Economic Environment in Nepal- Industrial Sector
Industrialization in Nepal began from 2007 B.S. after the country opened its border to the outside world.
The first basic industries were the agro-based like grain husking, oil seed extraction, jute processing, tea production etc.
Afterwards in the decade of 2020 BS, some basic industries relating to construction material production came into existence.
Then after, import substitute industries like beverages, cigarettes, textiles, agricultural tools, furniture and domestic implements were established.
In the decades of 2030 and 2040, export oriented industries like carpet and garment industries were emerged in country.
In the decades of 2040 and 2050, industrial growth were quite impressive in the area of electronics, electrical equipments, constructions, food processing, cement, sugar and energy.
The first modern industry established in the country is Biratnagar Jute Mills in the year 1992 B. S.
This sector now contributing about 16% in the GDP of the country.
In the period of Rana, some efforts were made on the institutional structure for industries. 
Udyog Parishad was established in the year 1992 BS with the aim to promote agriculture, industry and commerce. 
Office of the Propagation of Nepali Cloth and Cottage Industries was established in the year 1996 BS as the specialized agency of Udyog Parishad. 
Cottage Sales Emporium was opened in Kathmandu to market products of crafts and cottage industries. 
Company Act was enacted for the first time in the year 1993 BS. 
Trade and Transit Treaty with India was signed in the year 2007 BS which helped in promoting trade and commerce. 
The construction of Tribhuvan Highway in the year 2013 BS facilitated the movement of people and goods linking Kathmandu with India.
Industries in the Planned Development Era
Nepal entered in the planned development era in the year 2013 BS. 
The country has experienced 12 planned development period up to now. 
Every planned development period has given the priority to develop the industrial sector. 
Form the first plan to seventh plan, the country has focused on developing the required infra-structure for developing the industry. 
The state had given the priority in resource allocation to industrial sector. 
The long term plan for the industrial development was brought. 
The state had established a large number of industries as well. 
The priority is given to establish the industry in this period and thus by the end of seventh plan, the number of industries were increased rapidly. 
From the eighth plan onwards, the country adopted the policy to promote the private sector in establishing the industries enacting the privatization policy. 
Then the state has been privatizing the public sector establishments. 
The first privatized establishment was Bansbari Shoe Factory. 
The growth of industries in Nepal is in slow pace.
The number of manufacturing establishments has been declining. 
The performance of this sector is not satisfactory and declining as well. 
The state has been setting the programs with high ambition every year but the achievements have been very poor. 
The industrial districts, a dozen in number have been playing important role in the development and growth of the industrial sector. 
Industrial infra-structure is still in developing stage. 
The appropriate environment for the development of industrial sector is lacking. 
Political inconsistency and transition period in the country is the major factor for the slow growth of this sector. 
Lack of sufficient resources in the private sector.
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