Competition Evolution in Nepal for Open Market Economy

Madhab Raj Ghimire, LLM- Competition Law and Economics

An appellate Court of Biratnagar’s decision against transporters and truckers in eastern Nepal and finally, Supreme Court decision to quash anti competitive practice has given at least legal ensurity from judiciary side to make wider way for free and healthy competition into transport industry. To fulfill the demand of free and competitive environment, Competition Promotion and Market Protection Act has given little relief to the consumers as well as FNCCI.

An Appellate Court decision come heavily on truckers who were after odd and even number practice to freights transport to import and export the goods including basic requirement for consumers to remote areas of the country.

There is one more impractical stand taken by the Sindhuli and Kavre transport entrepreneurs and later followed their understanding to allow more than two operators in the same route. Similarly, understanding in between local chapter of FNCCI and FNNTE Khotang set up ensuring competition into transport industry.

On the other hand, there is news of LNG Gas Distributors Association, which has opposed the producers and distributers condition that distributer cannot exchange the service of gas cylinder with other brands of the products. Therefore, GDA has demanded to allow distribute to exchange any brand of cylinder to unknown company brands. The association demanded that in open market certain oligopoly is against the spirit of free market economy. Again, Association claimed that making those such stiff condition will discourage new entrants into the market and it does put barrier to new entrants to achieve the market due to dominant distribution sector. 

An Association claims regarding exchange the products for public goodness can be considered as fair. It can also be justified that access to different brands service from the distributer easily accessible to consumers. But, there will be question of security in term of so many cylinder exploded incidents into the country.

Considering both logics can be supportive to the open market segment.  But, only we need to find out whether these decision to stop cross exchange of the product  goes against the competition or not? This is crucial question to us. What we found here is, the first argument is more a less arguing for service of general interest and other hand second claim went after to meet minimum standard of competition theory. Therefore, we need to have respond and find common solution for both parts; an international and domestic transparent and competitive exercise.