Request to Allow One-Time Import of Vehicles Below Euro-6 Standard in Nepal
20th August 2025, Kathmandu
During the inauguration of the NADA Auto Show 2025 in Kathmandu, a key dialogue emerged between the private sector and the government regarding the future of Nepal’s automobile industry.
One-Time Vehicle Import
Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), appealed to the government for a one-time allowance to import vehicles below the Euro-6 standard that were ordered prior to the new regulation’s strict enforcement. This request highlights a major point of friction for importers facing a sudden policy shift.
The Euro-6 Transition: A Call for Flexibility
The move to the Euro-6 emission standard is widely recognized as a positive step for environmental sustainability and improving air quality in Nepal. Euro-6 is the current European standard for vehicle emissions, which sets stringent limits on pollutants like nitrogen oxides (NOx), carbon monoxide (CO), and particulate matter (PM). The adoption of this standard demonstrates the government’s commitment to cleaner technology. However, FNCCI President Dhakal’s request points to the practical challenges of such a transition. He emphasized that importers had already placed orders for a significant number of vehicles under the previous, less-stringent standards. A sudden, unyielding policy change could result in financial losses for these businesses. By appealing for a one-time exemption, Dhakal is seeking a balanced approach that supports environmental goals without penalizing the private sector for pre-existing commitments.
Prime Minister KP Sharma Oli’s positive response to this request suggests a willingness to collaborate with the business community. He reiterated the government’s commitment to modernization, policy reforms, and creating an environment free from obstacles for investment. This open dialogue between the government and the private sector is crucial for effective policy implementation and sustainable economic development.
The Role of the Automobile Industry in Nepal’s Economy
The NADA Auto Show itself serves as a platform to showcase the vital role of the auto industry in Nepal’s economy. Dhakal highlighted that the industry is a key driver of economic activity, generating employment, attracting investment, and fostering industrial development. The event, which brings together dealers, manufacturers, and consumers, is an important indicator of market health and consumer confidence.
There are also clear signs of recovery in the Nepali economy, according to Dhakal. He mentioned a notable 40% increase in vehicle sales over the past two years, along with a rise in credit flow and increased profitability for commercial banks. These indicators signal a positive trend, suggesting that the economy is rebounding from recent challenges.
The event also underscored the growing interest in electric vehicles (EVs). Dhakal noted the rapid increase in EV imports, pointing to Nepal’s potential to develop a domestic automobile assembly industry, data centers, and other eco-friendly products. Promoting green technology and local manufacturing could reduce Nepal’s reliance on imports and enhance its economic resilience.
Government Policy and Private Sector Engagement
Dhakal also praised the government’s recent legislative efforts, which have seen over 30 laws amended to be more business and investment-friendly. This demonstrates a positive shift in government attitude towards the private sector. The establishment of the Nepal Development Company by FNCCI with a capital of NPR 10 billion is a testament to the private sector’s confidence and willingness to invest in large-scale projects, including infrastructure, energy, and tourism. This company has the capacity to finance projects worth up to NPR 40 billion, opening up new investment opportunities and accelerating economic growth.
In conclusion, the NADA Auto Show 2025 has served as a platform for a constructive dialogue on the future of Nepal’s economy and its automobile industry. FNCCI President Dhakal’s plea for a flexible approach to the Euro-6 standard and the government’s receptive stance highlight the collaborative efforts needed for sustainable development. As Nepal continues its economic recovery and looks toward a greener future, such partnerships between the public and private sectors will be essential to navigate challenges and unlock new opportunities for growth and prosperity.
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