When you read “Construction with Government of India’s financial assistance of Rs 4.41 crore” in Nepal, you are reading about HICDP.
HICDP stands for High Impact Community Development Project. It is India’s flagship development partnership program in Nepal.
But how does it actually work? Who does the work?
How HICDP Work: 4-Step Process
Step 1: Proposal from Nepal
A local body in Nepal – like a Rural Municipality, Municipality, or District Coordination Committee – identifies a need. It could be a school building, hospital, cold store, road, or drinking water project. They send a proposal to the Embassy of India in Kathmandu.
Step 2: Funding by Indian Embassy
The Embassy of India examines the proposal and approves financial assistance. The budget is typically up to NPR 5 Crore per project (Earlier it was called Small Development Projects). The money is grant – Nepal does not have to return it.
Latest Example: On 14 Oct 2026, India approved NPR 4.41 crore for a Cold Store Building in Laligurans Municipality, Ward No. 2, Tehrathum District. This is the 2nd HICDP in Tehrathum.
Step 3: Implementation by Local Municipality – Not Indian Company
This is the most important point. HICDP projects are implemented through the local Nepalese municipality.
As per the official press release: “will be implemented through the Laligurans Municipality”
The Indian Embassy does NOT bring L&T or Tata Projects from India. Instead:
- The Municipality forms a User Committee
- It floats a local tender in Nepal
- A local Nepali contractor / construction company is selected as per Nepal’s Public Procurement Act
- The Municipality supervises the construction
Step 4: Monitoring
The Embassy of India monitors the progress through regular field visits, but the ownership remains with the Nepalese local government.
Why This Model?
- Supports Federalism: Nepal adopted federalism in 2015. This model empowers local governments.
- Local Jobs: Work goes to Nepali contractors, creates local employment.
- Sustainability: After completion, the asset (school, cold store) belongs to the Municipality, which maintains it.
HICDP Projects Impact
As of 2026, India has completed over 500 HICDPs across all 7 provinces of Nepal – from B.P. Koirala Foundation buildings to Nepal Bharat Libraries, schools and health posts.
The Tehrathum cold store is a perfect example. Once completed, it will help farmers in Koshi Province store their produce and build a sustainable agricultural business model, as appreciated by Mayor Arjun Mabohang.
So next time you see a foundation stone by Indian Embassy in Nepal, remember – India pays, Nepal’s Municipality builds.
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