New budget offers no respite for Nepali auto industry

Ankit Shakya, Nepal Drives

Ankit Shakya, Nepal Drives

New budget offers no respite for Nepali auto industry

‘The sector is unlikely to generate enough jobs and earning opportunities to make a significant contribution to the country’s economic revival. The automobile sector is clearly unimpressed by this budget’

Although many of us expected the new budget to uplift the mood of the auto sector and support the emergence of electric vehicles, that didn’t quiet happen, did it now? Here is how the industry reacted to the budget. No, what follows is not much to cheer about.

Karan Chaudhary, Executive Director, CG Motocorp (Suzuki cars) 

We were hoping something concrete for the revival of the auto industry. Yet the government has doubled down on its earlier stand that vehicles are non-essential commodities. Instead of promoting EVs, duties on them have further risen. The budget has discourages their growth. Further, there has been no respite in credit limitation in auto financing. Yes, the duty structure in the internal combustion engine has not been changed, but this is too little too late.

While there are a few optimistic points, such as the removal of excise duty on spare parts and emphasis on auto assembly, overall, the measures fall woefully short of expectations. Because of this, the sector is unlikely to generate enough jobs and earning opportunities to make a significant contribution to the country’s economic revival. The automobile sector is clearly unimpressed by this budget.

Anish Lamichhane, AGM, KIA Motors Nepal


For a company like KIA Motors that has played a vital role in setting up an EV-centric ecosystem in the country, this budget is nothing but a disappointment. It has killed the aspirations of thousands of people who wanted to own an EV, something the government had been promoting of late. At a time the focus should have been on lifting the automotive sector and supporting the growth of electric cars, the new budget has pushed us deeper into debt and heralded an environmental crisis. Instead of increasing our self-reliance on energy, the government has worsened our dependence on petroleum.


Deepak Agrawal, VP, Jagdamba Motors Pvt. Ltd (TVS) 

We expected the budget to address the grievances of the automobile sector.  At a time the auto industry was already reeling under the pressure of the Covid-19 lockdown, the new budget has further deepened our woes. The government has done nothing to revamp duty structure, bank interest, or offered any kind of subsidies. Further, the shocking decision to increase the tax on EVs has made us lose faith in the government.

The government policies aren’t practical. These poorly drafted policies have hindered our investment plans time and again. For example, we have issues with the government’s CKD (Completely Knocked Down) policy. Although the government announced 50 percent discount on excise duties for CKD products, the discount was reduced to 25 percent after it came into operation. Hence, we request all concerned to draft long-term policies, sustainable policies.

Mahesh Kumar M, GM, United Traders Syndicate (Toyota) 

The industry anticipated innovative measures. However, the government seems to have no interest in reviving the industry. And out of nowhere, it increased the duties on EVs. This came at a time when the industry was growing so rapidly. On the one hand, the government is trying to promote the growth of EVs in Nepal. On the other, it has drastically increased duties on EVs. The huge gap in revenues coming from EVs and fossil-fuel-powered vehicles may be the reason for this. Although the taxation for ICEs hasn’t increased, most of our hopes have been dashed.

Kiran Acharya, Head-Marketing, IME Motors 

To mitigate the risks associated with Covid-19, the government has put forward many plans and policies, which is definitely a welcome step. But it should have skipped many yet-to-be implemented programs from last year instead of re-allocating funds for them.

Now, coming to the auto sector, this has been the most criticized budget. If you look at earlier trends, the government has never lent us any support, and the same is true this year as well. Our finance minister has increased taxes on electric cars, hitting the industry hard. Many of us expected this budget would be a dramatic departure from the past and would introduce bold reforms in petroleum dependence, renewable energy, and agriculture, etc., but it has failed to address any of these concerns.

Nawaraj Koirala, Marketing Manager, TVS 

The budget is a very regressive one, with increases in taxes on EVs, and no relief package for the auto industry. The auto sector, which is in a crisis, is now definitely headed for a prolonged slump. I expected the budget to support the emergence of electric vehicles, but no. The Ministry of Energy had issued a white paper two years ago focusing on increasing the import of electric vehicles by 50 percent. I wonder where that plan has now gone. This is not a budget for our sustainable future.