Competition Law and Policy for Development:
Insights from Nepal
Dhrubesh Chandra Regmi
South Asia Watch on Trade, Economics & Environment
(SAWTEE)
Introduction
PROFILE
GDP in 2002-03
US $ 5.85 billion
GDP per capita in 2002-03
US $ 269
GDP per capita (PPP)
US$ 1370
GDP annual growth rate (1990-2002)
2.3%
Population
24.6 million
Annual Population growth rate
2.3%
Life Expectancy
59.6
Adult Literacy
44.0%
Population below less than $1 day
37.7%
HDI Value
0.504
HDI Rank
140
Source: Human Development Report 2004 and Economic Survey 2004
Competition Issues in Nepal

Nepal adopted Market oriented policies

Need to develop competitiveness of the
domestic industries.

Optimum allocation of resources

Consumer Protection
Nature of Market / Competition

Manufacturing Sector

Utilities

Services
Sectoral Policies

Telecommunications Sector

Financial Sector

Civil Aviation Sector

Power Sector
Anti-competitive Practices in Nepal

Predatory Pricing

Tied Selling

Collusive Bidding or Tendering

Resale Price Maintenance

Creation of Artificial Scarcity

Price Discrimination

Unreasonably high Price

Syndicate System

Cartel
Competitive and Anti-Competitive Legal Provisions

1935 – First Legal Order related to Competition in Nepal
1960 - Essential Commodities Regulation Act

1962 - Postal Act/ Royal Nepal Airlines Corporation Act

1963 - Government Finance and Tender Management Act
1964 - Nepali Language Publication Corporation Act/
Prohibition to Foreign investment Act
1966 - Food Act



1976 - Feed Act
 1968 - Standard Measurement and Weight Act/ National
Insurance Corporation Act

Competitive and Anti-Competitive Legal Provisions ….

1971 - Local Administration Act/ Education Act

1975 - Black Marketing and Certain Other Social Offences Act

1978 - Drug Act

1980 - Nepal Standard (Certification Mark) Act

1983 - Nepal Petroleum Act

1984 - Nepal Electricity Authority Act

1987 - Garbage Collection Act
Competitive and Anti-Competitive Legal Provisions ….

1990 - The Constitution of Kingdom of Nepal / Citizen Investment
Fund Act

1992 - Industrial Enterprises Act/ Vehicle and Transportation Act
Electricity Act/Insurance Act/ Foreign Investment and Technology
Transfer Act

1993 - Privatisation Act

1996 - Telecommunication Act/ Nepal Civil Aviation Authority Act

1997 - Consumer Protection Act;

1998 - Iodized Salt Act

2001 - Income Tax Act/ Nepal Rastra Bank Act
SAWTEE in the scenario

SAWTEE has been actively involved since 1999.

Advocating for the need of a Competition law in
Nepal

Promoting Competition Culture

Creation of networks and pressure groups

Capacity building workshops
SAWTEE's Experience

Till date there is no well-defined competition policy in Nepal
and no comprehensive legislation-draft ready yet not enacted

Nepal Government has committed to enact competition
during its accession to the WTO (July 2004)

SAWTEE has been actively involved in pressurising the
government to enact competition law

SAWTEE has also emphasised on the importance of an
Independent Competition Commission
Draft - Competition Bill

Objectives

Make the national economy competitive through open
and liberal market economy

Develop independent market in the country through
optimal and equitable distribution and utilisation of
national resources

Benefit the consumer by ensuring healthy competition in
the goods and services sector

Control anti-competitive practices
Provisions

Anti competitive Agreements

Abuse of dominance

Mergers and Acquisition

Monopolies

Restrictive Business Practices

Competition Promotion Commission

Other Important Features of the Bill
Success - Elusive

Unstable governments over the past few years

Business Community still apprehensive

Unorganised Consumers

Awareness among stakeholders
Competition Law not enough

Other issues to be addressed
 Supply side Constraints

Access to credit

Good governance