A

CONSOLIDATED REPORT ON

GLOBAL / COUNTRY STUDY AND REPORT

ON

“NEPAL”  

 

 

 

 

MBA SEMESTER IV

(Bhagwan Mahavir College of Management)

College Code - 704

MBA PROGRAMME  

 

 

June  2013  

 

 

 

 

 

 

 

 

SUMMARY  REPORT  OF  PART-­‐I    

 

 

   

 

 

 

 

 

 

PART: - 1

Introduction of Nepal:

“Mother and Motherland are Greater than Heaven"

 

 

Anthem: "Sayaun Thunga Phool Ka"

Capital (and largest city): Kathmandu

Official language(s): Nepali

Recognised regional languages: Nepal Bhasa, Maithili, Bhojpuri, Tharu, Gurung, Tamang, Magar,

Awadhi, Sherpa, Kiranti, Limbu and other 103 different indigenous languages.

Government: Federal republic

President: Ram Baran Yadav

Prime Minister: Baburam Bhattarai (Maoist)

Chief Justice: Khil Raj Regmi

Area: Total 147,181 km2 (95th) stretching 800km from east to west & from 90 to 230km north to

south.

Currency: Nepalese rupee (NPR)

Time zone: NPT (UTC+5:45)

 

 

PESTEL of Nepal:

Political/legal Analysis: Provisions of umbrella legislation on the environment

In September 1996, Parliament passed the Environment Protection Bill, 1996, the long-awaited

umbrella legislation on the environment. The Ministry of Population and Environment is

currently involved in preparing the regulations necessary for the implementation of the new Act.

Concurrently, a unified Consumer Protection Bill has been tabled in Parliament.

Notwithstanding the lack, until recently, of specially designed and unified legal instruments to

comprehensively address environmental and consumer protection issues, there are some 69

different Acts which directly or indirectly provide the basis for regulating and enforcing various

environmental protection measures, and for safeguarding the interest of general consumers.

Each of the Acts is supplemented by corresponding regulations.

Needed comprehensive rules and regulations

Since a comprehensive legislation, in the form of the Environment Protection Act, 1997, already

exists, its immediate and effective implementation needs equally comprehensive rules and

regulations which specify in clear terms the authority, responsibility and jurisdiction of the

various government agencies, local bodies, private sector and NGOs.

Market oriented policy

Most or even all of the existing laws and regulations are heavily orientated towards "command

and control" measures with provisions for various penalties and punishments. In view of the

present liberal, market-oriented policy of the government, it would also be advisable to

introduce economic instruments and market mechanisms for compliance with environmental

measures. Taking into consideration the economic growth and environmental situation of the

country, it will be worthwhile exploring some possible policy options and incentive measures.

International Trade Regulation Trade Policy 1992

To enhance the contributions of trade sector to national economy by promoting internal and

international trade with the increased participation of private sector through the creation of an

open and liberal atmosphere.

 

 

To diversify trade by identifying, developing and producing new exportable products through

the promotion of backward linkages for making export trade competitive and sustainable.

To expand trade on a sustained basis through gradual reduction in trade imbalances.

To co-ordinate trade with other sectors by expanding employment-oriented trade.

Economic Analysis

Nepal figures among world's poorest counties. There are various factors that have contributed to

the economic backwardness of Nepal. Its topography, lack of resource endowment, land locked

position, lack of institutions for modernization, weak infrastructure, and lack of policies

conductive to development are some of the factors that have hindered the Nepalese economy.

GDP real growth rate of Nepal than it increased 4.9(2009) to 4.6(2010).

Nepal relies heavily on its neighbors India and China for its trade, especially on India. Nepal's

economy has been subject to fluctuations resulting from changes in its relationship with India as

a result of its geographical position and the scarcity of natural resources.

Agriculture is the mainstay of the economy, providing a livelihood for three-fourths of the

population and accounting for 38% of GDP. Industrial activity mainly involves the processing

of agricultural products including jute, sugarcane, tobacco, and grain.

Nepal has considerable scope for exploiting its potential in hydropower and tourism, areas of

recent foreign investment interest. Prospects for foreign trade or investment in other sectors will

remain poor, however, because of the small size of the economy, its technological

backwardness, its remoteness, its landlocked geographic location, its civil strife, and its

susceptibility to natural disaster.

Social Environment:   The geographical distribution of religious groups revealed a preponderance of Hindus,

accounting for at least 80,6 percent of the population in every region. The largest consentration

of Buddhists were found in the eastern hills, the Kathmandu Valley, and the central Tarai; in

each area about 10 percent of the people were Buddhist.

  Buddhism was relatively more common among the Newar and Tibeto-Nepalese groups. Among

the Tibeto-Nepalese, those most influenced by Hinduism were the Magar, Sunwar, and Rai 11

peoples. Hindu influence was less prominent among the Gurung, Limbu, Bhote, and Thakali

groups.

 

 

Technological Factor:

  In Nepal technological development has been considered important in achieving higher

standards of living and in determining international competitiveness. Technological factors

include R&D activity, automation, technological development, technology incentives, PC

ownership (% of population), number of internet users, tv, radio, telephones and mobile

telephones, new media and new technologies.

There is less than one telephone per 19 people. Landline telephone services are not adequate

nationwide but are concentrated in cities and district headquarters. Mobile telephony is in a

reasonable state in most parts of the country with increased accessibility and affordability.

There were around 175.000 internet connections in 2005. After the imposition of the "state of

emergency", intermittent losses of service-signals were reported, but uninterrupted Internet

connections have resumed after Nepal's second major people's revolution to overthrow the

King's absolute power.

An Information Technology (IT) Park is under development at Kavre along the Banepa–

Panauti highway. The High Level Commission for Information Technology (HLCIT), which

oversees the development of the Park, is of the belief that it will serve as a platform for the

development of the IT sector in the country.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY  REPORT  OF  PART-­‐II  

 

 

 

 

 

 

 Industry  :-­‐  Education  Industry  

Second Part of Report is been related with Introduction of Education Industry in India as well as

Nepal. Modern education in Nepal began with the establishment of the first school in 1853; this

school was only for the members of the ruling families and their courtiers. Schooling for the general

people began only after 1951 when a popular movement ended the autocratic Rana family regime

and initiated a democratic system. The Ministry of Education is the apex body responsible for

initiating and managing education activities in the country. The Minister of Education, assisted by

the State/Assistant Minister, provides political leadership to the Ministry. The Ministry, as a part of

the government bureaucracy, is headed by the Secretary of Education and consists of the central

office, various functional offices, and offices located at the regional and district levels.

Education in Nepal is structured as school education and higher education. School education

includes primary level of grades 1–5, lower secondary and secondary levels of grades 6–8 and 9–10

respectively. Pre-primary level of education is available in some areas. Six years old is the

prescribed age for admission into grade one. A national level School Leaving Certificate (SLC)

examination is conducted at the end of grade 10. Grades 11 and 12 are considered as higher

secondary level. Higher Secondary Education Board (HSEB) supervises higher secondary schools

which are mostly under private management. Previously these grades were under the university

system and were run as proficiency certificate level. Though some universities still offer these

programs, the policy now is to integrate these grades into the school system.

Education in India is provided by the public sector as well as the private sector, with control and

funding coming from three levels: central,state, and local. Takshasila was the earliest recorded

centre of higher learning in India from at least 5th century BCE and it is debatable whether it could

be regarded a university or not. The Nalanda University was the oldest university-system of

education in the world in the modern sense of university. Western education became ingrained into

Indian society with the establishment of the British Raj.

India's education system is divided into different levels such as pre-primary level, primary level,

elementary education, secondary education, undergraduate level and postgraduate level.

The National Council of Educational Research and Training (NCERT) is the apex body for

curriculum related matters for school education in India. The NCERT provides support and technical

assistance to a number of schools in India and oversees many aspects of enforcement of education

policies.

 

 

The central and most state boards uniformly follows the "10+2+3" pattern of education. In this

pattern, 10 years of primary and secondary education is followed by 2 years of higher secondary

(usually in schools having the higher secondary facility, or in colleges), and then 3 years of college

education for bachelor's degree. The 10 years is further divided into 5 years of primary education

and 3 years of upper primary, followed by 2 years of high school. This pattern originated from the

recommendation the Education Commission of 1964–66.

The number of graduates coming out of technical colleges increased to over 700,000 in 2011 from

550,000 in FY 2010. However, 75% of technical graduates and more than 85% of general graduates

are unemployable by India's high-growth global industries, including information technology.

From the first Five Year Plan onwards India's emphasis was to develop a pool of scientifically

inclined manpower. India's National Policy on Education (NPE) provisioned for an apex body for

regulation and development of higher technical education, which came into being as the All India

Council for Technical Education (AICTE) in 1987 through an act of the Indian parliament. At the

Central(federal) level, the Indian Institutes of Technology,the Indian Institute of Space Science and

Technology, the National Institutes of Technologyand the Indian Institutes of Information

Technology, Rajiv Gandhi Institute of Petroleum Technology are deemed of national importance.

Modern education in Nepal began with the establishment of the first school in 1853; this school was

only for the members of the ruling families and their courtiers. Schooling for the general people

began only after 1951 when a popular movement ended the autocratic Rana family regime and

initiated a democratic system. Since then, there has been a dramatic expansion of education facilities

in the country. As a result, adult literacy (age 15+) of the country was reported to be 60.3% (female:

46.3%, male: 73%) in a 2010 population census,[1] up from about 5% in 1952–54. Beginning from

about 300 schools and two colleges with about 10,000 students in 1951, there now are 49,000

schools (including higher secondary), 415 colleges, five universities, and two academies of higher

studies. Altogether 7.2 million students are enrolled in those schools and colleges who are served by

more than 222,000 teachers.

The essence of Human Resource Development is education, which plays a significant and remedial

role in balancing the socio-economic fabric of the Country. Since citizens of India are its most

valuable resource, our billion-strong nation needs the nurture and care in the form of basic education

to achieve a better quality of life. The UGC has the unique distinction of being the only grant-giving

agency in the country which has been vested with two responsibilities: that of providing funds and

that of coordination, determination and maintenance of standards in institutions of higher education.

 

 

The All India Council for Technical Education (AICTE) is the statutory body and a national-level

council for technical education, under Department of Higher Education, Ministry of Human

Resource Development. Established in November 1945 first as an advisory body and later on in

1987 given statutory status by an Act of Parliament, AICTE is responsible for proper planning and

coordinated development of the technical education and management education system in India. The

AICTE accredits postgraduate and graduate programs under specific categories at Indian institutions

as per its charter.

NCED is an apex body for teacher training in Nepal. There are 34 Educational Training Centers

(ETCs) under NCED to support the teachers in pedagogical areas. ETC Sunsari, ETC Dhulikhel and

ETC Tanahun/Educational Training Center Damauli are the leading training centers under NCED.

NCED was established in B. S. 2050 but it could not take speed much until ArjunBahadurBhandari

was appointed as an Executive Director. Now it is running full-fledged and implementing "Teacher

Education Project" to train the pre-service and in-service teachers throughout the country.

Present trade position is so dynamic in Nepal. Iron and steel products, yarns, woollen carpets,

readymade garments, lentils and textiles, in that order, topped the list of exports from Nepal in the

first 10 months of the fiscal year.

According to the Trade and Export Promotion Centre (TEPC), the country exported iron and steel

products worth Rs 8.54 billion, yarns Rs 4.64 billion, woollen carpets Rs 3.93 billion, readymade

garments Rs 3.26 billion, lentils Rs 3.19 billion and textiles Rs 3.06 billion.

The export of yarns, woollen carpets, lentils and readymade garments registered a double-digit

growth during the review period compared to the same period last year. Exports of iron and steel

products rose 1.2 percent while textile exports plunged more than 11 percent.

Udaya Raj Pandey, president of the Garment Association Nepal (GAN), said the export performance

was not satisfactory compared to past years. “The country’s manufacturing sector is still suffering

from a shortage of workers and security problems,” he added.

The countrsy’s total exports amounted to Rs 52.11 billion during the review period, up 4.8 percent

from last year. While exports increased marginally, imports jumped 9.8 percent to Rs 313.87 billion,

leading to a 10.9 percent increase in the trade deficit, according to the TEPC.

Among imports, petroleum products registered the largest increase followed by iron and steel

products. Nepal imported Rs 57.09 billion worth of oil and Rs 36.02 billion worth of iron and steel

products.

 

 

Nepal and India have a history of age-old relations in trade and commerce. India is Nepal's largest

trade partner and source of foreign investment. Total bilateral trade has reached US $3.21 billion

(NRS 257.10 billion) during Nepalese fiscal year 2009-10. During that year, Nepal’s imports from

India amounted US $2.71 billion (NPR 217.11 billion), and exports to India remained about US

$0.50 billion (NPR 39.99 billion).

The bilateral mechanism for trade and transit is provided by the India-Nepal Treaties of Trade, of

Transit, and Agreement for Co-operation to Control Unauthorised Trade, 1991. The Trade Treaty

valid for seven years was signed on November 27, 2009, and will be automatically renewed for

another seven years. Under the Treaty of Trade, India provides, on a non-reciprocal basis, duty free

access into the Indian market for all Nepalese-manufactured articles barring a short negative list

(cigarettes, alcohol and cosmetics), subject to the conditions, since March 2002, that the exports

meet the domestic value addition requirement of 30% and change in HS classification at the four-

digit level in the course of manufacture or processing in Nepal. After the March 2002 revision,

annual quotas have been prescribed for duty-free exports to India for four sensitive items - vegetable

fats (100,000 tonnes) acrylic yarn (10,000 tonnes), copper products(10,000 tonnes) and zinc oxide

(2,500 tonnes).

The India-Nepal Treaty of Transit, renewed every seven years, provides for port facilities to Nepal at

Kolkata and specifies 15 transit routes between Kolkata and the India-Nepal border. As requested by

the Nepalese side, a separate Customs Cell at Haldia has become operational from 16 August 2004.

For bilateral trade, 22 entry/exit points are provided along the Indo- Nepal border. The Transit

Treaty was last renewed in March 2006. The Agreement for Cooperation between India and Nepal

to Control Unauthorised Trade was automatically renewed for five years in March 2007.

Imports in Nepal increased to 42093.90 Million NPR in June of 2012 from 36555.50 Million NPR in

May of 2012. Imports in Nepal is reported by the Nepal Rastra Bank. Historically, from 2001 until

2012, Nepal Imports averaged 19906.9 Million NPR reaching an all time high of 44602.0 Million

NPR in March of 2012 and a record low of 8000.3 Million NPR in October of 2001.

Nepal mainly imports oil, gold, iron and steel, clothes, pharmaceutical products, cement, electronic

appliances, food and vehicles. Nepal’s main imports partner is India (accounting for 58 percent of all

imports). Others include China, Indonesia, Argentina, South Korea, Malaysia, Japan and Germany. .

This page includes a chart with historical data for Imports in Nepal.

 

 

In exercise of the powers conferred under Section 5 of the Foreign Trade (Development and

Regulation Act), 1992 (No. x22 of 1992), the Central Government hereby notifies the Export and

Import Policy for the period 2002-2007. This Policy shall come into force with effect from 1st April,

2002 and shall remain in force upto 31st March, 2007 and will be co-terminus with the Tenth Five

Year Plan (2002-2007). However, the Central Government reserves the right in public interest to

make any amendments to this Policy in exercise of the powers conferred by Section-5 of the Act.

Nepal lies on the southern slopes of the Himalayas between two of the world’s fastest growing

economies – India in the south and China in the north. India has been maintaining a sustainable

economic growth rate of 9 percent, whereas China’s economic growth rate is still higher. With a

growth rate of merely 3.4 percent, Nepal so far missed the chance to bring into line its own

development with the economic dynamic of its huge Neighbors. This is all the more astonishing for

the reason that Nepal offers many possibilities for closer economic combination with the huge

Indian and Chinese markets on its footstep, such as a big potential to produce hydropower, favorable

laws regarding investment including FDI, diverse ecological belts appropriate for different

agricultural activities, an attractive tourism sector, and not least it’s very place as a potential transit

economy between India and China. But up to now, Nepal has been overwhelmed by weak

governance, inadequate infrastructure, power shortage, labour militancy, an expanding trade deficit,

and a poor tourism policy. The core problem of Nepal’s development perspective is an institutional

bottleneck. With a politically weak government and a politically separated society, the speed of

economic development will continue below its possible. To overcome this bottleneck and to start a

catching up process with India and China, a politically loyal government should give confidence

private trade and capital flows mainly with China and India, and otherwise focus on macroeconomic

constancy and the provision of public goods, such as the development of infrastructural services and

higher investment in health and education services.

India is the seventh largest country in the world in terms of its land mass, number ten in the world

for the size of its economy by GDP, and the fourth largest international economy in purchasing

power equivalence. This means that in Indian Import market has a huge potential. This potential

provides huge opportunities for global suppliers / exporters as well as Indian buyers / importers.

ndia's total external trade (both export and import) in the year 2008-09 has increased to Rs.20,72,438

crore. from Rs.91,893 crore in 1990-91. India’s economy has grown by about 7.5% yearly since

2000, and that rate is predicted to increase. In 2008-09 total indian imports was Rs.13,05,503.

Export and Import Data gives a broader insight into the current state of business as well as future

prospects. Today, companies import and export all sorts of goods and services like Agriculture,

 

 

Apparel & Fashion, Automobile, Business Services, Food & Beverage, Jewelry & Gemstones,

Minerals & Metals, Textiles and Leather Products etc.

India has always been in the limelight in terms of the business opportunities available. The India

business opportunity is huge in possibly every sector - financial services, telecom, IT, automobiles,

media, real estate and alike. India is still considered to be one of the most enviable destinations for

doing business. Presently it is counted among those nations which has been least affected by the

global recession – thus it clearly proves that India’s business potential is huge. India's extensive

band of engineers, scientists, technicians, managers and skilled manpower are among the best in the

world.

One who wishes to explore the business opportunity in India wouldn’t only look at the theoretical

aspect of exploring the potential but also try to excavate the potential in the right manner. The Indian

business market is large and bubbling with newer opportunities. Increased purchasing power and

consumerism is what drives the business scenario in India. Thus, there is an opportunity for

competitive advantage (low cost sourcing of products and services). It has been observed that

investments in India have been capable of yielding lucrative returns and thus companies have started

to capture the domestic market business opportunities. The large talent pool of India also offers

extensive opportunities to the Multi National corporations (MNCs).

The India business opportunity is getting quite exciting and innovative with the passing of every

year. People are infusing new opportunities such that international investments might flow into the

country. There are a lot of business ideas for entrepreneurs who are interested to set up business in

India through Internet ventures, outsourcing technology, e-commerce opportunities, and software

development opportunities. India has a huge market with the middle class group driving the

consumerism. This is indeed a good base for the overall business development of India. The vast

reservoir of knowledge workers should be optimized in a manner that it attracts global companies

for doing business in India. All the factors that have helped create the India business opportunity,

surely assures a promising future.

Industry Name:FMCG Industry

Company Name:Hindustan Lever Limited

INTRODUCTION TO INDUSTRY

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are

products that are sold quickly and at relatively low cost. Examples include non-

 

 

durable goods such as soft drinks, toiletries, and grocery items. Though the

absolute profit made on FMCG products is relatively small, they are generally sold

in large quantities, and so the cumulative profit on such products can be

substantial.

Global leaders in the FMCG segment are Anheuser-Busch InBev, Nestlé, ITC,

Hindustan Unilever Limited, Reckitt Benckiser, Unilever, Procter & Gamble,

L'Oréal, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi, Gillette etc.

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever

Limited, is INDIAs largest consumer products company and was formed in 1933

as Lever Brothers India Limited.HUL is the market leader in Indian products such

as tea, soaps, detergents, as its products have become daily household name in

India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan

Unilever Limited. Unilever’s strength is its brands. Sunlight is unilever’s biggest

selling brand. Unilever operates in nine product categories- laundry, savory and

dressing, skincare and cleansing, margarine, deodorants, household care, tea,

Hair care and ice-cream- and is the market leader in seven of these categories.

HUL will develop new ways of doing business with the aim of doubling the size of

their company while reducing their environmental impact. In 2010, HUL launched

the Unilever Sustainable Living Plan – co’s vision for growing Unilever sustainably.

As part of this plan, co. committed to three significant outcomes by 2020: To help

more than a billion people take action to improve their health and well-being. HUL

will decouple its growth from its environmental impact, achieving absolute

reductions across the product lifecycle. Co’s goal is to halve the environmental

footprint of the making and use of its products. HUL perform very well in FMCG

industry. Its growth is increases by 57.7% during last 5 years. HUL covers market

soaps & detergent 19.3%, personal product 12.3%, ice-cream 15.7%, processed

food 13.7%, beverage 13.6% of total FMCG industries HUL have 80% sales growth

during last two years. HUL is the leader of the market with maximum market

capitalization and maximum sales turnover. The Net Profit stood at whooping

2500 crore approximately. HUL fails to become market leader of tooth pest and

ketch up product. Its is not able to beat the competitors of both the products.HUL

has developed into a viable and competitive sources base for unilever world wide

in home and personal care and food and beverages category of products.HUL is

 

 

also a global marketing arm for select licensed unilever brands and also works on

building categories with core country advantages such as branded basmati rice.

Goods imported from india into Nepal are granted a rebate in the chargeable

advalorem (except specific) rate of customs duty by 5% ad-volorem duty in above

than 30/% custom duty and 7% below than 30% Excise taxes are applied mainly

to goods deemed hazardous to health, such as alcoholic beverages, cigarettes and

soft drinks. In January 2002, a new excise act went into effect that raised rates

slightly as part of the governments effort to pay for increased security

expenditures since 2001.

Industry :- Pharmaceutical Sector

Nepalese pharmaceutical market is established at Rs 8649 million & is growing at a compounded

annually growth rate of 10 percentage. The market is highly import driven (70%) with the highest

per capital of brands. Imports from India make for highest share of total imports. Off late, the

domestic manufacturers have made their presence felt in the market with sizable presence in the top

4 therapeutic segments namely anti-invectives, respiratory, vitamins, gastro intestinal and pain

segments. The domestic players import all the raw materials needed for production of formulations.

The major issues and challenges of the domestic pharmaceutical identified are high dependence on

imports, low tariff barrier for imports, high growth of the brands, and high cost of production, poor

healthcare infrastructure, and security concerns inhabiting the rural drug consumption.

The strengths, the industry processes are suitable production facilities, good quality product, well

qualified and experiences HR, knowledge of market, and high level of private participants. Similarly

the weaknesses it has are poor capacity utilization, poor financial return hampering investments for

future development growth, lack of highly skilled technical personnel, and low level of

institutionalization, poor supply chain management, ineffective business linkages and others.

The Nepalese pharmaceutical industries have good business outlook due to favourable government

policies, existing and potential, market both domestic and export, new opening due to provisions of

SAFTA and WTO/TRIPS, growth in health institutions and health awareness, and others. The major

threats identified are emergence of competition, absence of institutions for support and facilitation

for quality assurance and R&D, restriction to produce generic versions of patented products, poor

implementation of policies and regulations, etc. The critical core success factors for pharmaceutical

industries are noticed to be marketing, product quality, product PF, demand fulfilling capability,

economy of scale, and R&D.

 

 

Most of the Nepali companies have limitations in terms of technical capability and innovation. On

the other hand, foreign companies including multinational ventures have access to latest

technologies and are engaged in import of medicines. However, there is no technical collaboration

between the multinational ventures and Nepali companies. Industrialists too agree that Nepali

pharmaceutical companies should conduct varieties of research and fulfill the demand of high tech

medicines in Nepal. They blame the government for not supporting them adequately as R&D

requires high investment, manpower and technology.

The varied functions such as contract research and manufacturing, clinical research, research and

development pertaining to vaccines are the strengths of the Pharma Industry in India. Multinational

pharmaceutical corporations outsource these activities and help the growth of the sector. The Indian

Pharmaceutical Industry has a bright future.

Market Segment, As indicated in the section on the traditional model, the marketing strategies

developed by pharmaceutical companies have been developed to deal with the complexities of the

approval process and pricing negotiations with government agencies and private insurers. Revenue

Model, to date biopharmaceuticals have had only a modest impact on the pharmaceutical company

blockbuster revenue model. Value chain and value network, the impact of biotechnology on the

pharmaceutical business model has been perhaps the greatest through its effect on the value chain

and value network. The costs of developing biopharmaceuticals are about the same as for traditional

pharmaceuticals. After various adjustments, DiMasi and Grabowski (2007) estimate that the cost is

just 6% lower.

Comparison position of both the country includes the background of the country, technology aspect,

political aspect, government, telecommunication, transportation and transitional issues between two

countries.

Exports to India goes up by 8.4 percent during the review year in contrast to a drop by 2.5 % in the

previous year. Exports to other countries rise by 1.8 percent in contrast to a fall by 22 % in a year

ago.The increase in the exports to India due to the increase in the exports of zinc pieces, jute

products, juice /beverages, cardamom and thread. Exports to new countries increased due to an

increase in the export of tanned skin, woolen carpet, pashmina, and tea, among others.

Nepal relations with neighboring countries and in particular with India are significant for trade

policy as the majority of import and export merchandises must be transited through India for its

access to sea. A agreement of trade between Nepal and India was signed in 1991 and renewed every

five years.

 

 

Import Approval There is no formal approval required for Import in Nepal. The agreement of trade

and transit between Nepal and India governs imports from India. Imports from overseas of all

products are free except following products banned for import.

Products injurious to health: (Narcotic drugs like opium and morphine, Liquor containing

above 60 % alcohol).

Beef and beef products.

Custom and excise duty, Customs duty on imported goods is assessed on the basis of their

transaction price declared by the owner of the goods as per amendments to the Customs Act, 1962,

in July 1997.Nepal, under bilateral trade agreements with India, has in past been afforded duty-

free/preferential entry. However, the most recent India-Nepal agreement of Trade which is signed in

March 2002, while it continues to allow Nepali manufactures to enter the India market on a non-

reciprocal, preferential basis, with rules of origin less restrict the international rules. Nepal‘s

manufacturer can have equal to 70% foreign content instead of an international norm of less than

50%. Import of following Nepalese manufactured articles will be permitted in India for free of

Customs duty on a fixed quota basis.

India and Nepal signed a revised Double Taxation Avoidance Agreement , with the goal of

encouraging Indian investment in Nepal, and easing procedures for stakeholders with commercial

interests in both countries. The agreement will replace the agreement on double taxation avoidance

signed in 1987.

Right of Nepal recognized by The agreement of Trade and Commerce of 1950, to import and export

commodities through Indian Territory and ports without customs levies. However, security concerns

about Nepal‘s relationship with China in 1989 led in India to freeze trade relations with Nepal for 15

months, which badly affected to the Nepalese economy. After re-establishment of trading relations

with India, the India-Nepal Agreement of Cooperation 32 was established in 1991with the aim to

ensure the free transfer of labor ,capital, and payments between the two countries. The India-Nepal

agreement which was executed under this Agreement been renewed every 5 years.

India imports and exports goods on a grand scale, and that trend is growing every year as their

population and level of technological sophistication increases. Every country engages in the

importation of products that they need and want from other nations and they in turn export the

products and raw materials that they have in very large quantity for financial gain. The main things

that India imports are cereal grains, edible (food quality) oils, and petroleum-based products. Aside

from these, India has a hunger for goods such as home and commercial electronics, computer

hardware and software, chemicals, industrial machinery, and valuable metals and stone.

 

 

Indian Pharmaceutical companies are doing too well in the Global Pharmaceutical Market especially

in generic segment. There are very few reasons why Nepali companies cannot tap that market. Also,

many global giants are focusing more on brand management and marketing outsourcing the

production. Nepal, a country between India and China is an ideal production base for multinational

targeting these two countries.

Sector/Industry:-­‐Fast  Moving  Consumer  Goods  Company  Name:-­‐  Hindustan  Unilever(HUL)  

 

INTRODUCTION TO SECTOR

The secondary sector of the economy or industrial sector includes those economic

sectors that create a finished, tangible product: production and construction. This sector

generally takes the output of the primary sector and manufactures finished goods. These

products are then either exported or sold to domestic consumers and to places where they

are suitable for use by other businesses. This sector is often divided into light

industry and heavy industry. Many of these industries consume large quantities of energy

and require factories and machinery to convert the raw materials into goods and products.

They also produce waste materials and waste heat that may pose environmental problems

or cause pollution.

INTRODUCTION TO INDUSTRY

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are

products that are sold quickly and at relatively low cost. Examples include non-durable

goods such as soft drinks, toiletries, and grocery items. Though the absolute profit made on

FMCG products is relatively small, they are generally sold in large quantities, and so the

cumulative profit on such products can be substantial.

Global leaders in the FMCG segment are Anheuser-Busch InBev, Nestlé, ITC, Hindustan

Unilever Limited, Reckitt Benckiser, Unilever, Procter & Gamble, L'Oréal, Coca-Cola,

Carlsberg, Kleenex, General Mills, Pepsi, Gillette etc.

 

 

INTRODUCTION OF COMPANY

Hindustan Unilever Limited (HUL) is India's largest consumer goods company based

in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls

52% majority stake in HUL. Its products include foods, beverages, cleaning

agents and personal care products.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as

Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg.

Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has employee

strength of over 16,500 employees and contributes to indirect employment of over 65,000

people. The company was renamed in June 2007 as “Hindustan Unilever Limited”.

Lever Brothers started its actual operations in India in the summer of 1888, when crates full

of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were

shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving

Consumer Goods (FMCG).

Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and

its products are available in over 6.4 million outlets in the country. As per Nielsen market

research data, two out of three Indians use HUL products.

Unilever Nepal Ltd. Is branch of Hindustan Lever Ltd. Company was starting production of detergent powder in 1994 & from 1995 staring the production of toilet soap & from 1996 started production of close up tooth paste. Know these day our company producing Soap, Tooth Paste, Detergent, Hair care, skin care.

Role of Unilever in Nepal

Unilever aims to meet the everyday needs of Nepali household everywhere, to anticipate

the aspiration of consumers and to respond creatively and competitively with branded

products and services to raise their quality of life. Unilever deep roots in local cultures and

markets around the world are our parallel inheritance and the foundation of our future

growth. It has been creating international expertise to the service of local consumers - a

truly multi-local multinational.

STRUCTURE OF HUL

 

 

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG)

Company. It is present in Home & Personal Care and Foods & Beverages categories.

HUL has over 16,500 employees, including over 1500 managers

3.1 PRESENT POSITION OF HUL

Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited, is

INDIAs largest consumer products company and was formed in 1933 as Lever Brothers

India Limited.

Business Segments

POLICIES AND NORMS OF SELECTED COUNTRY FOR SELECTED INDUSTRY

• To up-date and review food legislation in Nepal taking into consideration the SPS

and environment–related aspects and preventative compliance to improve food

safety management;

• To build capacity in human capital, infrastructure and laboratories to take up the

emerging challenges being presented in food trade;

• To implement a risk-based approach to manage microbiological safety, food

contaminants and emerging risks, such as BSE, bird flu, dioxins and PCBs;

• To institutionalise a multidisciplinary approach to address the multi-faceted nature of

food safety assurance throughout the entire food chain;

 

 

• To implement GAP, GMP, GHP and HACCP for producers, processors, and

distributors to enhance food safety and minimise the risks of food hazards and

contamination;

• To build the technical and financial capacity in SMEs to undertake pesticide residue

analysis and obtain appropriate certification and labeling to ensure exports are not

rejected at the border.

Trade relation between India and Nepal

The effective use of foreign exchange, economic needs of the country, and industrial as well as

consumers requirements are three basic factors which influence India‘s import policy. Nepal

relations with neighbouring countries and in particular with India are significant for trade policy as

the majority of import and export merchandises must be transited through India for its access to

sea. A treaty of trade between Nepal and India was signed in 1991 and renewed every five years.

Import Approval

There is no formal approval required for Import in Nepal. The treaty of trade and transit between

Nepal and India governs imports from India. Imports from overseas of all products are free except

following products banned for import.

• Products injurious to health: (Narcotic drugs like opium and morphine, Liquor

containing above 60 % alcohol)

• Beef and beef products.

Following are the Articles Which Will Not Be Allowed preferential Entry from Nepal to India.

• Alcoholic Liquors and Alcoholic Beverages and their concentrate except industrial

spirits, cosmetics and Perfumes with non-Nepalese or non-Indian Brand names,

Cigarettes and Tobacco

Only Nepalese beers can be imported into India on payment of the relevant liquor excise

duty equal to the effective excise duty as levied in India on Indian beers under the relevant

rules and regulations of India.

India and Nepal signed a revised Double Taxation Avoidance Agreement, with the goal of

encouraging Indian investment in Nepal, and easing procedures for stakeholders with

commercial interests in both countries. The treaty will replace the agreement on double

taxation avoidance signed in 1987.

The revised DTAA will provide tax stability to the residents of India and Nepal and facilitate

mutual economic cooperation as well as stimulate the flow of technology, services, and

 

 

investment between India and Nepal. Since tax rates were less in Nepal, investor who had

paid tax in India would not have to pay again in Nepal and those who paid taxes in Nepal

would only have to pay the differential amount back in India.

PRESENT TRADE BARRIERS FOR EXPORT OF GOODS

Trade barriers are government-induced restrictions on foreign trade.

The restrictions can take many forms, which are as follow:

Tariffs Non-tariff barriers to trade

Import licenses, and quotas Export licenses

Currency devaluation Subsidies

Voluntary Export Restraints Local content requirements

Right of Nepal recognized by The Treaty of Trade and Commerce of 1950, to import and

export commodities through Indian Territory and ports without customs levies. However,

security concerns about Nepal‘s relationship with China in 1989 led in India to freeze trade

relations with Nepal for 15 months, which badly affected to the Nepalese economy. After

restoration of trading relations with India, the India-Nepal Agreement of Cooperation 32

was established in 1991with the aim to ensure the free transfer of labour, capital, and

payments between the two countries. The India-Nepal Treaty which was executed under

this Agreement been renewed every 5 years

Future plans

• The Novella partnership is committed to bringing this project to scale. As

HarrieHendrickx of Unilever says, “We will bring the volumes to a level where

economies of scale reduce cost and make the whole project economically

sustainable. Then, with a new raw material established, hundreds of thousands of

farmers in Africa can earn a decent living from it.”

• Moving forward will require attracting skilled people who can guide the process, as

well as the funding to finance tree production and training for farmers on how to

integrate AB into their current farm activities.

 

 

• Two primary hurdles still exist: demand for AB nuts must grow and the quality of AB

oil must improve even further. Progress has been made on the demand side as

Unilever has found a second guaranteed purchaser for AB oil. Having more than

one buyer for the oil reduces farmers’ dependence on a single major buyer.

• In Nepal, Unilever has partnered with local organizations to establish a locally-

owned supply chain for Allan blackia oil, a new raw material to be used in

margarines and spreads. Called Project Novella, the initiative is increasing income

for farmers who cultivate AB trees, generating jobs in the AB supply chain, and

preserving the biodiversity of the region.

• While the project is successful, a growing supply chain will have to be established

and made sustainable by the end Next Steps of the DfID grant term.

• Local ownership, active capacity-building of the farmers, investment in research

capabilities, and improvement of business practices are some of the factors that are

expected to contribute to the supply chain’s sustainability and viability.

• Export of Nepali Forest Product to China, India, and rest of the world. Bhutan has

made good progress in exporting forest products like paper and furniture to two of

our huge neighbors. Nepal with vast forest and variety of vegetation can tap this

opportunity and can export forest products to India and China.

• Sri Lanka has done much in the field of Ayurveda and now Kerala is to follow it.

Nepal has the cold climate and the herbs. It is the market awaiting investment.

There is huge opportunity in forms of Healthcare services. Nepal can provide to the

world at much more competitive price than Philippines or India.

INDUSTRY:-­‐  NEPAL  TOURISM  INDUSTRY  

Introduction of the Tourism in Nepal and its role in the economy of

Nepal

Tourism is one of the largest industries in Nepal, and the largest source of foreign exchange and

revenue. The huge number of Hindu and Buddhist heritage of Nepal, and its cold weather are the

strong attractions. Possessing 8 of the 10 highest mountains in the world, Nepal is a hotspot

destination for mountaineers, rock climbers and people seeking adventures.

Statistics

In 2011, the number of international tourists visiting Nepal was 626,705, which was an increase of

32.2% compared to the previous year. In 2012, the number of tourists decreased by 5% to 590,277.

 

 

In 2012, 55.9% of the foreign visitors came from Asia (18.2% from India), while Western

Europeans accounted for 27.5%, 7.6% were from North America, 3.2% from Australia and the

Pacific Region, 2.6% from Eastern Europe, 1.5% from Central and South America, 0.3% from

Africa and 1.4% from other countries.

The direct contribution of Travel &Tourism to GDP is 2.8% of total GDP in 2011, rising to 4.8%

2012. Travel & Tourism is expected to support directly 293,000 jobs (2.4% of total employment) in

2012.

Travel & Tourism investment is estimated at NPR11.2bn or 3.9% of total investment in 2012.

Nepal Tourism Year 2011

After successful example of Visit Nepal Year 1998, the government of Nepal has decided to lunch a

national tourism campaign as “Nepal Tourism Year 2011” in consultation with private sector,

tourism entrepreneur and media partners. This mega campaign has initiated as a common goal of all

concern sector to take Nepal’s tourism potentiality in to the new height.

Keeping in vision to taking Nepal’s profuse tourism opportunity in to the new height, Nepal

Tourism Year 2011 campaign focused not only for already existed international market but also to

generate domestic tourism culture.

Nepal Tourism Board

Nepal Tourism Board (NTB) is National Tourism Organization of Nepal. The main objective of

NTB is to establish Nepal as a premiere holiday destination in international arena with definite brand

image. NTB is leading Nepal's participation in WTM 2008 with 254 Nepalese tourism companies.

Sector Categories

Adventure Travel

Cultural & Heritage Tourism

Incentive Travel

Meetings/Conferences

Religious Tourism

Responsible/Eco Tourism

Rural Tourism

Safari Holidays

Walking/Hiking Holidays

Weddings & Honeymoons

 

 

Tourism Associations

Nepal Mountaineering Association (NMA)

Hotel Association of Nepal (HAN)

Nepal Association of Rafting Agents (NARA)

Nepal Association of Tour and Travel Agents (NATTA)

Trekking Agents Association of Nepal (TAAN)

 

 

Comparative Position of Tourism industry

Nepal tourism generated USD 377 million revenue in 2012 with influx of travellers from the UK,

Japan, Spain, Germany and France. These countries accounted for 45 per cent share in the

tourism market, Bhattarai said.

The direct contribution of Travel &Tourism to GDP is 2.8% of total GDP in 2011, rising to 4.8%

2012.

Tourism in India accounts for 2.5 percent of the GDP, the third largest foreign exchange for the

country. India ranks 42 in the United Nations World Tourism Organization rankings for tourism

arrivals in the country. The share in international tourist arrivals received by developing

countries has steadily risen, from 31% in 1990 to 48% in 2012.

The Himalayan nation recorded a robust 28 per cent increase in Indian tourists last year as

compared to 2010, he said without revealing figures.

Diwakar Bikram Rana, Officiating Director of the Board, said 2012 has been declared as the

`Lumbini Year' to promote the birthplace of Lord Buddha as a tourist spot.

List of travels agent in Nepal

S.No. Nepal Travel Agents & Tour Operators

1. All Tibet Travels & Kailash Holiday

2. Ample Travels Pvt. Ltd.

3. Angel Tours & Travels

4. Bhandari Travel & Tours Pvt. Ltd

5. Great Holidays Nepal

6. Hana Tours & Travels

7. Royal Adventure Travels (Pvt.) Ltd

 

 

8. Scenic Advanture Tours and Travels Pvt. Ltd.

9. Sumire Tours and Travels Pvt. Ltd

10. S- Asia Travels Pvt Ltd

11. Tibet Family Tours & Travels

12. Trekking Tibet Travels

Regulations need to be followed by Indian players

1. Tourism Policy, 1995 (Unofficial Translation) This tourism policy has been formulated with the aims of: increasing national productivity and

income; increasing foreign currency earnings; creating employment opportunities; improving

regional imbalances and projecting the image of Nepal more assertively in the international

arena; through the development and diversification of the travel and tourism industries.

Policy:

The participation of the private sector will be sought to the maximum extent for development

and diversification of tourism products. The involvement of government will be primarily

directed towards infrastructure development.

Participation of the Nepalese people in the integrated manner will be carried out for

environmental conservation programmes.

Existing tourism infrastructure and facilities will be upgraded. Priority will be given to

developing new tourist destinations, particularly in rural areas.

Popular religious tourism sites will be improved and promoted in order to develop religious

tourism.

Tourist service and facilities in the kingdom will be encouraged to upgrade in quality.

Due attention will be paid to improving regional imbalances while developing tourism.

Local investment will be encouraged in service-oriented, travel and trekking agency businesses

in which local investors have proven capability. Foreign investment, including joint ventures,

 

 

will be promoted in areas which transfers skills and technology or in capital intensive industries

like hotels and resorts.

The National Civil Aviation Policy will be implemented as an integral part of Tourism Policy.

Classification of Tourism Industries:

As per the policy tourism industries are classified as, Hotel Industry: Resort, Travel Agency,

Trekking Agency, Rafting Agency, Restaurants and Bar; Adventurous/ Intertaining Tourism

Services (Skiing, Gliding, Cable Car Complex, Hot Air Ballooning, Gulf Course, Polo, Horse

Riding); Tourism related Human Resource Development Centres.

Provisions Relating to Facilities and Incentives to Travel and Tourism Industries: As per the

provision set out in the Industrial Enterprises Act 2049 B.S., the Foreign Investment and

Technology Transfer Act 2049, the One Window Policy and other notices published by HMG in

the Nepal Gazette, facilities and incentives to be provided to travel and tourism industries are

given in that.

Provision Relating to Tourism Manpower:

• Regular tourism training programmes will be conducted through the Hotel Management

and Tourism Training Centre (HMTTC) to enhance the quality of services provided to

tourists. The private sector will also be encouraged to conduct such programmes.

• Use of local manpower will be encouraged in travel and tourism industries to the

maximum extent.

2. Nepal Tourism Board Rules, 2055 (1999)

By exercising the Power conferred on it by Sub-section (1) of Section 25 of the Nepal Tourism

Board Act, 2053 (1997), Nepal Tourism Board has made the following Rules with the approval

of Government of Nepal.

1. Provision Relating to Service Fee

I. Service Fee: The Board may receive the following service fee from the tourist and

tourism entrepreneurs pursuant to Section 7 of Act:-

 

 

Service fee as determined by the committee for the service to be rendered to the tourist by

the Board.

Service fee of Two percent over the total amount paid by each tourist to the tourism

entrepreneurs who operated the tourism business as prescribed by the committee.

If the Board has provided special consultation or service to any tourist or tourism

entrepreneur, service fee as determined by the committee for providing below rules.

II. Collection of Service Fee: The Board may collect service fee from a tourist and tourism

entrepreneur for providing direct or indirect consultation or service. Provided that, the

Board may specify particular service fee may not be changed for any consultation or

service.

III. Representative may be appointed to collect the Service Fee:

(1) The Board may appoint a tourism entrepreneur or any other person or body, its representative

to collect the service fee, or to collect service fee through any other method.

(2) If the committee considers it necessary, the Board may collect fee from a tourist directly, as

per the procedure prescribed by the committee.

I. To Deposit in Fund:

(1) The responsibility and liability of depositing the amount of service fee collected from a

tourist into Board's fund shall be that of the concerned tourism entrepreneur or person or body

authorized by the Board.

(2) Where the Board appoints a tourism entrepreneur as a its representative to collect service fee

pursuant to Sub-rule (1) of Rule 5, such tourism entrepreneur shall have to deposit the amount to

be paid by itself to the Board it's while depositing the amount of service fee collected into the

Board's fund pursuant to Sub-rule (1).

(3) A tourism entrepreneur or any other person or body appointed by the Board as its

representative to collect the service fee pursuant to Rule 5 shall after having deposited the

amount into the Board's fund, give a notice in writing thereof to the Board.

 

 

(4) Except otherwise provided in Sub-rule (1) and (2) the other procedure relating to collecting

service fee from tourist or tourism entrepreneur and depositing such amount into fund of the

Board shall be as prescribed by the Committee.

II. Action to be taken Against Defaulters:

(1) Where the tourism entrepreneur or any other person or body, having the duty to collect and

deposit service fee, fails to collect or to deposit into Board's fund even after collecting, the Board

may take necessary action to recover amount for service fee from such tourism entrepreneur or

any person or body.

(2) The Board may request to the concerned authority of Government of Nepal to suspend or

cancel the license of such tourism entrepreneur, if tourism entrepreneur fails to deposit into the

Board's fund.

(3) Where a request is made pursuant to Sub-rule (2), the concerned authority of Government of

Nepal shall cause to the concerned tourism entrepreneur to pay the amount of loss caused to the

Board and if such tourism entrepreneur does not pay the loss amount, Government of Nepal may

suspend or cancel the license for a specified period of such tourism entrepreneur.

(4) The Board may recover reasonable reparation from the concerned tourism entrepreneur, for a

loss caused to the Board.

Opportunities and Challenges in Nepal Tourism

Opportunities

 

 

1. Opportunity of Proper research and development of tourism product

2. Increases the chance of better investment options and opportunities

Challenges

Lack of international Airport, Growing Cut throat competition, Lack of proper

infrastructure and resources, Lack of qualitative human resource, Destination getting

expensive due to service charge and VAT, Lack of proper Training centers, Lack proper

monitoring mechanism for tourism field and tourists, Increase of online fraud cases,

Political instability and chaos making the destination unpopular.

Conclusion:

The huge number of Hindu and Buddhist heritage of Nepal, and its cold weather are the strong

attractions. Possessing 8 of the 10 highest mountains in the world, Nepal is a hotspot destination

for mountaineers, rock climbers and people seeking adventures. That creates one of the best

opportunities for doing business in Nepal.

Nepal government promotes tourism industry by the way of launching a national tourism

campaign as “Nepal Tourism Year 2011” in consultation with private sector, tourism

entrepreneur and media partners. This mega campaign has initiated as a common goal of all

concern sector to take Nepal’s tourism potentiality in to the new height.

The government of Nepal has also declared Lumbini Tourism Year 2012 to promote Lumbini -

the birthplace of Lord Buddha.

The direct contribution of Travel &Tourism to GDP is 2.8% of total GDP in 2011, rising to 4.8%

2012. And that also provide huge employment in Nepal that is 293,000 jobs (2.4% of total

employment) in 2012. Travel & Tourism investment is estimated at NPR11.2bn or 3.9% of total

investment in 2012. So that government of Nepal attracts and supports foreign investors for

growth of tourism industry.

Nepal tourism industry is mainly controlled by Nepal tourism board and it is main authorised and

governing body for tourism industry. Tourism Associations in Nepal are Nepal Mountaineering

 

 

Association (NMA), Hotel Association of Nepal (HAN), Nepal Association of Rafting Agents

(NARA), Nepal Association of Tour and Travel Agents (NATTA), Trekking Agents Association

of Nepal (TAAN).

As compare to Indian tourism industry, Nepal tourism industry has greater contribution in GDP.

That is 4.2 % of the total GDP of Nepal.

Nepal government has established policies and regulations for foreign investors and other players

that are Nepal tourism policy 1995 and Nepal tourism board rules 2055 in 1999. Nepal tourism

policy includes provisions for development of rural area, infrastructure development; minimize

regional imbalance, environment protection and tourism related manpower. Nepal tourism board

rules 2055 includes provisions related to service fees, collection of service fees, representative

appointed to collect service fees, depository fund and action to be taken against defaulters.

Suggestions:

Players of Nepal tourism should take steps towards well developed infrastructure

facilities and transportation facilities for comfortability of tourists.

For creating greater image of Nepal tourism in the mind of foreign visitors Nepal tourism

should launch more and more marketing campaigns for promotion of famous and heritage

places.

As we know Nepal tourism industry give 4.2 % contribution in GDP of Nepal and

generating foreign revenue, they should do more emphasis for that.

Country should have to more focus on safety and security of foreign travellers.