FDI to be allowed in travel, trekking agencies

The government is opening up the service sector in line with its commitment to World Trade Organisation (WTO).
A recent meeting of Investment Promotion Board has 'decided to open the sector for the foreign investment.
"We are planning to allow 51 per cent foreign direct investment (FDI) in travel agency,” said a Investment Promotion Board member, who was in the meeting.
According to the current law, travel agency, trekking agency, tourist lodging, water rafting, pony trekking, horse-riding are under the list of industries not to be granted permission for foreign investment.
However, Nepal had committed to open up foreign investment in travel agency and tour operator service after the WTO membership, but limited to 51 per cent. "But up to 80 per cent foreign investment has already been accepted in hotel, lodging services and graded restaurants with government's permission," he said, adding that Nepal’s commitments under GATS in twelve sectors including tourism sector, the country needs to access Nepal’s capabilities and resources to compete in the global tourism industry, find the optimum balance between local and foreign participation in this industry, access the ability and resource to fight barriers to market access created by other counties through technical standards, subsidies, discriminatory access to information and distribution channels.
"Currently there is only one travel agency that has FDI," chief of Travel Section under Tourism Industry Division Deepak Silwal said, adding that the agency was regiestered before the law banned the foreign investment in 2049 BS on travel agencies.
At present, there are 2,669 registered tour guides and 1,765 travel agencies in the section that also monitors these agencies. "We have fined some agencies also in the last fiscal year," he said, adding that after Nepal Tourism Year 2011 declaration, more agencies have been registered.
"Tourism industry will have the largest monetary turnover in the world by the year 2020," according to the global survey. Thus, trade liberalisation constraints in tourism must be acknowledged and differences between the SAARC nations must be rectified in order to reap the highest benefit of this growing industry.
"The Industrial Promotion Board is being formed under the chairmanship of Minister for Industry, in order to increase the pace of the industrialisation in the country, to formulate the policy regarding industry and investment and to coordinate between central and implementing level," the source said, adding that the board has to render necessary co-ordination in formulating and implementing policies, laws and regulations pertaining to the industrialisation of the country, and give guidelines in attaining the objectives of liberal, open and competitive economic policies pursued by the country.
"Thus the opening of the travel sector is i nline with the policy," he added.