Kathmandu: Nearly a dozen trade unions have warned of an indefinite strike nationwide from July 31 over a controversial hike in wages even as an Indian trade delegation is in Kathmandu to scour business opportunities and a business body announced an e-guide for Indian investors.
A faction of the trade union affiliated to the ruling Maoist party and owing allegiance to deputy party chief and former finance minister Baburam Bhattarai as well as nearly 10 other trade unions loyal to ethnic parties from the Terai plains are on the warpath to pressure industries into accepting a wage hike the latter says is illegal and currently the subject of a legal battle.
The threat comes as a matter of special concern for nearly 150 Indian joint ventures and subsidiaries in Nepal, many of whom have their production units in the Terai.
The militant trade unions have given industries till Thursday to raise minimum wages to NRS 6,200.
The hike became a matter of controversy after the government, under pressure from trade unions, overlooked an earlier pact it had signed with the three largest trade unions, that pledged to increase minimum wages to NRS 6,100 and at the same time, allow employers to hire and fire as well as dock pay for illegal strikes.
The no work, no pay has been an especially vexing issue for ITC`s joint venture in Nepal, Surya Nepal, whose garments factory was vandalised by unruly workers, mostly women, demanding pay for the time they had been on strike.
The new agreement was challenged by industries and the Federation of Nepalese Chambers of Commerce and Industry, Nepal`s largest body of trade organisations, filed a petition against it in court.
The Supreme Court is yet to deliver its final verdict on the row.
The new labour unrest comes even as the Nepal India Chamber of Commerce and Industries unveiled an e-guide for Indian investors to do business in Nepal.
While launching the e-guide, Doing Business in Nepal: A guide to Indian investors, in Kathmandu Tuesday, the Indian Ambassador to Nepal, Rakesh Sood, said that Indian investment in Nepal had dipped considerably in the last five years.
The strike threat also comes at a time a Confederation of Indian Industry team is in Kathmandu to explore investment possibilities.
India remains land-locked Nepal`s biggest trade partner and investor.
Bilateral trade during Nepali fiscal year 2009-10 (July 16 - July 15) was $3.46 billion with Nepal`s import from India amounting to $ 2924.0 million and exports to India aggregating $538.1 million. In the first eight months of fiscal year 2010-11, Nepal`s total trade with India was about $2.76 billion; Nepal`s exports to India were about $396.0 million; and imports from India were about $2,366.5 million.
Besides militant trade unionism, opaque laws, lack of investment protection and heavy power cuts during the dry seasons, Indian investment in Nepal has also been harmed by political instability and the persistent attack of Indian joint ventures by the Maoists, the largest party in the republic.