Indian FMCG companies closely watching developments in Nepal

New Delhi: Indian FMCG companies, which have substantial investments and presence in Nepal, are closely watching the political development in the Himalayan country.

Leading Indian FMCG companies, including Dabur, Britannia, Marico, Patanjali, ITC, and Reliance Consumer have a significant presence in Nepal. Most of them operate through their local distributors or partnerships.

Some of the FMCG companies as Dabur, ITC (through Surya Nepal), Britannia, etc, have their manufacturing operations in Nepal. Companies as Reliance Consumer have a partnership with Chaudhary Group for local manufacturing and distribution.

Chaudhary Group (CG), Nepal's largest multinational conglomerate, has recently also entered into a formal joint venture agreement with the Indian food company Bikaji Foods also.

An industry executive, without disclosing his identity, said the Indian FMCG companies are closely watching the developments in Nepal. They have advised their employees to remain cautious and safe amid the political turmoil there.

Earlier on Tuesday, Nepal Prime Minister K P Sharma Oli stepped down shortly after hundreds of agitators entered his office shouting slogans, demanding his resignation for the death of at least 19 people in police action during protests on Monday, officials said.

The protesters set fire to Parliament, Singha Durbar premises, Supreme Court, political party offices, and homes of senior leaders.

Indian FMCG companies have faced a similar situation almost a year back in Bangladesh, when student unrest led to the ouster of the Sheikh Hasina government and companies as Emami, reported an impact on business.

Nuvama Institutional Equities Executive Director (Research) Abneesh Roy said its "slightly similar situation had happened in Bangladesh but we did not see any major long-term impact on Marico but Emami, etc, did see an impact," he said.

Varun Beverages (PepsiCo's bottler) Nepal business is 3 per cent of its consolidated revenue. Recently, Campa also entered the Nepal market, he said.

"Most of the listed Indian consumer staples companies operate in Nepal via Indian listed entity, so there can be a slight overhang for most names. Almost FMCG names like Dabur, ITC, Marico, HUL and others have presence in Nepal," said Roy.