Investment Opportunity
Manufacturing & Industry
Nepal's Special Economic Zones, duty-free access to Indian markets, competitive labour costs, and growing power supply make it a compelling low-cost manufacturing hub between the world's two largest consumer markets.
USD 500M+
Annual Manufacturing Exports
3 SEZs
Operational Special Economic Zones
0%
Customs Duty on SEZ Inputs
30-50%
Labour Cost vs India
Manufacturing Between Two Giant Markets
Nepal sits between India (1.4 billion) and China (1.4 billion). Under SAFTA, goods manufactured in Nepal with 30% Nepali value addition enter India duty-free — making Nepal uniquely positioned as a tariff-advantaged manufacturing base for the Indian market.
The landmark Hongshi-Shivam USD 250M cement plant — Nepal's largest single FDI investment — has demonstrated that large-scale manufacturing is viable and bankable in Nepal. Three operational SEZs with plug-and-play infrastructure accelerate investment timelines.
SEZ Investor Benefits
0% customs duty on raw materials and capital equipment
25% Corporate Income Tax (vs. 25% standard rate, with SEZ rebates)
Exemption from VAT on SEZ-manufactured goods
One-stop service centre for all regulatory approvals
Long-term land lease (up to 50 years + 25-year renewal)
100% profit repatriation guaranteed under FITTA
Own power supply infrastructure within SEZ boundary
Bonded warehouse and customs clearance on-site
SEZs, Industrial Parks & Anchor Investments
Nepal's manufacturing investment landscape spans operational SEZs, new industrial parks, and successful anchor FDI projects setting precedents for sector growth.
Bhairahawa Special Economic Zone (SEZ)
Nepal's flagship SEZ, operational since 2016. Houses 45+ industries in garments, pharmaceuticals, plastics, electronics, and food processing. Adjacent to Bhairahawa Airport and Sunauli border — 4 hours from Delhi. Plug-and-play factory units available.
Investment Scale
USD 300 Million (Phase 1)
Simara Special Economic Zone
SEZ adjacent to Simara Airport in the Terai, with 24/7 power supply, bonded warehouse facilities, and 0% customs duty on raw material imports. Hosts pharmaceutical manufacturers, agro-processors, and light engineering.
Investment Scale
USD 200 Million
Panchkhal SEZ — Kavre
A new SEZ under development east of Kathmandu targeting electronics, IT hardware, and precision manufacturing. Within 1 hour of Kathmandu's engineering talent pool and Tribhuvan International Airport cargo terminal.
Investment Scale
USD 150 Million
Hongshi-Shivam Cement Plant
A joint venture between Chinese investor Hongshi Cement and Nepal's Shivam Group — the largest FDI manufacturing project in Nepal. Annual capacity of 6,000 TPD of clinker. A landmark demonstration of large-scale FDI in Nepali manufacturing.
Investment Scale
USD 250 Million
Lumbini Industrial Park
An industrial park in Lumbini Province targeting consumer goods, packaging, and light manufacturing — leveraging Lumbini's growing tourism economy and proximity to Indian consumer markets.
Investment Scale
USD 180 Million
Garment & Textile Export Zone
Nepal benefits from duty-free access to India under SAFTA and preferential tariffs to the US and EU. Garment manufacturers operating in Nepal can export to Indian brands at zero duty, making Nepal a competitive alternative to Bangladesh for value-added textiles.
Investment Scale
USD 120 Million
Why Manufacture in Nepal
India Market Access at Zero Duty
Nepal-India SAFTA allows manufactured goods to enter India duty-free with 30% Nepali value addition. Access to a 1.4 billion consumer market without Indian import duties.
China Border Connectivity
New road corridors to the Chinese border (Rasuwagadhi, Timure) enable raw material imports from China and finished goods exports to Tibetan markets.
Low Labour Costs
Nepal's minimum wage for unskilled labour is approximately USD 3.50/day — 40–50% of Indian equivalents, with a skilled, young workforce available in manufacturing zones.
Established SEZ Infrastructure
Bhairahawa and Simara SEZs offer built-out factory shells, continuous power, bonded warehouses, and on-site customs — dramatically reducing investor setup timelines.
Power from Hydropower
As Nepal's installed power capacity grows past 3,000 MW and reaches 10,000 MW by 2030, industrial electricity tariffs will become among the most competitive in Asia.
25-Year Tax Holiday Options
Manufacturing industries in Special Industries categories receive 5-year income tax holidays with 50% exemption for the following 3 years. Extended incentives for export-oriented industries.