The Ministry of Industry, through the Foreign Ministry, forwarded the revised Bippa draft for China’s endorsement after Industry Minister Mahesh Basnet approved the draft, the Industry Ministry said on Thursday. The ministry said Basnet approved the draft after holding inter-ministerial discussions.

Nepal has already signed Bippa with six other countries, including France, Germany, Britain, Mauritius, Qatar, Finland and India.

Bishnu Prasad Dhakal, under secretary at the Industrial Promotion Division of the Industry Ministry, said the draft sent to China was similar to that signed with India. “Since the Bippa signed with India is the latest one, it has been made the standard document for the agreement with China. We modified some contents of the China-sent draft before the minister’s endorsement,” Dhakal said.

He said the Industry Ministry would also send a three-point document to China soon, justifying the modification Nepal made in the draft. Dhakal said the draft forwarded to China also incorporates issues of investment promotion and security as well as compensation clauses.

When Nepal signed Bippa with India during former Prime Minister Baburam Bhattarai’s sojourn to India in 2011, the compensation clause had invited controversy, with one faction of the ruling UCPN (Maoist) opposing the agreement.

Article 6 of the Bippa signed with India provisions compensation to investors if they suffer losses due to war, armed conflict and state of emergency. “Such investors shall be accorded treatment by the host country, no less than the treatment accorded to its own investors or investors of any third state. Any payment made under this Article shall be freely transferable,” states the agreement. However, government officials and private sector representatives say the government has to assure investors on the security of their investments to attract foreign investment. Given growing Chinese investment in Nepal, stakeholders say the Bippa will help boost the investment further.

Dhakal said Bippa with China would be instrumental in attracting a lot of investment from the northern neighbour and convey a message to the world that Nepal has a conducive business environment.

President of Federation of Nepalese Chamber of Commerce and Industry (FNCCI) Pradeep Jung Pandey said the Bippa with China is essential to assure foreign investors about the security of their investment. “Bippa with China will definitely increase Chinese investment, particularly in hydropower and infrastructure sectors,” he said, adding China has both cash and expertise, and Nepal can benefit from Chinese investment as well as technology transfer.

According to ministry officials, Minister Basnet endorsed the revised draft only after carrying out a thorough study on provisions, and inter-ministerial discussions. “A technical team formed by the ministry had thoroughly studied the draft proposal sent by the Chinese side before presenting it to the minister for final endorsement,” said Dhakal.