Commentary: policy instability and red tape hold back Nepal's industry
Opinion pieces in the Annapurna Post and Nagarik News blame unstable policy, red tape and weak markets for holding back Nepal's industry. A Nagarik editorial cites Lumbini Province data showing new small and cottage industry registrations down about 77 percent over five years.
Nepal sits between India and China and has energy, labour and enterprising people, yet its industry has not turned those advantages into growth. That is the argument of opinion pieces in the Annapurna Post and Nagarik News published in late October. They are commentary rather than news reports, so what follows sets out the writers' views and the figures they cite. Those figures have not been independently verified.
The Annapurna Post's five hurdles
Under the headline "Why industries do not come to Nepal", the Annapurna Post piece says the core problem is a weak system for turning potential into production, production into jobs and jobs into prosperity. It argues that investors look for stable policy, quick decisions and predictable rules rather than speeches at investment conferences. On remittances, it asks how much of the money reaches long-term production and warns that cash kept mainly in imported goods, land and other unproductive assets builds little lasting capacity.
The writer names five obstacles. Policy uncertainty: frequent changes to tax, customs and investment rules weaken long-term planning. Red tape: registration, land, environmental approval and power connections sit with different bodies, and the piece wants a genuine one-window system. Production costs: electricity alone is not enough without good roads, transmission lines, warehouses, cold storage and efficient customs. Markets: a small home market, competition from imports and complicated export procedures. Land and finance: suitable industrial land, long-term credit and tools for sharing risk.
The piece also proposes a "100 days, 100 reforms" programme, run with the private sector, financial institutions, technical experts and provincial and local governments. Its eight priorities include one digital window for industry registration and approvals, a time limit on every permit, ready industrial zones, public reporting on how much announced investment actually arrives, and fewer changes to key policies. It also cites the World Bank's October 2026 Nepal development report as putting industrial growth at 5.7 percent in fiscal year 2025/26.
What a Nagarik editorial counted
A Nagarik editorial headlined "The slogan of industrialisation alone will not bring prosperity" cites figures from Lumbini Province's Ministry of Industry, Tourism and Transport. They show 10,759 small and cottage industries registered in fiscal year 2078/79 (Bikram Sambat), then 4,254, 3,639, 3,267 and 2,501 in the four years after. The editorial says a fall of about 77 percent from the first year is not ordinary fluctuation and points to weaker investor confidence, and that the drop in new registrations runs from the hill districts to the main Terai trading centres.
The editorial links this to scarce capital, a shrinking market, costly or hard-to-get credit and shifting policy. It says banks hold money to lend yet lending to productive sectors is below expectations, while small entrepreneurs cannot meet collateral, paperwork and loan conditions. Priorities change with each government, it adds, and tax rates and rules are altered often. The current government pledged rapid industrialisation and wide job creation when it was formed, the editorial notes, and reports of industries closing raise doubts about whether that will be delivered. It asks for a nationwide study that sorts closed, ailing and under-capacity industries, and for public bodies to favour Nepali goods in procurement on quality and competitiveness.
Two more Nagarik pieces, on development and young people
A separate Nagarik opinion piece argues that development in Nepal is judged by process (was the budget allocated, was the contract awarded, is the work finished) rather than by results. It says agriculture should sit at the centre of national economic policy, linked to industry, markets and processing.
A Nagarik essay told through the story of a young graduate argues that the education system teaches students to pass exams rather than to create work, and that many young people go abroad out of compulsion when labour is poorly rewarded at home and starting a business is hard. It says parents are left alone, fields lie fallow and local trade slows. It also asks how a young entrepreneur can treat an investment as safe when floods and landslides, such as those on the Bhotekoshi, Trishuli and Kali Gandaki rivers, can wipe it out and insurance and post-disaster support are lacking, adding that cheap credit alone does not make a business succeed.
The four pieces differ in form, but they overlap in asking the government for stable policy, simpler procedures and measurable results rather than slogans.