Nepal's Bilateral Relationship (BIPPA Agreement)

Bilateral Investment Promotion and Protection Agreement of Nepal

Nepal's Bilateral Relationship (BIPPA Agreement)
BIPPA Agreement

BIPPA stands for Bilateral Investment Promotion and Protection Agreement. It is a legal contract secured between two economies (host country and home states); which establishes a safe investment for investors. The primary objective of this agreement is to protect foreign investors from non-commercial losses, where investors have the same rights as local investors in the host country. Non-commercial losses here refer to riot, terrorist attack, war, armed conflict, insurrection or state of emergency, etc. However, losses from workers strike are not included; the state only pays compensation for investors arising from non-commercial losses as stated above. BIPPA is the most relevant way to attract foreign investors to host countries.

Nepal is gradually moving towards economic development. The settlement of political disputes in the country leads to a peaceful business environment. BIPPA is the focal point for Nepal's foreign (inward) investment. Government of Nepal should sign another BIPPA with more countries of the world.

The BIPPA agreement is beneficial for both countries. The host country will receive investments that will create several job opportunities; and other benefits on the amount of profit transferred to their economy. As noted in a "Republica" news article, there are more than 2,600 BIPPA agreements between states worldwide and the number is increasing. The image below describes the brief knowledge about BIPPA.

Figure : BIPPA definition and Advantages

Nepal has so far practiced such agreement with six countries. On 21 October 2011, Nepal signed the BIPPA agreement with INDIA (Republic). The following table defines Nepal's BIPPA as listed in UNCTAD records.

Table: BIPPA treaties by Nepal