Turmoil in Nepal hitting Indian investors: FICCIMay 6th, 2009 - 6:54 pm ICT by IANS
New Delhi, May 6 (IANS) There is a sense of insecurity among Indian investors in Nepal as the country drifts towards political turmoil, the Federation of Indian Chambers of Commerce and Industry (FICCI) has said.
“Industries are badly hit by acute shortages of power and raw materials, petrol and diesel supply have run out and labour unrest has struck at the very heart of businesses,” FICCI said in a report.
“We propose to take up the matter with the authorities in Nepal so that industrial operations are resumed at the earliest, which is in the interest of economic development of the region,” said FICCI secretary general Amit Mitra.
“FICCI is in touch with the authorities in Nepal, who also confirm that the economy is grinding to a halt and unless corrective action is taken, it would result in large scale industrial sickness and unemployment.”
In a veiled reference to Dabur Nepal, subsidiary of fast-moving consumer goods (FMCG) giant Dabur India, FICCI said: “The plight of Indian companies is exemplified by what a major Indian FMCG firm has had to undergo during the last six months.”
Dabur, which has a significant presence in Nepal since 1989, has been the target of Maoists and victim of trade unionism for the past six months.
“The Maoist trade union has unilaterally decided to stop work from August last year. This strike breached the long-term agreement signed between the workers and officials and also did not abide by the procedures laid down in the labour law,” FICCI said.
Maintaining that the closure has resulted in a loss of about Rs.1.3 crore per day for the company, FICCI said such actions would hurt the nation as a whole.
The report said an Indian paint company, which had invested heavily in plant and machinery, was re-thinking its plans and has put further investments on hold following constant labour trouble.
“The loss in production, for one, will be instrumental in further disbalancing the trade deficit of Nepal. Such illegal disruptions will definitely discourage FDI in the pipeline to Nepal.”
The report quoted a senior official of Nepal Infrastructure Development Co - a joint venture of the Mumbai-based Infrastructure Leasing and Financial Services in Nepal - as saying that new projects would be delayed.
“The decision taking process would be delayed because of the political crisis. Currently, the business environment is not conducive and the confidence of foreign investors is very low.”
FICCI said according to the Federation of Nepalese Chambers of Commerce and Industry, the impact was being felt across sectors.
“Fifteen days of strike in the Terai region, which happens to be lifeline and main highway of Nepal, has hampered business heavily. The foreign investments have nearly dried and no new joint ventures are being worked out.”
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