Environmental Impact Assessment(EIA) is defined as a rational instrument that shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment according to Principle 17 of Rio Declaration on Environment and Development. It was introduced in USA in 1969 and 7th five year plan in Nepal. EIA is defined as a formal process used to predict the consequences of developing project on environment and is a planning tool for sound decision making.EIA can be used to minimize or prevent adverse impacts alongside the maximization of positive outcomes of a proposal. Sustainability, integrity and utility are the core values of environmental impact assessment. Participation, transparency, certainty, accountability, credibility, cost effectiveness, flexibility and practicality.EIA process should be applied to all proposals that are likely to cause potentially significant adverse impacts to the environment throughout the project cycle, beginning as early as possible in project design phase. It should address environmental, social and health risks and impacts including long term effect and sustainability.EIA has three main stages: pre study phase, actual impact assessment resulting Environmental Impact Statement(EIS) and post sudy phase with monitoring and decision making. EIA involves the following steps:1.Screening
It is the first step and done to determine which project requires full assessment study. It also involves preparation of checklist of information.2.Scoping
It is the heart of EIA and done to identify which potential impacts are relevant to access based on legislative requirement, international convention, expert knowledge and public involvement. It involves preparation of guidelines and alternative solution.3.Base line Data 
Base line data includes site location and topography, regional demography, landmarks, socioeconomic and agro ecology.4.Impact identification, prediction and evaluation
The probable impacts of the project on environment are identified or predicted and its evaluation is done.5.Mitigation
Mitigation method should be avoidance of impact, reduction of impact, restoration of impact and compensation.6.Cost benefit analysis
Project is analysed and forwarded if its cost benefit ratio is positive i.e. projects yields benefit .7.Preparation of EIS
Environment Impact Statement is prepared which should include environmental impact of proposed action, alternative of proposed action  and relation between short term and sustainable production.Methods of EIA includes Ad Hoc method , Checklist method and Matrix method. Among them Stepped matrix method is considered the best because it links actions with impacts and is good for displaying result.