Bhairahawa: Nepal’s government has reduced land rental rates inside the Bhairahawa Special Economic Zone (SEZ) from Rs 20 to Rs 5 per square meter, a move welcomed by industrialists who say it will ease operational pressures and encourage further investment.

The decision was endorsed at a Cabinet meeting on Monday. Businesses inside the SEZ had long argued that high rental fees, coupled with delays in policy implementation, were undermining competitiveness.

Ajayman Shrestha, chair of Eco Nepal Energy Industries, described the reduction as “a significant relief”, adding that lower land costs would help reduce overall production expenses. His company processes waste and discarded rubber to produce industrial oil, black carbon and steel wire.

Some incentives such as customs duty exemptions on imported raw materials, VAT exemption on exports and a 10% discount on electricity have already been in place. But industrialists said the delay in lowering rent had left many questioning their ability to continue operations.

Under the revised arrangement, firms will pay only a quarter of the previously fixed rate. Devendra Sah, managing director of the Panchakanya Group, said the delay in enforcing budget provisions had pushed some industries to the brink of closure.