Story of Yatri in Nepal
In 2021, Yatri Motorcycles, a Nepali startup, made headlines by introducing the country's first electric motorbike, the P1. Founded by cousins Ashim Pandey and Batsal Pandey, Yatri Motorcycles sought to revolutionize Nepal’s vehicle market by producing locally designed and manufactured electric bikes. However, their journey highlights the broader challenges innovators face in Nepal, where outdated laws and bureaucratic red tape stifle innovation.
The Launch and Initial Hurdles
Yatri Motorcycles' P1 bike was a significant milestone for Nepal's EV sector. The sleek, futuristic design and the promise of sustainable transportation garnered media attention and consumer interest. Despite the initial excitement and the sale of 85 units, the company quickly encountered regulatory obstacles. Nepal’s laws, which primarily catered to imported vehicles, did not accommodate locally manufactured ones. This led to the impounding of Yatri’s bikes by traffic police, as they carried custom plates instead of government-issued ones.
Bureaucratic Red Tape
The Department of Transport Management issued interim certificates to allow Yatri’s bikes on the road while a permanent solution was sought. However, these certificates expired in November 2022 without any new directives, leaving bike owners in legal limbo. The bureaucratic inertia highlights the challenges startups face in Nepal due to unclear regulations and policies.
Government Intervention and Temporary Resolution
The situation reached a tipping point when the matter was raised in the Nepalese Parliament, prompting Prime Minister Pushpa Kamal Dahal to expedite the resolution process. This intervention resulted in a new clause in the transport directives, allowing locally-made vehicles to be registered. Yatri Motorcycles finally registered their first bike in May 2023. Despite this success, the ad hoc nature of the resolution underscored the lack of a robust framework to support ongoing and future innovations.
Broader Challenges for Innovators
The struggles faced by Yatri Motorcycles are not unique. Entrepreneurs across various sectors in Nepal encounter similar obstacles. The Global Innovation Index ranks Nepal 111th out of 132 countries regarding innovation capabilities, with a particularly poor score (121st) in government support for innovation. This lack of support manifests in several ways:
1. Poor Investment in R&D:
Historically, the Nepali government has failed to recognize the importance of research and innovation. Social entrepreneur Mahabir Pun highlighted this issue through a protest demanding increased funding for research and innovation.
2. Lengthy Business Registration:
The World Bank’s Doing Business report from 2019 indicated that starting a business in Nepal takes an average of 23 days, longer than in neighboring India. For innovative products not covered by existing laws, this process can take even longer.
3. Regulatory Uncertainty:
Entrepreneurs like Sachin Karanjit of Deerhold and Santona Malakar of Safal Partners point out that bureaucratic reluctance to deviate from existing guidelines discourages investment in new ideas. This regulatory uncertainty often leads to delays and increased costs.
The Need for Policy Reform
The resolution of Yatri Motorcycles’ registration issue is a positive step, but systemic change is necessary. A comprehensive policy framework that supports digital services and technology innovation is crucial. Clear, supportive policies would not only attract domestic and foreign investment but also change bureaucratic attitudes, fostering a more innovation-friendly environment.
The story of Yatri Motorcycles highlights both the potential and the challenges of innovation in Nepal. While the company’s perseverance led to a successful resolution, many other startups may not be as fortunate. To unlock its full potential, Nepal must invest in research and innovation, streamline bureaucratic processes, and establish clear policies that support new and emerging technologies. Only then can Nepal create a conducive environment for its innovators to thrive.
By recognizing and addressing these challenges, Nepal can pave the way for a more innovative and prosperous future.