BILATERAL RELATIONS


Nepal-United Arab Emirates Relation

  1. Political Relations

With the growing importance of the United Arab Emirates in the Gulf region and the world as well, Nepal looks forward to strengthening its relation with the UAE in a newer heights in the days to come.

  • Diplomatic Relations

Nepal and the United Arab Emirates have established their diplomatic relations on 22 January 1977. Nepal has established its residential embassy in Abu Dhabi at the Charge d’ Affairs level on 11 April 2004 and upgraded at the Ambassadorial level on 21 December 2007. The UAE has established its residential mission to Nepal on 10 May 2016 at the Ambassadorial level.

  • Shared Values

The two countries have been enjoying friendly and cordial relations based on their mutual understanding and cooperation. As the member of the United Nations and Non Alignment Movement, both the countries share common views on major international issues. Moreover, both the countries have significantly contributed in the peacekeeping forces of the United Nations thus maintaining a similar status on world peace and cooperation and fight against terrorism and threats to the world peace.


  1. Economic Relations
  •  Trade and Aid

The UAE is the third largest trading partner of Nepal, though the later has a huge trade deficit vis-à-vis the former which is shown in the list below:

Value in: USD ($)

Year/Trade Value 2012 2013 2014 2015 2016 (Upto June)
Export 3,808,789 3,610,396 4,027,777 1,722,276 335,095
Import 411,948,854 402,032,785 431,363,891 307,078,501 87,910,500
Balance -408,140,065 -398,422389 -427,336,114 -305,356,225 -87,575,405

Source: TEPC, Nepal, 2017

Major exports from Nepal to the UAE include Woolen shawls, Scarves, Carpets, Paan-mashala, chewing tobacco etc. whereas Gold, Silver, Petro-bitumen, Lubricating Oil etc. are the major importable items from the UAE. Nepal has been exploring the trade market in the UAE in recent years and it might be a lucrative market for the Nepalese cereals, food items and herb-products.

The UAE is the largest donor of Official Development Assistant (ODA) in terms of its GNI. It exceeded the Organization for Economic Cooperation and Development’s Development Assistance Committee (OECD DAC) target of 0.7% ODA/GNI and contributed 1.34%, 1.26% and 1.09% as ODA/GNI in 2013, 2014 and 2015 respectively. During the devastating earthquake of 25 April 2015, the UAE provided humanitarian aid to Nepal through its official channels and Emirates Red Crescent also. As the UAE provides bilateral development cooperation in the sectors of economic infrastructure, education, health etc, Nepal can benefit from its gracious support in rebuilding of Nepal after the devastation of Earthquake.

In between 2010-2015 AD, the aid provided by the UAE can be listed as below:

Year in AD
Aid Amount in AED 2010 2011 2012 2013 2014 2015
699,771 216,685 908,346 1,429,722 5,989,599 8,250,151
TOTAL for 6 Year: AED 17,474,280

Source: UAE MOFAIC, 2016

The foreign aid provided by the UAE to Nepal in 2015 can be categorized as follows:

Figure in AED

Sectors/Areas Assistance ODA Donor/s
Biosphere and Biodiversity 176,767 176,767 Md. Bin Zayed Species Conservation Fund
Education 1,229,646 869,577 Dubai Cares and Dar Al Ber Society
Humanitarian Aid & Emergency Relief 6,843,738 4,019,411 Khalifa Bin Zayed Al Nayhan Foundation, Emirates Red Crescent & Md. Bin Rashid Al Maktum Humanitarian & Charity Establishment
TOTAL 8,250,151 5,065,755 Assistance provided by 6 institutions

Source: UAE Foreign Aid, 2015

However, the Nepal Government has to coordinate with the Government of the UAE and its bodies like Abu Dhabi Fund for Development (ADFD) and Abu Dhabi Investment Authority (ADIA) which are the major donor for assistance and ODA and attracts more aid for its development as the UAE has provided 92% of its total assistance in the development projects in comparison to 6.7% and 1.3% as humanitarian aid and charitable assistance respectively in 2015 AD.

  • Investment and Nepalese Businessmen

Nepal offers a very conducive and favorable environment for foreign investment with comparatively cheaper cost of production and low labor cost. The UAE has made investment in Nepal but its very nominal considering its capacity to invest which is shown in the figure below:

Rs. Million

Fiscal Year No. of Industry(ies) Total Capital Invested No. of Employment
In 2013/14 1 7 14
Up to 2013/14 13 4,797.57 1,635

Source: doind.gov.np, 2015

Nowadays, Nepalese businessmen have also been investing in the UAE in different sectors like real state, travel and tourism, hotels and retail business also. The Nepalese have made millions dollar of investment in the UAE rather than the UAE investors made in Nepal. Nepali Business Council, Dubai has recently been registered in the Dubai Chamber of Commerce hence providing the platforms for Nepalese businessmen to explore avenues and invest in different sectors and parts of the country.

  • Foreign Employment and Remittance

The UAE is a home for the expatriates from around the world which roughly constitutes 85% of its total residents in the country. It is one of a five major destination countries for the Nepalese migrates to work and live. As of today, about 12% of the total migrants from Nepal live in the UAE. Likewise, Nepal is one of the most important sources of labor destination for the UAE as well, constituting the fifth largest group of expatriates in this country. Nepalese work in the field of Security, Driving, Sales, Hospitality, Construction, Cleaning etc. Provided that Nepal trains and sends the semi-skilled and skilled labor-force in this country, there is lots of demand for the Nepalese workers for their hard work, sincerity and performance at par excellence in their fields.

Nepal is a remittance based economy as it constitutes one fourth of its total GDP. The contribution of the remitters from the Gulf Countries like the UAE for sustaining the economy of the country is praiseworthy. The UAE is the fourth largest source of remittance income for Nepal. As it’s illegal to send transaction money through Hundi/Hawala to Nepal, most of the remittance from the UAE to Nepal flows through banking channels like commercial banks, remittance companies and money transfer agencies. In the F/Y 2013/14, $535.502 million has been sent as remittance money from the UAE to Nepal through banking channels only.

  • Tourism and Aviation

Both Nepal and the United Arab Emirates are the most potential touristic destination countries with their own distinct qualities. Comparatives to its potentials, very few Emiratis visit Nepal despite the enormous attractive destinations in Nepal. Though the Emiratis are eligible to get visa on arrival to Nepal and prefer to do so, the official data of the Embassy of Nepal, Abu Dhabi shows that 3,831 visas were issued in between 2013-2016 AD. The scaling up of the Mt. Everest by the UAE Armed Forces Expedition team in 19 May 2016 has significantly been helping to promote the tourism of Nepal. The number of Nepalese visiting the UAE has also been increasing significantly in recent years.

The UAE is one of the oldest destinations of Nepal Airlines however; it suspended its flights for some time. Three UAE based airlines, Etihad, Fly Dubai and Air Arabia have been operating about 60 flights a week to Nepal. Almost 170 flights a week have been operating in between Nepal and the UAE with the passenger movements of more than 1 million a year. In view of the growing passenger movements and the preparation by the Emirates and RAK Airlines to operate their flights to Nepal, resuming regular flights by Nepal Airlines since August 2016 has definitely been a boost for promoting tourism in Nepal.


  1. Agreements

Nepal and the UAE have been working on various bilateral issues and finalize them in the form of agreements. So far, they have signed following MoUs:

  1. Air Service Agreement, 1999 (first revised in 2007; and again amended in 2013)
  2. Loan Agreement, 2006 (recruiting Nepalese Ex-armed forces in the UAE the periodic review made in every 3 years and scraped since February 2016 )
  • Memorandum of Understanding in the Field of Manpower, 2007
  1. Memorandum of Understanding in setting up Joint Committee, 2010

Moreover, the FNCCI and UAEFCCI have signed an MoU in April 2010 to promote bilateral trade and commerce. Some other agreements and MoUs are in pipeline to be finalized and signed by the two governments such as:

 

  1. Enhanced Air Service Agreement
  2. Bilateral Agreement on Promotion and Protection of Investment (BIPPA)
  • Bilateral Agreement on Avoidance of Double Taxation (DTA)

(Agreement on the Exemption from Visa Requirements for the Holders of Diplomatic and Official/Special Passports-Nepal’s Concern)


  1. Bilateral Visits

    Visits from Nepal

Some recent high level visits from Nepal to UAE are as follows:

  1. The Prime Minister of Nepal, Mr. Pushpa Kamal Dahal ‘Prachanda’ paid an official visit to the United Aram Emirates from 14-17 January 2016 at the invitation of His Highness Sheikh Mohammad Bin Zayad Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and participated in the World Future Energy Summit held in Abu Dhabi. Hon. Janardan Sharma, Ministry of Energy also visited the UAE from 14-20 January 2017 to participate in the 5th World Future Energy Summit.
  2. A Five member delegation led by the Speaker of the Legislative Parliament, Rt. Hon. Onsari Gharti paid a five day visit to the UAE from 10-14 December 2016 to participate in Global Summit of Women’s Speaker of the Parliament held at Abu Dhabi from 12-13 December 2016.
  • Mr. Bishnu Prasad Lamsal, Secretary at the Ministry of Labour and Employment participated in Abu Dhabi Dialogue Senior Officials Meeting held at Dubai from 11-12 May 2016.
  1. Deputy Prime Minister and Minister for Women, Children and Social Welfare Hon. Chandra Prakash Mainali visit UAE from 15-18 November, 2015 to participate in We Protect Children Online Summit.
  2. Hon. Khagraj Adhikari, Minister for Health and Population paid an official visit to UAE from 16-19 March 2015.
  3. Chief of Army Staff Mr. Gaurav Shamser Rana visited UAE to participate in IDEX from 22-26 February 2015.
  • The then Prime Minister Rt. Hon. Sushil Kumar Koirala and Minister for Foreign Affairs Hon. Mahendra Bahadur Pandey visited UAE from 19-20 October 2014 en route to New York following their participation in the 69th UNGA.
  • Rt. Hon. Khilraj Regmi, Chairman of the Council of Minister of Nepal visited the UAE on 25-26 April 2014.
  1. The Deputy Prime Minister and Minister for Foreign Affairs Hon. Narayan Kaji Shrestha visited UAE from 3-4 October 2012 en route to New York following their participation in the 67th UNGA.
  2. Deputy Prime Minister and Minister for Foreign Affairs Hon. Sujata Koirala paid an official visit to UAE from 22-26 June 2010.
  3. The Ministers for Labour and Transport Management, Hon. Aftab Alam and Hon. Lekh Raj Bhatta visited UAE from 26-30 August 2009 and 15-18, 2009 respectively.
  • Then Crown Prince Paras and Crown princess Himani visited the UAE in April 2006.
  • Then King Gyanendra Shah and Queen Komal Shah paid a friendly visit to the United Arab Emirates from June 18-22, 2005. Hon. Ramesh Nath Pandey, Minister for Foreign Affairs visited the UAE in March 2005.
  • Then Minister for Information and Communication Dr. Mohamad Mohsin visited the UAE in 2004. The delegation included then Minister of State for Foreign Affairs Dr. Prakash Sharan Mahat and Minister of State for Labour and Transport Management Mr. Urba Dutt pant.
  1. Dr. Prakash Sharan Mahat, then Minister of State for Foreign Affairs visited United Arab Emirates in November 2004 representing the Government of Nepal in the funeral of the Late President of the United Arab Emirates, His Highness Sheikh Zayed bin Sultan Al Nahyan, who died on 2 November 2004.
  • Late Qeen Aisharya and late prince Nirajan paid an official visit to the UAE in 1995.

Visits from UAE

Some high level visits from the UAE to Nepal are as follows:

  1. His Highness Sheikh Abdullah Bin Zayed Al Nahyan, Minister for Foreign Affairs and International Cooperation visited Nepal on 10 May 2016 during the inauguration ceremony of UAE Embassy to Nepal.
  2. His Excellency Mr. Humaid Rashid Khalifa Deemas Al Suwaidi, Assistant Under-Secretary of Ministry of Labour, UAE, unofficially, visited Nepal in December 2014.
  • H.E. Mr. Saqr Ghobash Saeed Ghobash, Minister of Labour visited Nepal on 28-29, October 2013.
  1. His Highness Sheikh Abdullah bin Zayed Al Nahyan, Minister for Foreign Affairs of the United Arab Emirates paid a one day visit to Nepal on 11 June 2009.
  2. H.E. Mr. Rashid Ahmed Bin Fahd, Minister of Environment and Water visited Nepal on 15 May 2009.
  3. His Excellency Mr. Saqr Ghobash, Minister of Labour visited Nepal in 2007.

 


  1. Future Prospects

Both Nepal and the UAE have shared values and commonalities in their relations and the combined duties towards the world polity. We have been enjoying excellent bilateral relations and this would be at its zenith as the UAE has opened their residential mission to Nepal and pave the way for more engagement not only at government level but also at the level of people to people relations, business and cultural engagement. The current development pace of the UAE would not have been possible unless the contribution made from the Nepalese labors alike. Likewise, the remittance the migrants earned here has significantly contributed in the living standards of their families back in Nepal. Therefore, the relation as a labor sending and receiving countries has to be redefined to the optimum benefit of both the countries and the workers.

As a member of many multilateral institutions, both the countries have been contributing in fighting against terrorism, reducing poverty and uplifting the living standards, reducing the hazards of climate change and development of the nations. Therefore, both the countries need to make a common stand in international forum in such multiple issues. Moreover, Nepal has to tap the investment, innovation and tourists from the UAE for its development like the UAE attracts Nepalese Diasporas in diverse fields. We have to increase our export volume so as to reduce the trade deficit. We have to initiate high level visits and engagement, youth exchange programs, provide trainings and scholarships in the field of expertise, visa simplification and exemption for the diplomats and government officials etc. In nutshell, the constant engagement in political, cultural and business front, sharing of information in any critical matters and common view on major regional and world issues will make the bilateral relation more fruitful in the days ahead.