Doing Business in Nepal

India Nepal Relationship • . Nepal is one of the world's lesser developed countries & has immense potential for development, especially in the natural resource, tourism and hydroelectricity sectors. It relies heavily on foreign aid. ⚫ Nepal is a tiny landlocked country, with a population of 29 million. It i located in South Asia between China in the north and India in the south, east and west. • • • . • As close neighbors, India and Nepal share a unique relationship of friendship and cooperation characterized by open borders and deep- rooted people-to-people contacts. The India-Nepal Treaty of Peace and Friendship of 1950 forms the bedrock of the special relations that exist between India and Nepal. Nepal India is Nepal's largest trading partner and the largest source of foreign investments, besides providing transit for almost the entire third country trade of Nepal. India accounts for over two- third of Nepal's merchandise trade, about one-third of trade in services, 46% of foreign direct investments, almost 100% of petroleum supplies and a significant share of inward remittance on account of pensioners and workers. Government of India provides development assistance in Nepal, focusing on creation of infrastructure at the grass-root level, under which various projects have been implemented in the areas of infrastructure, health, water resources, education and rural and community development. Nepal has a double tax avoidance treaty with limited countries, including India. Doing Business in Nepal PwC May 2019 3

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