Speaking to mediapersons on Wednesday evening for the first time after assuming office in November, Ambassador Rae said Indian investment would help bring down Nepal's trade deficit, which is likely to touch the USD five billion-mark very soon. (Agencies)
He said India was willing to inject more investment in Nepal and several options were being considered to bring investment in the Himalayan nation where peace and stability are expected to be restored following the November 19 Constituent Assembly elections.
"Soon there will be a new government and certainly we will bring new dynamism in bilateral relations," Rae said.
He said the current bilateral trade was not enormous and there was a need to increase it significantly and substantially.
"The IGC (Inter-Governmental Committee) used to work as a traditional regulatory body for bilateral trade and transit issues, but it should now develop a forum to promote bilateral trade," he said.
He expressed concern over the low Foreign Direct Investment (FDI) from India, which is around Rs 40.60 billion at a time when many Indian companies are buying properties and making their fortunes across the globe.
Investment in hydropower projects in Nepal and export to India is one opportunity that Indian companies can take so that the trade deficit will come down significantly, he said.
"There are lots of issues from both sides which need to be discussed. It may be political reasons or may be policy ones or infrastructure," the ambassador said, when asked why there was low FDI from India.
"The Nepal-India Chamber of Commerce and Industry is setting up a small group to look into particularly these investment-related issues," he said.
Investment partnership is the key, he said while proposing the formation of a permanent body to be headed by joint secretaries from both sides to attract Indian investment in Nepal.
The joint secretaries of the commerce ministries of both sides can work together and can brainstorm over attracting Indian business to Nepal, according to the proposal.
He said the existing framework of the IGC should be expanded, private-public partnership should be promoted and private sectors from both countries should provide feedback to the IGC that will help in decision-making and also work out to bring investment in diverse fields.
"We need to develop a mechanism to incorporate the private sector where the government mechanism can address concerns put forth by the private players," he said.
"There were several outstanding issues (that) needed to be resolved," he said, adding that political will and determination should be there to address these concerns.
When asked about the prospect of developing hydropower projects in Nepal and export to India, Ambassador Rae said, "It is important for Nepal to develop hydropower and Nepal should work with India."
"I feel very optimistic and confident that Nepal will move ahead in that direction and for mutual benefit, it is necessary too," he said.
Speaking to mediapersons on Wednesday evening for the first time after assuming office in November, Ambassador Rae said Indian investment would help bring down Nepal's trade deficit, which is likely to touch the USD five billion-mark very soon.