions are in a large scale and the export of i t f r o m

N e p a l i s a n e w p h e n o m e n o n . I n t h i s i n i t i a l p e r i o d , i t

h a s we lc ome d ma n y in du s t r i a l i s t s , l a bo r , c a p i t a l a nd e q u ipme n t f r

o m India. As such, major benefits out of this sector have been utilized by

the Indians and Nepal has become only the media.

T h e g a r m e n t s p r o d u c e r s h a v e t o f o l l o w d i f f e r e n t g a r m e n t s

s e m i garment rules and regulations and these rules and regulations compel

the producers to cross different channels. This has created harassment and

delay in shipment of the finished products.

M os t o f the l a bo ur s , sk i l l e d a n d sem i - sk i l l e d a re f rom I nd ia .

R ou gh e s t i m a t i o n o f t h e I n d i a n l a b o u r s i n t h e s e f a c t o r i e s i s

m o r e t h a n 5 0 percent. Nepalese labours have been utilized only in

simple works like thread cutting, checking, packaging and for port rage.

T h e r e s e e m s t o h a v e n o d i r e c t c o n t a c t o f t h e b u y e r o f

r e a d y m a d e garment in USA.

Ra w ma te r i a l s u se d a l mos t a l l c ome s f rom In d ia de s p i t e o f so

ma n y mills and textile produce cotton fabrics in Nepal.

T he o r t ho do x in I nd ia n i n f lo w in t h i s t i n y c a p i t a l ha s the c ha nc e s

t o cause a lot of problems in socio-political and cultural aspects of social

life. If the situation remains the same, in long run, they all convert

into permanent settlers.

The production of readymade garment is not for the local market. All of

them are of high fashion and are subject to exporting to the America and

European world. The general people have nothing to do with them. T h e a m o u n t

170

o f e x p o r t i s v e r y h i g h a n d i t i s n o t t h e w a y t o b e f i r s t

amounting the hard currency generating exports of Nepal.

Reasons for India’s recent slow-moving export performance in textiles and

clothing include:

Slowdown in demand from some major importers.

o The depreciation of the US dollar, resulting in an appreciation of the rupee vis-

à-vis competitor countries that were partially or wholly pegged to the US

dollar.

o Labour laws and scale economics: Countries like China have historically had

high labour flexibility in their export oriented units. This has allowed them to

achieve large scale in terms of labour force employed in each manufacturing

facility and reap the benefit of scale economies and use the latest advanced

machinery from developed countries. India, in contrast, because of

fragmentation of units and small scale (to avoid labour laws applicable to

employees above 100 and procedural biases and rigidities), has purchased

relatively less of such advanced machinery.

o Logistical delays and costs: though the national highways are improving, this

is not true of connectivity to all sources and destinations. The turnaround time

in major ports of India and movement of cargo between ships and source or

destination within India is still plagued by monopolistic bureaucratic

structures with little accountability and incentives for efficient service delivery

to the exporter and importer.

o High cost of power in India this is 1.5-2 times higher than in competing

nations.

171

Potential for import / export in India / Gujarat MarketCurrent situation of garment industry in Nepal

Production and employment situation

Two types of textiles and clothing industries:

Domestic market based Totally export oriented

Domestic market based industries are traditional and fragmented withslow growth trend

Rapid growth of export oriented industries until mid-1990 and downtrendsince 2003

Currently, only 99 export oriented industries with direct employment of10,000 approximately

Employment during booming period was 50,000.

Year Total apparel exportvalue (In '000 NRs.)

Overseas marketshare (%)

Indian market share(%)

2000-01 11,623,346 98.34 1.652001-02 7,965,796 97.31 2.682002-03 12,012,949 96.67 3.322003-04 10,179,244 93.84 6.152004-05 6,672,911 94.51 5.482005-06 6,558,275 82.65 17.37

172

Textile industry in Nepal

Key Economic Indicators 1991/92 1996/97 2000/01

Total investment Rs 15 billion

Production capacity 150 million

meters

Present estimated production 20 million

meters

Capacity utilization 13.3 per cent

Estimated total domestic demand 350 million

meters

Share of local textile production in

domestic demand

6 per cent

Share of import in domestic demand 94 per cent

Value addition in total manufacturing

activity (%)

6.7 8.4 12.1

Excluding pashmina 6.7 8.4 3.1

Employment 16238 20633 6000*

Share of total manufacturing employment

(%)

7.3 10.5

Number of total establishments 254 296 61

Cotton textile terry towel 12

Synthetic textile 22

Synthetic yarn 16

Jute products 11

Foreign joint venture establishments 1

Share of total number of manufacturing

establishments (%)

5.9 8.3

Annual average value added growth rate

at constant prices (%)

3.8 5.8 9.9

Excluding pashmina 3.8 5.8 -19.5

Value added output ratio 40.9 37.9 36.0

Excluding pashmina 40.9 37.9 21.6

173

Business Opportunities in future

Opportunities

India's strategic location, between Middle East and South East Asia, presents itself as a

country with immense business opportunities. Its neighbors include Pakistan, China, Nepal,

Sri Lanka and Bangladesh. The countries labor advantage adds to this. India has vast reserves

of technical and scientific manpower, backed by engineering and management institutes of

excellence. India's skilled labor is in great demand in the world's premier organizations. Both

skilled and unskilled labor is easy to find and wage rates are highly competitive compared to

international levels. Language is not a barrier as the professional work force is conversant in

English and the main transactions and procedures are done in the same language. The

government also provides a number of incentives and facilities for exporters. India's rich

resource and production base provides significant opportunities for investors to establish

export units.

SWOT ANALYSIS

SWOT Analysis of Indian Garment Industry.

Strengths:

Indian Textile Industry is an Independent & Self-Reliant Industry.

Abundant Raw Material availability that helps industry to control costs and reduces

the lead-time across the operation.

Availability of low cost and skilled manpower provides competitive advantage to

industry.

Availability of large varieties of cotton fibber and has fast growing synthetic fibber

industry.

Indian has great advantage in spinning sector and has a presence in all process of

operation and value chain.

Indian is one of the largest exporters of Yarn in international market and contributes

around 25% share of the global in cotton Yarn.

The Apparel Industry is one of the largest foreign revenue contributors and holds 12%

of the country’s total export.

174

Industry has large and diversified segments that provide wide variety of products.

Growing Economy and Potential Domestic and International Market.

Industry has Manufacturing Flexibility that helps to increase the productivity.

Weaknesses:

Indian Textile Industry is highly Fragmented Industry.

Industry is highly dependent on Cotton.

Lower Productivity in various segments.

There is Declining in Mill Segment.

Lack of Technological Development that affect the productivity and other

activities in whole value chain.

Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and

transportation Time.

Unfavourable labour Laws.

Lack of Trade Membership, which restrict to tap other potential market.

Lacking to generate Economies of Scale.

Higher Indirect Taxes, Power and Interest Rates.

Opportunities:

Growth rate of Domestic Textile Industry is 6-8% per annum.

Large, Potential Domestic and International Market.

Product development and Diversification to cater global needs.

Elimination of Quota Restriction leads to greater Market Development.

Market is gradually shifting towards Branded Readymade Garment.

Increased Disposable Income and Purchasing Power of Indian Customer open New

Market Development.

Emerging Retail Industry and Malls provide huge opportunities for the Apparel,

Handicraft and other segments of the industry.

Greater Investment and FDI opportunities are available.

175

Threats:

Competition from other developing countries, especially China.

Continuous Quality Improvement is need of the hour as there are different demand

patterns all over the world.

Elimination of Quota system will lead to fluctuations in Export Demand.

Threat for Traditional Market for Power loom and Handloom Products and forcing

them for product diversification.

Geographical Disadvantages.

International labor and Environmental Laws.

To balance the demand and supply.

To make balance between price and quality.

SWOT Analysis of Nepal Garment Industry.

Nepal has many potential factors to flourish foreign investors. With its scenic beauty and a

dense population, Nepal provides several other financial features to foreign investors. The

SWOT analysis of Nepal in relation to investment provides basic information on ensuring

investment.

Strength:

Location between the two potentially largest markets in the world: China and India

Macroeconomic stability and a relatively liberal economy

Trainable and low-cost work force

Substantial natural and cultural assets

Small and accessible bureaucracy and a generally business-friendly Government

176

Weakness:

Landlocked country

Poor infrastructure and mostly unskilled workforce

Rigid and intrusive labour legislation

Political instability, weak implementation and persistent corruption

Opportunity:

Tourism, including sports and adventure tourism, health tourism and cultural tourism

A variety of niche agricultural and agro-business activities

Hydropower generation and infrastructure development generally

IT-based services

Threat

Political instability and other internal environment

Infrastructure

177

Conclusion

Banking Industry

After analysis of Financial Market of Nepal we can conclude that, Financial sector

has evolved as a dominant sector in Nepalese economy. There are altogether 237

financial institutions employing more than 20,000 people and managing

approximately Rs 502 billion worth of assets.

There is a wide array of products about which the banking community of Nepal lacks

adequate knowledge and technology for their use and appropriate corporate

governance. In this context, Nepal’s our financial market needs appropriate

measures for improving knowledge level of human resources, use of technology and

improving corporate governance.

Nepal has become member of World Trade Organization (WTO) and has committed

to open Financial Services Sector (FSS) especially banking services to the foreign

banks and financial institutions by 2010. This could be threat as well as opportunities

for banking sector of Nepal. The existing level of Non- Performing Assets (NPA) is

not that much healthy sign for the smooth growth of banking sector. One should

seriously need to re-think proper strategy for managing NPA.

After study Nepal country with reference to “FINANCIAL MARKET OF NEPAL”. We

have Analysis of Nepal businesses or encourage the Expansion of Small and

Medium Sized Enterprises (SMEs) in rural sector could lure (attract) to banking

sector to invest on it too. Managing inflow of remittances would yield fruitful outcome

for Nepal. Public private partnership concept will be equally desirable for poverty

alleviation, growth and expansion of banking service especially in the rural economy.

Nepal has high level of unemployment rate, which has been indicated high supply of

labour force so there is opportunities for labour intensive technology for industry

sector, which has been help to decrease unemployment rate and increase GDP

contribution.

178

Tourism Industry

From the analysis of the contents like Demographic and Geographic information,

Impact of international organization on trade between India and Nepal, Tourism

scenario about the Nepal, we conclude that only Nepal is the Hinduism Nation in the

world having so many attractive heritage sites which fetch worldwide tourists

including on an average 19% tourist from India to visit Nepal. In addition, Service

sector composites of 52% overall in Nepal GDP which led us to select the Hotel

Industry for further micro analysis and establishment of Hotel in Nepal will give good

returns.

In bellow mentioned model it is seen that for establishment of Hotel, there are

different sector which affect the selection of hotel in Nepal like transportation, water

supply, steel etc.

Casino Industry

The above study shows the Economical & Industrial Overview of Nepal. The

developing country’s inflation rate as compare to India is very high. The Nepal

Government tries to maintain it as possible. In the year 2002-03 & 2003-04, the rate

was 4.8 & 4.0 respectively. It is seen that the inflation rate decreased by 0.8% in

Nepal. The reasons for that might be the purchasing power of buyer decreased &

therefore increased in price. But the rate 4.5% means the addition of 0.5% inflation

rate in Nepal.

It was the situation in which the prices increased by 4.5%. For example, if a

particular product says bike was priced by Rs.100000, at that time it was sold at

Rs.104500. So this is the actual difference of both prices. Customer had to pay this

much amount Rs.4500 more.

The interest rate for the bank deposits is low so that the people are unable to

deposits or may be motivated not to deposit. The rate for loan is high so that the

industrial sector also unable to establish the business firm in the Nepal. The foreign

trade has improved by 5.9 percent to Rs 462.1 billion in last fiscal year. The total

involvement of import and export stood at 86 percent and 14 percent respectively.

179

Woolen carpet, readymade garment, lentil, textile, iron and steel products,

handicrafts, silver ornaments, noodles, cardamom, tea, herbal products, handmade

papers, Pashmina were the major exportable items from Nepal during the period.

Budget surplus of Nepal for the F.Y 2011 is 7.7% of GDP. Power, irrigation and

industrial labor, have hurt the economy, which was forecast to grow 3.5 percent in

the current fiscal year. $3.39 billion would be met from revenue collection and $984

million from foreign grants, a key source of support for development projects.

Transport Industry

With the help of this study conducted by us on the transport industry we come to

know that Nepal is a land lock but highly rich in bio-diversity country. The main

source of income for Nepal is tourism and with the help of tourism Nepal can earn

money and lead it -self towards the development and gain prosperity.

Many tourist come to Nepal for many reasons. Some come to enjoy the nature,

some comes for sports and adventure activities, and some come to enjoy cultural

diversity found in Nepal.

Nepal being the under-developed country and neighboring country of India. It is easy

to carry out business in transport industry. The labour force found in Nepal is

cheaper than that of Idia and other raw material required like steel and aluminum to

make the transport equipments like railway tracks and boogies is also found at

cheaper rate. The tourism industry is also improving gradually in Nepal and more

number of tourists is visiting from India /Gujarat to Nepal

Government of India and Nepal is also trying to increase trade relation in transport

industry by signing railway agreements and air agreements

There- fore we have selected transport industry to be studied in Nepal and seek out

the opportunities to carry out the trade in the transport industry.

180

Carpet industry

From the study of social environment and social problems of Nepal and also on

the basis of micro analysis of carpet industry of Nepal we can conclude that

Nepal is land full with various opportunities in terms of natural resources and

labor.

From the above study of Nepal we come to know that there is a lack of facilities

such as infrastructure, technology, science etc. there are not well developed

industrial sectors because of social and political problems and other in Nepal.

Economical and financial conditions are not well in Nepal, so we come to the

conclusion on that there are opportunities for the industries because of lack of

the above discussion of factors in the report.

The country is also facing financial problems as it has to take financial loans and

aid from other countries in order to run their economy. Besides these the country

is performing somewhat well in agriculture and handicrafts products. As it attracts

a lot for tourists and other local products.

In the view of social environment and social problems and various other situation

and resource constraints of the country it is very difficult for Nepal to cope up with

various social problems. Nepal is underdeveloped country and like other

countries the social problems of Nepal is same as infrastructure problems;

poverty, illiteracy, lack of political commitment and various other factors make the

situation more complex. Our report includes various social and cultural aspects

of Nepal and it also includes the problems of social and cultural factors of Nepal.

We observed that the economy of Nepal is mainly dependent on agricultural

sector. Therefore it is necessary to create awareness among the people of Nepal

for the improvement in the problems they are facing.

It would be feasible to provide Nepal the raw materials for the carpet industry

from India as India and mostly Gujarat is having plenty of raw materials related to

carpet such as cotton wool. What it need is its efficient use in the carpet sector of

Nepal and also it will increase the GDP of India and Gujarat as we are going to

export the raw materials to Nepal. It will also provide employment opportunities to

people of Gujarat.

181

There were also found very positive approach between Nepal and Gujarat and

various opportunities to export raw materials to their carpet sector. Thus after

analysis of carpet sector of Nepal and Gujarat it was found very feasible to start

exporting them raw materials.

Automobile Industry

We have concluded from the project that opportunities for automobile sector in Nepal

are seen because of tourism and transportation. Nepal is a tourist place so facilities

for transportation like mini bus and pick up van is provided to tourists. These facility

is given for the safe journey, expensive, fully air conditioner where passengers can

go anywhere at any time not fixed time like city buses or local buses. For earning

revenue transportation facility is provided.

The manufacturing cost will be more for automobile sector in Nepal so to reduce the

manufacturing cost, India will manufacture the automobile sector (vehicles) and will

export to Nepal, due to which the cost will decrease and opportunity for

transportation will increase with low cost. India and Nepal trade relation in which the

benefits of free trade are seen. No excise duty is seen while trade between these

two countries. Free import duty between India and Nepal.

Thus transportation facility is given to tourists for it less expensive, safe, non-

polluting, and equipped with facilities, and effective. So the transportation and

tourism is the biggest opportunity for earning profit.

Readymade garments

The trends discussed above clearly show that the fashion business is exploring all

aspects of expansion i.e. it is bound for a multilateral expansion rather than only

unilateral expansion. Multi lateral expansion is happening at every part of the value

chain as well as for every consumer segment. The Indian Garment Industry is taking

cue from international standards as well as the burgeoning consumer appetite to

create their own growth path.

182

Fashion companies are taking a much larger perspective of this industry in India and

on Salivating their position to face it. On the other hand, the Indian consumer is at a

preliminary stage of development and yet due to international exposure trying to

keep pace with the international fashion scene creating unprecedented pressure on

companies to perform.

More emphasis should be given on the micro and macro level economic factors.

These factors indirectly or sometimes directly affects each and every business in the

economy, marketers should be proactive enough to foresee the future impact of

these factors on their business.

Look for co-branding: It involves merging two or more well known brands into a

single product. It is an effective way to leverage strong brands and helps in gaining

synergy by having the best combination of unique strength each brand has. Co-

branding can be based on innovation, ingredient, alliance, supply chain or any other.

Find out new ways of communicating to customers, like sending information about

new products, offers, stocks, etc through sms to cell phones.

Industrialists shouldn’t consider the expenditure on R&D and technology as a cost, it

should be considered as an investment because it pays rich dividend in future.

Industrialists must emphasize on improving the standard of labors because garment

manufacturing is a labor intensive industry. The productivity of industry directly

depends upon the productivity of labor.

Give priority to consumers’ opinion. Keep in touch with customers by creating loyalty

clubs and online data bases and opinion leaders.

Marketers are under estimating the importance of Visual merchandising, visual

merchandisers not only makes the store look impressive but they also makes sure

right wears are kept at the right place in the store.

183

Blend up the bollywood, cricket and other entertainment mix with other areas such

as product design, distribution channel, price, promotion activities. Using celebrity

endorsement can prove effective provided the credibility and popularity of celebrity is

taken into consideration.

It has been seen in apparel retail stores that mostly. In store advertisements to

communicate various promotional offers, thus only that part of population is reached

that is already visiting the stores. Thus using Outdoor advertising & promotional

campaigns is quite important.

184

Bibliography

1. Nepalartshop.Products of Nepal retrived fromhttp://www.nepalartshop.com/pashmina.php

2. nepalartshop.Nepal Garments retrived fromhttp://www.nepalartshop.com/garment.php

3. alibaba.Fashion in Nepal retrived fromhttp://www.alibaba.com/countrysearch/NP/fashion-garment.html

4. indexmundi.Nepal Demographics Profile 2013 retrived from

http://www.indexmundi.com/nepal/demographics_profile.html

5. bharattextile.Current Issue retrived fromhttp://www.bharattextile.com/newsitems/1998941#ixzz2RwNPc5LS

6. nepaltimes.Current Issue retrived from

http://nepalitimes.com/news.php?id=18512#.UXp1zKJabVU

7. infodriveindia.Current Issue retrived fromhttp://www.infodriveindia.com/export-import-news/business-news/export-of-

readymade-garments-to-11700.aspx

8. Nepal.smetoolkit.trade promotion centre nepal retrived from

http://nepal.smetoolkit.org/nepal/en/content/en/1638/Customs-Clearance-for-

Imports

9. nepal.smtoolkit.A Guide on Export Procedure and Documentation retrived

from

http://nepal.smetoolkit.org/nepal/en/content/en/1702/A-Guide-on-Export-

Procedure-and-Documentation

10. ficci.Taxation of dividends from overseas retrived from

http://www.ficci.com/SEdocument/20215/FICCI_PRE-BUDGET-

MEMORANDUM-2013-14.pdf

11.export.taxation of dividends from overseas retrived from

http://export.gov/india/build/groups/public/@eg_in/documents/webcontent/eg_

in_049379.pdf

12.unescap.Challenges in post MFA retrived fromhttp://www.unescap.org/tid/mtg/weaving_nep.pdf

185

13. IMF (2010), Nepal: Staff Report for the 2010 Article IV Consultation and

Request for Disbursement under the Rapid Credit Facility.

Viewed at: http://www.imf.org/external/pubs/ft/scr/2010/ cr10185.pdf

14. IMF (2011), World Economic Outlook, September.

Viewed at: http://www.imf.org/external/pubs/ft/ weo/2011/02/pdf/text.pdf

15.Ministry of Commerce and Supplies (2010a), Nepal Trade Integration Strategy

2010: Executive Summary and Action Matrix.

Viewed at:http://www.enhancedif.org/documents/Press%20releases/Nepal%20NTIS.pdf.

16.Acharya, Meena (2003) "The Development of the Financial Sector and Its

Impacts on Poverty Alleviation in Nepal” Economic Review: Occasional Paper

No. 15, Nepal Rastra Bank.

17.Aghevli, B., J. M. Boughton, P. J. Montiel, D. Villanueva, and G. Woglom

(1990). “The Role of National Saving in the World Economy.” IMF Occasional

Paper No. 67, (Washington:International Monetary Fund

18.Data of setup business in Nepal Retrieved from :- http://www.nicci.org/pdf/i-

guide/i-guide.pdf

19.Statistics Nepal. (2011-12). Nepal in profile 2011-12. Retrieved from

https://www.cia.gov/library/publications/the-world-factbook/geos/np.html

20.Statistics Nepal. (2011-12). Nepal in profile 2011-12. Retrieved from

http://www.nepalembassy.in/aboutnepal.html

186

http://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm

21.Source: NATIONAL SERVICES POLICY REVIEW OF NEPAL.

Data of sector wise contribution in GDP of last 10 financial Year Retrieved

from

http://www.mof.gov.np/ajw/uploads/uploaded_image/Chapter%20All-Final-

Edited.pdf

22.Data of trade and commerce. Retrieved from

http://www.indianembassy.org.np/trade-and-commerce.php

23.Data of trade and commerce. Retrieved from

http://www.indianembassy.org.np/trade-and-commerce.php

24.Data of setup business in Nepal.Retrieved from

http://www.nicci.org/pdf/i-guide/i-guide.pdf

25.Data of imports from India. Retrieved from

http://www.nicci.org/pdf/Imports%20from%20India%20against%20the

%20US%20Dollar%20Payment.pdf

26.Data of exports to India. Retrieved from

http://www.nicci.org/pdf/export-to-india.pdf

27.Data of Tourist arrived in Nepal. Retrieved from

www.nicci.org/pdf/tourism-scenario-nepal-2010.pdf

28.Statistics Nepal.(2011-12). Nepal in profile 2011-12. Retrieved from

https://www.cia.gov/library/publications/the-world-

factbook/geos/np.html

29.Statistics Nepal.(2011-12). Nepal in profile 2011-12. Retrieved from

http://www.nepalembassy.in/aboutnepal.html

http://www.wto.org/english/thewto_e/whatis_e/who_we_are_e.htm

187

30.Hotel industry in Nepal Retrieved from

http://www.hotelassociationnepal.org/

31.Data of sector wise contribution in GDP of last 10 financial Year Retrieved

from

http://www.mof.gov.np/ajw/uploads/uploaded_image/Chapter%20All-

Final-Edited.pdf

32.Data of Hotel statistics Retrieved from Source: Nepal Tourism Statistics 2011 (Annual

Statistical Report)

http://www.nicci.org/pdf/export-to-india.pdf

33.Data of BusinessOpportunities in Nepal.Retrieved

fromhttp://www.artamus.in/nepal.html

34.Data of Introduction & Casinos Retrieved from

http://www.nepaltourism.net/casinos-in-nepal.html

35.Data of Refreshment and Dinning & Foreign ExchangeRetrieved from

http://www.yatranepal.com/casino.html

36.Data of Casino AnnaRetrieved from

http://www.casinocity.com/nepal/kathmandu/casino-anna

37.Data of Casino EverestRetrieved from

http://www.casinocity.com/nepal/kathmandu/casino-everest

38.Data of Casino Nepal Retrieved from

http://www.casinocity.com/nepal/kathmandu/casino-Nepal

39.Data of Casino Royale Retrieved from

http://www.casinocity.com/nepal/kathmandu/casino-royale

40.Data of Casino Rad Retrieved from

188

http://www.casinocity.com/nepal/kathmandu/casino-royale

41.Data of Overview Of Packages Of Casino In Hotels Retrieved from

http://www.yatranepal.com/casino.html

42.Data of Economic factors Retrieved from

http://www.dineshbakshi.com/igcse-business-studies/external-

environment/revision-notes/64-economic-environment-factors

43.Data of Political, Social & Technological Factors Retrieved from

http://businesscasestudies.co.uk/jessops/responding-to-changes-in-

the-market-environment/technological-factors.html#ixzz2P5MggBru

44.Data of Overview Of Casino Industry In IndiaRetrieved from

http://www.helsinki.fi/iehc2006/papers1/Mishra24.pdf

45.Data of Casino License Retrieved from

www.aglc.gov.ab.ca/pdf/gaming/gaming_forms/5420

46.Data of Number of Tourists Retrieved from

tourism.gov.np/uploaded/fullpage.pdf

47. ICF International (2012). Children Working in the Carpet industry of India:

Prevalence and

48.Conditions. Research on Children Working in the Carpet Industry in India,

Nepal and

49.Pakistan. ICF International: Calverton.

50. ICF International (2012). Child Trafficking and Bonded Labor in the Carpet

Industry and Sending Areas in Nepal. Research on Children Working in the

Carpet Industry in India, Nepal ICF International: Calverton.