RAJESH BABU SHRESTHA : Contributing to Bolster Nepal-Austria Relations

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 RAJESH BABU SHRESTHA : Contributing to Bolster Nepal-Austria Relations

Shrestha is making every effort to help Nepal make the most of its bilateral relationship with Austria.


Nepal and Austria established formal bilateral ties on August 15, 1959. In the last 62 years, both countries have forged a relationship based on trust, mutual respect, understanding and cooperation. Over these years, high level visits, diplomatic exchanges and meetings between Nepal and Austria have taken place, and both sides have agreed for periodic reviews to make their relationship meaningful.

Austria has actively supported Nepal in its development endeavours directly and through the European Union. After the reestablishment of the parliamentary democracy in Nepal in 1990, the Himalayan nation became one of the focus countries in South Asia for Austria’s development cooperation. To help Nepal overcome the adverse impacts of the decade long Maoist insurgency, the EU country directly supported Nepal in a number of areas including tourism, rural development and poverty reduction.

After the first constituent assembly elections were held in 2008, Austria actively helped Nepal in the drafting of a new constitution. Similarly, Austria has provided humanitarian aid to Nepal during times of emergencies like it did after the 2015 earthquake and during the second wave of the Covid-19 pandemic recently. Likewise, the European country has also been supporting Nepal in other areas such as conservation of heritage sites and climate change resilience.

“Visible progress has been achieved in terms of bolstering the bilateral relationship between the two countries over the years. Now the focus should be on strengthening economic cooperation and trade ties,” says Rajesh Babu Shrestha, honorary consul general of Austria to Nepal. According to him, energy, infrastructure and tourism are some of the potential areas of cooperation. Shrestha, who is the Managing Director of Manakamana Darshan Pvt Ltd, a Chitwan Co-E Group company, has represented Austria in Nepal since 2017.

At present, the size of Nepal’s trade with Austria is small and Shrestha thinks that it presents big opportunities for both countries. In 2019, Nepal imported goods and services worth USD 4.58 million from Austria while its imports to the EU country amounted to USD 2.81 million. Nepal’s major exports to Austria are paperboard, readymade garments, handicraft items and essential oils. Similarly, beverages, food items, animal fodder, fabrics, cable car systems, and machines and equipment used in hydropower projects are its main imports from the European country.

Some big Austrian firms such as the electromechanical equipment manufacturer Andritz Hydro and cable car system company Doppelmayr have been supplying equipment and services to Nepali companies for the last couple of decades. In the meantime, Nepal has also received some investments from Austria. Data published by the Department of Industry shows 21 business projects with a total Austrian investment of Rs 118.47 million were operational as of July 15, 2020.

Despite being culturally, socially, economically and politically different from each other, Nepal and Austria share some commonalities geographically. Both countries are landlocked and have vast mountain and hilly regions. According to Shrestha, this presents opportunities to work for infrastructure and tourism development in Nepal. “Austria is one of the top countries in the world for hill and mountain infrastructure construction. They have expertise in building connectivity infrastructure such as roads and tunnels along with slope protection of hills,” he says. Shrestha mentions that Austrians are also well-experienced in constructing ropeway systems that are mostly used as means of transport for tourism activities in hilly and mountainous regions. “Although they may not invest directly, we can use their expertise in connectivity projects,” he adds.  

In the recent years, the two countries have been working actively to bolster the bilateral relationship in both government and private sector levels. In 2017, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) signed a memorandum of understanding (MoU) with the Austrian Federal Economic Chamber (AFEC) to promote trade and commerce between the two counties. During the Nepal visit of the then Austrian Foreign Affairs Minister Dr Karin Kneissl in February 2019, both sides agreed to work on trade, investment, technology transfer environmental protection, sustainable development, clean energy and counterterrorism to further strengthen their bilateral ties.

In May of that year a cooperation agreement was signed between Nepal and Austria to invest in the former’s transportation and hydropower sectors and during a joint secretary-level meeting in October, Austria expressed its commitment to invest in two hydropower projects—Dudhkoshi (635 MW) and Tamakoshi V (100 MW).  In October 2020, the two countries held their first ever Bilateral Political Consultation Meeting virtually and discussed to find ways to deepen their engagement in economic cooperation, trade and commerce.

Shrestha says that Kneissl’s visit was important as no high-level Austrian delegation had visited Nepal after 1990. “After the visit, we also invited an Austrian trade mission,” he informs.

According to Shrestha, there were plans to invite another trade delegation from Austria, but they were cancelled due to the Covid-19 pandemic. “It is encouraging that Austrians have planned to organise trade delegations to Nepal every two years which shows their growing interest in the Himalayan nation,” he says.

But bringing in investment from Austria will require changes in FDI policies. Shrestha observes that many things still need to be done to attract foreign investment. Further simplifying rules and regulations and offering tax concessions can lure investors from countries like Austria to invest in Nepal.

 According to Shrestha, Nepal can export many more items to Austria. “For instance, Nepali coffee and herbal products can achieve a good market there,” he says.

The Himalayan nation is a popular destination among Austrian trekkers, adventure seekers and mountaineers. Around 7,000 to 8,000 Austrian visitors come to Nepal every year. “Some Austrians even visited Nepal in 2020 and 2021 when the Covid-19 pandemic severely affected the tourism and travel business,” says Shrestha, adding, “Over the years, tourism development has been one of the focuses for Austria’s development cooperation in Nepal and this will be needed more than ever for the post-pandemic recovery.” He suggests that the government and other tourism sector stakeholders should work on organising promotional campaigns efficiently to attract more Austrians keeping in mind the revival of Nepali tourism.

"Among other factors to foster tourism, it is important to have strong air connectivity with tourist source countries," says Shrestha. According to him, the resumption of direct flights from Vienna to Kathmandu, which were stopped after the EU aviation safety watchdog banned Nepali airlines in European airspace citing safety reasons in 2013, is important to bring more tourists.

Shrestha is a member of the Honorary Consul Corps – Nepal (HCC-N), an association of Nepali businesspersons representing different countries in Nepal as honorary consuls and consul generals. Shrestha thinks that honorary consuls have an important role to play in terms of strengthening bilateral relationships and trade ties between countries. He says that there was a problem of recognition for honorary consuls in the past. “But now, the government has realised our role is very important for economic diplomacy and that we provide a strong medium to communicate with other countries to resolve issues related to economic cooperation, trade and commerce,” says Shrestha.

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