India Inc in Nepal: Has the political will to woo Indian investment come back?
Sunday, 25/03/2012
http://economictimes.indiatimes.com/india-inc-in-nepal-has-the-political-will-to-woo-indian-investment-come-back/articleshow/12394543.cms
Last month, Hindustan Lever subsidiary Unilever Nepal remained shut for two weeks after its workers put up demands related to pay hikes and more perks. The trade union, affiliated to the Maoists, had locked the factory gates to press for their demands.
The management could reopen the factory only after an assurance from Nepal's prime minister Baburam Bhattarai to a delegation of Unilever representatives and other business leaders of the Federation of Nepalese Chamber of Commerce and Industries (FNCCI).
But the consumer goods giant is not the first company to face a difficult terrain in Nepal. Back in November 2008, Colgate Palmolive India announced its decision to move out of Nepal and transferred its shareholding in the subsidiary to Nepal-based Everest Hygiene Products, for an undisclosed amount.
This followed unrest at the factory, with angry workers attacking the general manager on fears of job losses. The Colgate Palmolive subsidiary, which was set up in 1998, had been facing problems rising out of the decade-long agitation by Maoist insurgents and had discontinued production of toothpaste at its Hetauda factory, way back in 2005.
Troubled History
India Inc's journey in the Himalayan kingdom has, in fact, been a tortuous one. Surya Nepal, the ITC joint venture, which started operations in Nepal in 1986 and is one of the largest private sector enterprises there, shut down its garments factory in eastern Nepal following prolonged labour unrest last year.
Indian infrastructure giant GMR, which is part of a consortium setting up a 900-MW hydroelectric project in Nepal, also faced an attack at its project site by suspected Maoist militants while the Manipal group's medical campus in Pokhara was hit by a junior doctors' strike, last year.
Indian companies are present in various sectors in Nepal including infrastructure, hospitality, FMCG, electronics and education.
