Scrutinizing Nepal’s FDI laws and policies through the lens of commercial law 

Dr Newal Chaudhary's "Commercial Law" offers insights into harnessing FDI to facilitate technology transfer and drive structural transformation within the Nepali economy.

Ram Parwesh Yadav

  • Read Time 4 min.

In the dynamic landscape of global economics, foreign direct investment (FDI) has emerged as a potent catalyst for economic growth, particularly in emerging economies. Yet, the art of attracting productive FDI that aligns with a nation’s strategic priorities remains a formidable challenge. Dr Newal Chaudhary, an esteemed Advocate at Supreme Court of Nepal and Assistant Professor at Nepal Law Campus, Tribhuvan University, has embarked on a groundbreaking journey to scrutinize Nepal’s FDI laws, policies, and procedures through the lens of commercial law. His comprehensive book Commercial Law offers invaluable insights into harnessing FDI to facilitate technology transfer, elevate production capabilities, and drive structural transformation within the Nepali economy. This is the first book on commercial law in the history of Nepal, till now no any Nepali writer has written commercial law book.

Dr. Newal Chaudhary’s journey into the world of Commercial Law is a testament to his dedication and expertise in the field. As an advocate and educator, he brings a wealth of practical experience and academic knowledge to the table. His book not only fills a critical gap in Nepali legal literature but also demonstrates the country’s commitment to fostering a conducive environment for foreign investment.The focus of this groundbreaking work lies in its specialization: foreign direct investment in Nepal. With globalization reshaping the dynamics of international trade and commerce, understanding the nuances of foreign direct investment is more critical than ever. 

Dr Chaudhary’s research-based reference book provides an invaluable resource for legal professionals, policymakers, and scholars seeking to navigate the intricacies of commercial law in the context of Nepal’s evolving economic landscape.What makes this debut book even more remarkable is the author’s dedication to rigorous research. Dr Chaudhary’s work is not merely a compilation of existing laws and regulations; it represents a thorough analysis of the legal framework, case studies, and a forward-looking perspective. 

This research-based approach ensures that the book remains relevant and insightful for years to come, serving as a cornerstone for future legal discussions and developments in Nepal’s commercial law arena. The significance of Dr Newal Chaudhary’s achievement extends beyond the boundaries of the legal community. It’s a testament to the potential and capabilities of Nepali authors and scholars to make their mark on the global stage. As Nepal continues to open its doors to foreign investment and international trade, the insights and knowledge shared in this trailblazing book will be instrumental in shaping the country’s economic trajectory.

Pioneering Analysis of Nepal’s FDI Landscape

Dr Chaudhary’s comprehensive work is divided into seven meticulously crafted chapters, each dissecting various facets of FDI and international investment law.Chapter one serves as an informative gateway, elucidating FDI concepts, types, significance, and associated risks. It expounds upon the research’s objectives, methodology, and theoretical foundations underpinning the study of FDI. Furthermore, it unravels the principles, motives, and evolution of global investment flows, offering an insightful discussion on concepts such as liberalization and privatization and their impacts on FDI.Chapter two takes us on a historical expedition through the annals of international investment law, tracing its development through academic literature. Multilateral agreements forged by prominent international bodies such as the UN, WTO, World Bank, and regional blocs that have shaped global investment norms are meticulously examined. 

Additionally, the book delves into the realm of bilateral investment treaties and explores pivotal agreements like NAFTA. Furthermore, it evaluates Nepal’s evolving legal approach to foreign investment.Chapter three delves deeply into Nepal’s regulatory framework governing FDI, leaving no stone unturned. Constitutional provisions, legislations, policies, plans, and reforms are meticulously scrutinized. Key laws such as the Foreign Investment and Technology Transfer Act (FITTA), Public-Private Partnership (PPP) Act, and Companies Act are analyzed in detail. Statistical trends concerning FDI inflows, sectoral distribution, and the countries of origin are summarized, while dispute resolution mechanisms and significant court cases are reviewed.Chapter four is dedicated to evaluating the delicate balance between investor rights and the public interest. It closely examines state regulatory powers and Nepali laws pertaining to expropriation, compensation, and dispute settlement. 

Moreover, the book explores global standards such as fair and equitable treatment and the most favored nation status. It concludes with suggested measures for investment promotion and screening.Chapter five focuses on the pivotal role of technology transfer and intellectual property rights in driving productivity and growth. It provides a comprehensive analysis of the various modes of technology transfer in both manufacturing and services sectors, coupled with a review of Nepal’s intellectual property laws in light of international conventions.Chapter six ventures into empirical analysis, scrutinizing FDI theories, models, and evidence specific to Nepal. Regulatory gaps and challenges are discerningly identified, and priority sectors are delineated based on competitive advantages and developmental needs.Chapter seven serves as the culmination of this groundbreaking work, summarizing the primary conclusions and offering a comprehensive array of recommendations encompassing legal, institutional, and policy reforms. These reforms are envisaged to create an enabling environment for FDI that fosters sustainable development.

One of the book’s standout features is its meticulous analysis of Nepal’s FDI laws, policies, and institutions. Dr Chaudhary’s comparative approach, evaluating Nepal’s FDI regime relative to regional peers and international best practices, lends objectivity to the assessment. The historical perspective on FDI liberalization in Nepal provides invaluable insights, and the extensive literature review underscores the author’s commitment to rigorous research.

The book adeptly balances investor rights and the public interest, emphasizing the importance of state regulatory powers in pursuing legitimate socio-economic objectives while respecting property rights and the rule of law. This analysis provides valuable insights into recalibrating Nepal’s model investment treaties.

The book’s pragmatic focus on intellectual property laws, technology absorption capacities, and skill-building is forward-looking. It underscores the importance of prioritizing quality over quantity in FDI promotion, with a keen eye on investments that foster positive production linkages, skill diffusion, and productivity growth. Developing specialized skills and research capabilities emerges as a critical policy priority.

The book’s empirical analysis of FDI theories, models, and determinants is rigorously executed, culminating in evidence-based identification of policy gaps, procedural challenges, and institutional limitations. The recommended reforms, ranging from policy enhancements to institutional coordination and human capital development, are both practical and considerate of the unique implementation challenges that Nepal faces.

In conclusion, “The Trailblazing Debut of Commercial Law by a Nepali Author” marks an invaluable contribution to the academic and policy discourse on leveraging FDI for Nepal’s development. It seamlessly marries theoretical rigor with practical insights, catering to a diverse array of stakeholders, including academics, policymakers, investors, and the general public. The extensive research, objective analysis, and pragmatic recommendations showcased within these pages are nothing short of exceptional. This book is an indispensable guide for those seeking to deepen Nepal’s global integration through productive FDI that aligns seamlessly with the nation’s strategic priorities, further cementing Dr. Chaudhary’s status as a trailblazer in the

Ramprawesh Yadav is a BA LLB graduate. Yadav is legal Assistant at Grand Legal services Pvt Ltd. Yadav can be reached at [email protected]