Finance Minister Khanal meets private sector leaders, Says Nepal’s investment climate improving

KATHMANDU: Rameshwor Khanal has said Nepal’s investment climate is gradually improving following coordinated efforts between the government and the private sector, despite earlier disruptions caused by the so-called Gen-Z protest movement.

During a meeting at the Ministry of Finance Nepal on Thursday, Khanal told representatives of major private sector umbrella organizations that the business environment and investor confidence—previously weakened by the Gen-Z movement—are now showing signs of recovery.

According to the finance minister, joint efforts by the government and the private sector have helped restore confidence among entrepreneurs and investors in Nepal’s economy.

Khanal said the movement had temporarily affected the business climate and lowered morale among entrepreneurs, but the situation has gradually stabilized through collaboration between policymakers and the private sector.

He emphasized that the government has been working to maintain macroeconomic stability, create an investment-friendly policy environment, protect domestic industries, and promote exports as part of Nepal’s broader economic strategy.

The finance minister also highlighted efforts to improve transparency and investor confidence in Nepal’s capital market, stating that reforms are underway to make the country’s financial and stock market systems more predictable and investment-friendly.

Nepal’s stock market, represented by the benchmark Nepal Stock Exchange (NEPSE), has recently seen improved trading volumes and investor participation, reflecting renewed optimism in the country’s financial markets.

Khanal acknowledged that some policy initiatives remain incomplete due to regulatory complexities and administrative processes. He said those pending tasks will be formally handed over to the next finance minister to ensure policy continuity and reform momentum.

Private sector leaders who attended the meeting also said that cooperation with the finance ministry has helped improve the business climate in Nepal.

They stressed that long-term political stability remains essential for economic growth, investment expansion, and national prosperity. Representatives expressed optimism that the outcomes of upcoming political developments and elections could provide a stable policy environment conducive to private investment.

However, the private sector also raised several unresolved policy concerns that continue to affect industrial competitiveness and business expansion.

Business leaders argued that Nepal’s value-added tax system needs reform, particularly the issue of multiple VAT rates, which they say complicates compliance and increases operational costs. They also called for changes in the tax structure on imports.

Specifically, they recommended that taxes imposed on imported raw materials should be at least two tiers lower than those on finished goods to protect domestic manufacturing and encourage value addition within Nepal’s industrial sector.

In addition, private sector representatives urged the government to evaluate the effectiveness of regulatory bodies overseeing industries and markets. They also called for reductions in high excise duty rates that currently affect several sectors of the economy.

The meeting was attended by key leaders of Nepal’s major private sector organizations, including Chandra Prasad Dhakal, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI); Birendra Raj Pandey, president of Confederation of Nepalese Industries (CNI); Kamlesh Kumar Agrawal, president of Nepal Chamber of Commerce; and Khem Raj Bhandari, president of Nepal Industry Commerce Federation.

The discussion reflects the continuing dialogue between the government and Nepal’s private sector as the country attempts to strengthen its economic recovery, boost foreign and domestic investment, and expand exports in the face of regional and global economic challenges.