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The Indian international tire brand CEAT has been present in the Nepali market for over one and a half decades. CEAT is the flagship company of the RPG Group. Satya Srinivasa Rao, Vice-president, International Business of CEAT India was recently in Nepal for a business visit. ApEx sat with Rao to talk about the Nepali tire market and CEAT’s plan for Nepal. Excerpts: How is the market of CEAT in Nepal? What growth prospects do you see in Nepal? We have been in the Nepali market for 15 years now. Our progress in Nepal has been good over these years. But last year, the business of tires went through a downturn due to import restrictions imposed by the Nepal government. However, our distribution channel is intact as the distributors have done a great job. And this year, we are again ready to see good growth. The CAGR (compound annual growth rate) of CEAT in Nepal has been above 14 percent in the last decade. This year, we are looking for a growth of above 20 percent. What is your market share in Nepal? We command around 20-22 percent of the share of the Nepali tire market. I am only talking about the passenger vehicle, two-wheeler, and truck segments excluding the agricultural vehicles segment. We have two distributors in Nepal, and they are tied up with over 400 local dealers who help us in the supply chain. In which segment do you see the biggest growth potential in Nepal? We have been very strong when it comes to passenger vehicle and two-wheeler segments. In two-wheelers, we are leading the market occupying a large market share. In passenger vehicles too, we are among the leaders. When it comes to commercial vehicles, we still have some grounds to cover, I must say. I would say we are in the third position—MRF being the first, followed by Apollo. However, we are trying to reach out to direct customers and expand our share of the market. Tell us about the innovation and customer service of CEAT.  We are not doing any specific product innovation for Nepal because the market here is almost similar to India. If we sell 100 types of products in India, around 90-95 percent of them also get sold in Nepal. But when it comes to services, we are ready to provide top-notch customer services. The new CEAT shop is a signature showroom of CEAT. We provide all tire retail services under one roof here. Customers can also look up various variants of CEAT tires from the showroom. How is CEAT doing in India? In India, our progress has been very good in the last five years. Similar to Nepal, we are No. 1 in two-wheelers. For passenger vehicles, Apollo and CEAT are neck-to-neck in the second position. We have made great progress in passenger vehicles because we are reasonably new in the market as we entered this category after 2008 only but other companies were in the market for a longer time. CEAT has not left behind Indian players only but multinational companies too. In commercial vehicles, we are slightly behind in the Indian market. But we are hoping to do better in the coming years. What is the contribution of your exports to the total business? We are currently in around 115 countries across the globe and around 16 percent of our total business is from export. Tell us about CEAT’s electric vehicle (EV) specific tire ‘Energy Drive’. Lately, every company has started focusing on EVs. Not only automobile companies but tire manufacturers too. The share of EVs in the automobile industry is expected to go up drastically in the next few years. We want to be leading the race when it comes to EV tires. Hence, CEAT has come up with Energy Drive tires specific to EV vehicles. We are glad to cater to the requirement if Nepal needs EV tires.

In the third week of March, the British International Investment (BII) and Dolma Impact Fund announced a combined funding of Rs 1.98bn to WorldLink Communications Ltd in their series B investment. WorldLink, which had already received Rs 1.35bn in investment from BII in October 2019, has been focusing on expanding its network coverage across Nepal. ApEx talked to the company’s CEO Keshav Nepal to know about the current focuses of WorldLink and its future plans. Excerpts:   How is WorldLink Communications utilizing the Rs 1.98bn funding from the British International Investment (BII) and Dolma Impact Fund? What areas the company is focusing on with the investment? The business model of an internet service provider (ISP) is more focused on capital expenditure, and money is spent mostly on network expansion and consumer equipment like router setup boxes that are offered for a deposit of just Rs 500 while the ultimate cost can come around Rs 8,000 in whole. So, we are spending the funds on capital expenditure. In Nepal, ISPs are more than plentiful in urban areas, but few only in rural areas. Our current focus is on increasing capital expenditure in rural areas than in urban areas. How do you see the evolution in the internet connectivity landscape in Nepal? According to official statistics, there are roughly 6.6m households in Nepal, and around 92 percent of them are electrified which is high for a developing nation. Smartphone penetration is equal to the literacy rate which is around 76 percent of the population. This suggests that those who can read and write use smartphones and the internet more frequently. I don’t see any affordability issues currently because, in Nepali households, there is also a sharing culture on the internet. For Rs 1,000 worth of monthly internet subscriptions, the customer shares the Wi-Fi network with their neighbors. And ultimately, the cost comes to around Rs 100 per person per month, which is affordable as it also avoids the cost of mobile data payments, meet-up transportation costs, and more. If we compare the census data from 2011 to 2021 for internet usage from fixed broadband, we can notice a substantial increase in connectivity and development over the course of the decade, from three percent of total households to 38 percent. So, this evolution has been great. ISPs in Nepal reported massive growth in business after the start of the Covid-19 pandemic. How is the business growth of WorldLink?  Although online and digital communication was fairly prevalent in Nepal during Covid-19, I don’t believe the pandemic had a major impact on the expansion of WorldLink. WorldLink is a premium brand compared to other companies. Therefore, those who could afford it had already subscribed. Those who were in a dilemma if they should subscribe or not were among the new subscribers during the pandemic. As we’ve expanded our services to rural areas in the past couple of years, we have been growing to around 175,000 customers per year; it was around 100,000 per year before and during the pandemic. Tell us about the company’s presence in Nepal.  Now, there are almost 800,000 households who are subscribed to WorldLink. Out of 6,743 wards in the country, we are present in about 3,000. WorldLink envisages expanding services to every ward in Nepal. How will internet business in Nepal evolve in the coming days as ISPs are now competing to give larger speed internet services? The new companies are attempting to reduce the price and get a larger market share through a marketing gimmick. However, the expense of the business will eventually increase, causing the price to go up. Because the business can’t sustain with very low rates. I think internet business leans toward when the affordable rate meets with the highest quality. There could be a variety of challenges customers can come through including latency (ping), fluctuations in connectivity, and router problems and I think addressing these issues and providing better experiences to customers will determine the caliber of internet business. What new areas in internet services WorldLink is planning to get into to keep up with the changes? For the past two years, we have developed a relatively straightforward approach to improve the quality of the experience in serviced areas and to build internet connectivity in areas lacking services. Our internet data reveals that WorldLink’s service has significantly improved in this context. We follow up on complaints that have been resolved, and our business ensures that issues are settled within two hours. We are making work toward a quick solution and aim to lower the time from two hours to half an hour. We keep track of each complaint for better further services. Due to its large range and two modes of connection, the WorldLink network in Kathmandu does not frequently go down. Our main focus is on providing high-quality service to the customers. Your company has recently tied up with the video game PUBG to provide a better gaming experience in Nepal. How does this partnership work? Nepal is a very popular region for PUBG. The owner of PUBG wanted to ensure a high-quality gaming experience in Nepal, and they were looking for a reliable partner. We’re happy to be recognized as their Nepali partner. For now, we are developing packages and working to reduce latency. This is not only for the WorldLink customers but for everyone who plays PUBG. The establishment of a PUBG server in Nepal may be possible in the future, along with any other positive developments. Additionally, creating a Nepali workforce for the gaming business is what we've suggested to them. For instance, premium customers need real-time support which Nepalis can provide as they are interested in this game. They can expand job opportunities in the gaming industry. I’ve seen call centers and agents in Nepal playing various popular games. I believe that this could be a good chance for aspiring gamers in Nepal. These things are not discussed thoroughly with them, but we are just sharing the possibilities.  

Jagdish Dahal is a member of the Supreme Court Bar and has been practicing corporate law for around three decades. He has a wide experience in insurance, tax, banking, labor and corporate laws. Besides, he has also worked as a legal consultant in various projects of UNDP, USAID, ADB, EU and commercial banks. ApEx talked to Dahal regarding Nepal’s economic and legal situation from a corporate lawyer’s eye. How do you see our banking sector? Nepal has a good banking human resource. Yet, there are a few issues with them. Nepali banks are town-centered, and the state has also not been able to make banks village-centered. Also, banks enjoyed investment in quick profit-oriented ventures like trade, automobiles, real estate, housing, hydro, tourism and other service sectors rather than in production-oriented firms. The states meanwhile failed to regulate these things. The same investors started to invest in both banks and trades which had many conflicts of interest. Due to a lack of direction in political leadership, these problems arose which ultimately impacted the banking sector and national economy. However, their regulator, Nepal Rastra Bank (NRB), has played a good role in improving the Nepali banking sector. Maybe this is because the World Bank and International Monetary Fund (IMF) regularly suggests and supervises NRB’s work. What is the condition of insurance companies? The history of the insurance business is not too old. It was initially started to help and support banks. And till today, things seem the same. Banks and insurance companies have a cordial relation and if banking business gets down, the insurance companies also see a plunge in businesses. Over the time, the insurance business has been expanded and there are over 40 life and general insurance companies in Nepal. But their condition is not exciting. The indexes of the economy show that we are already in a crisis. At this point, I feel that this is the time to downsize banks and insurance companies. And the government should formulate plans to battle the recession so that everyone can sustain the period. Does Nepal have good laws? Not a single law or plans and policies in Nepal has been made by the experts. They are made by bureaucrats. What bureaucrats do is make the laws in their favor so that it will be easy for them to work. No governmental programs and packages help general people because they are not meant for the public, but the bureaucrats. Moreover, the laws in Nepal are copied and translated from the foreign countries. Many of them have no Nepali taste. For instance, the Income Tax Act is so vast and undefined that the act itself hinders revenue generation. For a better revenue collection and involvement of every Nepali to strengthen national treasure, laws, acts and provisions should attract taxpayers. The legislature should work to incorporate public demands in the laws. Similarly, there are also many issues with banking, insurance, security market and corporate acts. Not only with their laws, but many of them need a complete restructuring of the organization. They too need experts in the leadership of the organization. How do you see the labor situation in Nepal? The labor situation is terrible here. Nepal has many daily wage workers, and it is difficult for them to sustain with the wages they get. So, the laborers are not in a good situation in Nepal. There are many issues of overwork and less salary. The state must conduct a study on how much money a person needs to sustain for a month comfortably and the minimum wage cap should be strictly maintained. It must be regulated, and such studies should be conducted regularly as inflation plays a major role in it. The minimum wage cap should be updated regularly. The government should also maintain an updated list of its people, how many of them are employed, how many are unemployed and all. And then, the government should provide them with employment and generate income for the expenses of non-working age groups too. What types of corporate issues are in larger numbers in the court? Banking offenses, issues between banks and loan receivers, revenue issues and trade disputes are the major lawsuits. Lately, these issues have increased because the poor economic situation has vacuumed the gap between banks and customers. There have been issues of loans as the entrepreneurs have not been able to pay back due to lack of business. How do you rate the banking and financial literacy of Nepalis? Financial literacy has grown in Nepal. The Constitution of Nepal 2015 compelled the banks and financial institutions to open its branches in each local government. Hence banks were spread to rural areas of Nepal. The banks have helped people know the importance of saving and have taught how to deposit and withdraw money. However, the banks are yet to help people start their own venture. The banks should help other businesses to flourish so that there will be employment opportunities in every place. It will ultimately help every sector of Nepal. What are your suggestions for all these issues? If the political leadership realizes their responsibility toward the nation, we have issues that could be fixed. But we have not seen the government and concerned parties in a rush even if we are in crisis. So, my suggestion and solution are that the leadership should correct itself and help businesses with better entrepreneurial environments. Experts should be brought to power, and they should be allowed to make plans to fight the crisis. We should also be able to learn from the good deeds of our neighboring countries—the two major economies in the world. Bureaucracy has a similar problem. They have a problem of superiority complex. They believe that their abilities or accomplishments are somehow dramatically better than others and without them, this country would not have existed. They too need a serious correction on their work and behavior.

Uddhab Pyakurel is an associate professor at the Kathmandu University School of Arts. Along with his university job, Pyakurel is also engaged in a research of Nepal’s foreign policy and international relations. ApEx talked to him about the foreign policy challenges of the Pushpa Kamal Dahal government and Nepal’s relations with big powers. What are the key foreign policy challenges of the Pushpa Kamal Dahal government? Confusion in understanding Nepal’s geo-political reality within the ruling Maoist Party has remained the main challenge for Dahal and his party while being in the government or in the opposition since 2008. His own party is not rational when dealing with Nepal’s immediate and distant neighbors. That is why they use buzzwords like “equi-distance” and “equi-proximity” which doesn’t help a country like Nepal. Our leadership has to deal with many practical things to meet not only the nation’s aspiration but also day-to-day needs of people. For this purpose, a party with ruling ambitions has to go beyond emotional and ideological stands, and revisit those positions in a new context. With all communist parties in Nepal, we often find double standards. Their leaders are actually ready to compromise more than that is expected of them while dealing with external forces, but they put on a strong and unyielding attitude in front of their party cadres. Familiarizing the party cadres through new discourse and discussions in the changed global context will be helpful to both the Maoist party and its leader Dahal. They should revisit their old positions and formulate new ones to show that the party has a clear position. How do you see NP Saud as a foreign minister?  It could be considered as a great relief for Dahal to have Nepali Congress as a coalition partner. The government has a relatively pragmatic stand and attitude on Nepal’s foreign policy because of this. But it must be said that Congress didn’t cooperate with Dahal by appointing NP Saud as a foreign minister. He has in the past shown a lack of interest and engagement on issues to be dealt by a foreign minister. Saud could have been a good education minister, even home minister. But as a foreign minister, his performance has been less than average. I think this is unjust for Saud too. Nepali Congress and CPN (Maoist Center) have different views on how to deal with major powers. How does this affect our external relations? I don’t think that all the parties and leaders in the government have different views when it comes to dealing with major powers. You are right that some political parties including the Maoists still have a “double stand” in their view of external powers. But as stated earlier, the Nepali Congress, with relatively better understanding, could have played a role to shape a clear view. It seems like a missed opportunity for the Congress, as it could not place the right person in the right place. We have some outstanding issues with India including the border dispute. How can we resolve them? Clarity in issues and art of negotiation with acceptable modus operandi for counterparts are two major factors of a successful negotiation. But Nepal and India have never followed this modus operandi. Weak presentation in issues due to a lack of preparatory work has always remained a big problem for Nepali side while dealing with India. That is why most of the issues have not been resolved. On the issue of our borders, both the countries are missing an opportunity here to sign the protocol to realize the agreement made by ‘Nepal-India Joint Technical Level Boundary Committee’ formed by both the governments in 1981. If it is signed, both the governments will have time to concentrate on major points like Susta and Kalapani. What is happening today is that the media covers the news of border disputes on an almost daily basis when in fact they could have been dealt with by the apex body of the two countries. The border issues are getting more complicated and ruining the environment for negotiations. That is why all negotiations and discussions are more or less the same abstracts i.e. 1950 treaty, security concerns, good relation, etc. The Nepali side has recently added the EPG (Eminent Persons’ Group) report on the menu. Unilateral menu in the bilateral talk is not considered as an art of negotiation. Contemporary issues which have impacted public life can be presented, and if the issue is there with a good preparation, I don’t think that there will be any chance for the two countries to deny it. Even if treaty provisions offer equal treatment to Nepali and Indian citizens if they visit and stay in the neighborhood, many new provisions introduced recently made citizens’ mobility further complicated. Both the governments need to discuss the issues which will eventually strengthen people-to-people relations. This is only the best way for better relations between the two countries. How do you view China’s BRI in Nepal? We need to understand BRI as the concept, and the usefulness of the program for a country like Nepal. The BRI seems to be good for middle income countries with an aspiration to build mega infrastructure projects. Nepal, being dependent on a subsistence economy, has just begun with relatively small scale projects and a moderate amount of expenses. That very amount is managed by it from within its friendly nations, largely in grants and low interest. That is why the Nepal government and BRI authority have so far been unable to negotiate for projects. Kathmandu-Kerung Railway has motivated Nepal to use the BRI, but it seems that they could not agree on a funding model. The hope was also dashed after China itself delayed and put the project of Shigatse-Kerung railway on hold for years.