CNI urges investment-friendly budget for FY 2083/84, Calls for policies to expand industry and private sector growth

KATHMANDU: The Confederation of Nepalese Industries (CNI) has submitted a comprehensive set of recommendations to Finance Minister Dr. Swarnim Wagle for Nepal’s Fiscal Year 2083/84 budget, urging the government to adopt an investment-friendly, industry-led growth strategy aimed at boosting industrial expansion, employment generation and private sector confidence.

Presenting the recommendations, CNI President Birendra Raj Pandey emphasized that the upcoming budget should prioritize “income generation and wealth creation” and treat the private sector as the engine of economic growth. The business body expressed confidence that effective implementation of its recommendations would help revive Nepal’s slowing economy, increase domestic and foreign investment, and create jobs.

The recommendations cover a broad range of sectors including industry and investment, foreign direct investment (FDI), taxation, customs, tourism, agriculture, herbs and forest products, energy, information technology, banking and finance, insurance, cooperatives, capital markets, domestic production, infrastructure, health, education, non-tax revenue and anti-money laundering systems.

CNI seeks long-term policy stability for industries

CNI has urged the government to place industrial development at the top of national priorities, while ensuring minimum 10-year policy stability to improve investor confidence and regulatory predictability.

The federation has proposed a competitive industrial development strategy focused on products where Nepal has comparative advantages, while prioritizing employment generation, production growth and import substitution. It also called for a digital one-door service system to streamline industrial approvals and government services.

To support domestic manufacturing, CNI suggested maintaining at least a two-tier customs duty gap between raw materials and finished products, implementing a net settlement system to refund or adjust customs duties on industrial raw materials, and providing tax incentives to industries using at least 40 percent domestic raw materials.

Tax reform and income tax threshold among key proposals

The business body has also called for a simpler, unified and investment-friendly tax system, with clearer interpretation of VAT, income tax and excise laws.

Among the major proposals is raising the minimum personal income tax threshold for individuals to Rs 1 million (10 lakh) and reducing tax rates. CNI has also recommended risk-based audits, digital tax administration, advance tax rulings and faster tax dispute resolution mechanisms.

The organization further urged the government to remove double taxation provisions under Sections 57 and 95A of the Income Tax Act, introduce civil liability in economic offences, and pursue broader legal reforms to decriminalize certain corporate issues and improve business predictability.

Push for stronger domestic industry and quality standards

CNI has proposed stronger coordination among government agencies to control smuggling and illegal trade, while advocating for minimum quality standards on imported goods.

The federation recommended strengthening the Nepal Bureau of Standards and Metrology (NBSM) and the country’s accreditation systems, upgrading laboratories to international standards and initiating talks with India for mutual recognition of quality certifications such as NS and ISI standards.

The organization also called for greater priority to domestic products in public procurement, including the use of a digital portal to identify and purchase Nepali-made products.

Private sector investment in infrastructure and overseas expansion

To attract private capital into major national projects, CNI recommended policies encouraging public-private partnerships (PPP) in sectors such as airports, highways, industrial zones, waste management and urban infrastructure.

The federation also proposed removing legal barriers preventing Nepali investors from investing abroad by repealing the Foreign Investment Restriction Act, 1964 (2021 BS) and introducing a clear regulatory framework for overseas investment.

In addition, CNI called for reforms allowing industries to use excess land as collateral, flexible land ceiling provisions for industrial projects, and a system allowing government dues and refunds to be adjusted through net settlement mechanisms.

Finance Minister signals openness to reforms

Receiving the recommendations, Finance Minister Dr. Swarnim Wagle acknowledged that private sector capital is essential for Nepal’s development, stressing the need for reforms in the legal and tax systems.

He said the government remains clear that economic development is not possible without private investment, and emphasized the need to attract greater private sector participation, particularly in infrastructure development.

The submission program was attended by CNI former president Rajesh Kumar Agrawal, past presidents Haribhakta Sharma and Vishnu Kumar Agrawal, Senior Vice President Nirvana Chaudhary, Vice Presidents Hem Raj Dhakal, Bhim Ghimire, Gokul Bhandari, and other business leaders and governing council members.