New Delhi: Nepal wants Indian businesses to do more than sell goods in the Nepali market. It wants them to invest, set up industries, produce goods and become part of Nepal’s growing economy.
Finance Minister Swarnim Wagle made the appeal to Indian investors, industrialists and business leaders during a business and investment interaction organized by the Confederation of Indian Industry (CII) at the India Habitat Centre in New Delhi on Saturday.
Wagle said Nepal is at a stage where there are growing opportunities for investment and urged Indian companies already operating in Nepal to expand their businesses. He also invited new investors to explore opportunities in the country.
The programme was part of Wagle’s three-day official visit to India, during which he held talks with senior Indian officials and met representatives of the business and policy communities.
India remains Nepal’s biggest trading partner
India is Nepal’s largest trading partner and an important source of foreign investment.
According to the Embassy of India in Kathmandu, trade between the two countries reached about US$9.39 billion in 2025-26. India accounted for more than 60 percent of Nepal’s total merchandise trade during the period.
But trade between the two countries remains heavily tilted in India’s favour. Nepal imported goods worth about US$7.45 billion from India, while its exports to India stood at around US$1.94 billion.
The large trade gap is one reason Nepal has been looking for more investment in industries that can produce goods locally and increase exports.
Wagle told Indian business leaders that Nepal should not be seen only as a market for Indian products.
“We want Indian businesses to view Nepal not merely as a market, but as a strategic partner for investment, production, value addition and integration into regional and global supply chains,” he said.
Focus on new areas of investment
Wagle highlighted several sectors where he believes Indian businesses can invest.
They include clean energy, digital technology, high-value agriculture, tourism and manufacturing.
He also pointed to wellness tourism and production partnerships as areas with potential.
The government, he said, is working to make it easier for investors to do business in Nepal. He referred to recent measures related to the budget, taxes and investment policies and said the government was working to make the business environment more predictable and transparent.
Indian companies already have a strong presence in Nepal. They operate in areas such as manufacturing, banking, insurance, telecommunications, tourism and energy.
The Embassy of India says Indian companies account for more than 32 percent of Nepal’s foreign direct investment stock, based on Nepal Rastra Bank data.
Wagle urged these companies to consider expanding their operations.
Hydropower remains a major opportunity
Energy is one of the most important areas of Nepal-India economic cooperation.
Nepal has large hydropower resources, while India is the country’s main nearby market for electricity exports.
Electricity trade between the two countries has grown in recent years. Nepal has been exporting more power to India during the wet season, while both sides are working to expand cross-border transmission infrastructure.
Indian companies are also involved in major hydropower projects in Nepal, including the 900-megawatt Arun-3 and 900-megawatt Upper Karnali projects.
In 2024, Nepal and India signed a long-term power trade agreement that provides a framework for Nepal to export up to 10,000 megawatts of electricity to India over 10 years.
The figure represents a long-term target, not Nepal’s current level of electricity exports.
For Nepal, the expansion of electricity exports could provide an important source of foreign currency. For India, more electricity from Nepal could help meet growing energy demand.
Flood damage adds another concern
Wagle’s visit to India also comes as Nepal deals with the damage caused by recent floods.
The floods damaged roads, bridges, hydropower facilities and other infrastructure in several parts of the country.
During his meeting with Indian Finance and Corporate Affairs Minister Nirmala Sitharaman, Wagle discussed Nepal’s reconstruction and rehabilitation needs.
Nepal has asked India for support, but the two sides have not announced a specific new financial package for the latest disaster.
Nepal is carrying out an assessment of the damage and its reconstruction needs. The size of the assistance required will become clearer after that process.
India has already provided relief materials and technical assistance following the disaster.
Better connectivity is important for investors
Investment and trade depend heavily on transport and border infrastructure.
Nepal is landlocked and relies heavily on India for access to international markets. Roads, railways, customs points and transit facilities therefore play a major role in the cost of doing business in Nepal.
The two countries have been working to improve border infrastructure and trade routes.
Integrated check posts are operating at Birgunj, Biratnagar and Nepalgunj, while another is being developed at Bhairahawa. Work has also moved forward on the proposed integrated check post at Dodhara Chandani.
Rail freight services between India and Nepal have also expanded.
Such infrastructure is important if Nepal wants to attract companies that manufacture goods for both the Nepali and Indian markets. Businesses need reliable and affordable ways to bring in raw materials and send finished products to customers.
Manufacturing is another area Nepal wants to develop
Nepal has a relatively small manufacturing sector compared with the size of its import-dependent economy.
The government wants more goods to be produced inside the country instead of being brought in from abroad.
Indian investment could help in this area because Indian companies already have experience operating in Nepal and have access to large supply networks.
New investment in manufacturing could also create jobs, increase local production and provide opportunities for exports.
But investors will also look closely at Nepal’s taxes, regulations, infrastructure, electricity supply, labour market and government procedures before making major decisions.
That is why Wagle put particular emphasis on policy reforms and improving the business environment.
Agriculture, tourism and technology
Wagle also pointed to agriculture, tourism and the digital economy as areas where Nepal wants more private investment.
In agriculture, opportunities could include commercial farming, food processing, storage and other businesses that add value to farm products.
Tourism remains another major part of Nepal’s economy. The government is looking at areas such as wellness tourism and other higher-value tourism products.
The digital economy is also becoming an increasingly important part of Nepal-India cooperation.
The two countries have been working on digital payment and technology-related cooperation. Such links could make it easier for businesses and individuals in both countries to make payments and provide digital services across the border.
What Indian businesses are looking for
Indian business leaders who attended the CII programme showed interest in opportunities in Nepal, according to reports from the meeting.
Participants asked Wagle about Nepal’s investment policies, incentives, sector-specific opportunities and the general business environment.
The discussions, however, did not result in the announcement of a major new investment agreement.
For Indian companies, interest in Nepal will ultimately depend on whether projects can be operated profitably and with reasonable certainty.
For Nepal, the challenge is to turn interest from investors into actual factories, power projects, tourism businesses, technology companies and other productive investments.
A broader economic relationship
Wagle’s visit comes as Nepal and India are trying to expand their economic relationship beyond traditional trade.
Energy is becoming a bigger part of the relationship. Investment is increasing in importance. Connectivity is improving, while digital cooperation is opening new areas for business.
At the same time, Nepal continues to face a large trade deficit with India and remains dependent on imports.
That makes investment in domestic production particularly important for Nepal.
Wagle’s message to Indian businesses was therefore not simply about attracting more foreign capital. It was also about changing the way Nepal and India do business with each other.
Nepal wants Indian companies to invest in production, create jobs, add value to goods and connect Nepali industries with wider markets.
India already has a large economic presence in Nepal. The next question is whether that presence can lead to more investment in sectors that increase production and exports.
For Nepal, much will depend on how effectively it implements the reforms it is promising investors.
For Indian businesses, the decision will depend on whether Nepal can offer the infrastructure, policies and market conditions needed to make long-term investment worthwhile.
The CII meeting has opened that conversation. Turning the discussion into actual investment will be the harder part.
