Government plans industrial security force, declares industrial areas ‘Peace Zones’

Nepal's government is set to establish an Industrial Security Force and declare industrial zones as "Peace Zones" under a new Private Investment Protection and Promotion Strategy. This move comes in response to widespread vandalism, looting, arson, and theft that occurred at private industries and commercial establishments during protests on September 8 and 9, 2025. These incidents resulted in an estimated Rs 84 billion (approximately $630 million USD) in physical damages to public and private properties, according to a report by the National Planning Commission.

The strategy, approved as part of the government's governance reform action plan on March 26, aims to ensure the security and protection of industrial and commercial investments. The government anticipates that implementing this strategy will bolster confidence in the private sector and significantly contribute to Nepal's overall economic development. The productive sector in Nepal has consistently been affected by both political unrest and natural disasters, which collectively cause annual losses equivalent to around 3 percent of the country's GDP, posing a serious challenge to sustainable economic development goals.

With a long-term vision to foster economic prosperity through private sector investment, the strategy prioritizes creating a safe, stable, and reliable environment for industries and businesses. It seeks to establish robust physical and legal security measures to safeguard investments and operations. The government intends to actively discourage illegal activities such as vandalism, arson, closures, and looting within industrial and commercial areas, thereby reducing risks for investors.

In direct response to demands from the private sector, the strategy explicitly states the formation of an Industrial Security Force to protect the physical assets of industrial and commercial establishments. Existing laws related to industrial security will undergo review and necessary amendments. Furthermore, industrial areas, corridors, special economic zones, and industrial villages will be officially designated as "Peace Zones" to prevent any unwanted activities. The government will also implement a classification system for industrial and commercial establishments based on their security needs.