The Nepal government has made it mandatory for investors to set up two-wheeler assembly plants in the country to ensure certain domestic value addition, employment, and environmental standards.
A number of assembly plants, mostly electric vehicle plants with Chinese investment, have been registered, according to the Department of Industry.
As per a notice issued by the department on Tuesday, a motorcycle assembly plant must ensure domestic value addition of at least 10 percent in the first year and at least 30 percent within five years.
A two-wheeler plant also needs to create at least 50 jobs in the first year and at least 200 jobs within five years and ensure the use of 10 percent domestic materials in vehicle assembly within five years.
"An examination in regard to environment and safety standards would be done by a committee involving relevant stakeholder agencies such as the Department of Environment, Department of Transport Management and Department of Industry," the notice said.
"We set the conditions as per the authority given to us by the law," Jiblal Bhusal, director-general with the Department of Industry, told Xinhua.
"The logic behind these conditions is that Nepal should benefit from vehicle assembly plants set up in Nepal in the areas of domestic value addition and employment after the government provides various tax exemptions for such plants," Bhusal said.
He added that his agency is also setting up standards for four-wheeler plants now. "The conditions will be more or less the same," he explained.
For now, Nepal fully relies on imported vehicles, particularly those from India.
As its market is growing, Nepal is attracting more foreign investors, including those from its northern neighbor that has registered at least 20 electric vehicle plants in the South Asian country since 2015, according to the Department of Industry.
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