Anuj Agrawal is the director of Vishal Group, a diversified business house involved in the manufacturing, trading and service industry. It also oversees United Telecom, which plans to launch new phone systems in
Kathmandu soon.

Business must be difficult in times like these.
It has certainly been a difficult time and not just for business. We want a peaceful solution to the conflict. From the business point of view, there has been substantial direct negative impact but perhaps even more important is the general sentiment, which has become rather pessimistic.

Since your business has to do with imports, what was the impact of the recent Maoist-imposed blockade?
The impact was substantial in all the sectors we are involved in. Manufacturing and trading suffered due to goods becoming stationary. Even service sectors, such as life insurance suffered because agents could not move and exchange of policies came to a standstill.

What about production of steel, how much has the insurgency hampered it?
There has been direct impact with plants having to shut down periodically. Construction activity and infrastructure projects (with the exception of Kathmandu) have slowed down across the country, resulting in a much lower demand for steel.

Nevertheless, has the purchasing capacity of consumers risen, especially in urban areas?
We are starting to see a two-tier market economy in Nepal. There are consumers whose purchasing capacity for high-end goods is rising and luxury or indulgence goods are seeing strong demand. Then there is the low tier consumer whose purchasing power seems to have shrunk, particularly outside Kathmandu.

Where does Nepal stand among steel manufacturers?
Nepal manufactures only front-end steel products. Our steel sector is focused on serving the local demand with limited exports of GI pipes to India. It's not fair to rank Nepal against countries that have core steel manufacturing capacity. From the local market point of view, Nepal's steel manufacturing ability is quite good with several plants producing world-class steel structures.

Is the government acting as a facilitator or is it creating hassles?
The government is doing its best but is faced with severe constraints especially when it comes to security issues. What we can learn from international experience is that gradual lowering of duties is the way forward. The government also needs to generate a base basket of revenues to meet national demands. It is trying hard to balance the need for progress with the sheer essence of generating revenue.

Do you plan to expand UTL's phone services?
We continue to evaluate options. Clearly there are opportunities as this is a fast moving sector but at this point, there are no concrete plans.

Where do you see the Nepali economy headed?
The potential for economic turnaround in Nepal is tremendous. Just a few right steps can make Nepal a wonderful investment destination. There are several areas of core competence in Nepal such as hydropower and tourism, where Nepal can achieve success.