FDI commitments rise to Rs 10.77b

KATHMANDU, JUL 14 -

Despite the political instability, foreign direct investment (FDI) commitments have doubled in the first eight months of the fiscal year . FDI commitments rose to Rs 10.70 billion from Rs 5.63 billion over the review period, according to the Economic Survey 2012-13.

The commitments not only grew in terms of volume, but also in terms of the number of industries registered at the Department of Industry (DoI). A total of 186 industries were registered during the period—55 more than those registered in the same period a year ago, the survey showed. These industries are expected to create 9,505 jobs.

DoI Director General Dhruba Raj Rajbanshi said most of the foreign investors are attracted to Nepal for it is comparatively virgin and also has larger scope in terms of the market area. “Foreign investors have seen Nepal as an important FDI destination as they find it easy to export to India and China, the two emerging economies, from Nepal” he added.

However, Industrialist Diwakar Golchha expressed doubt over the implementation of these projects given the ‘bitter’ working environment in the country. “Although a large number of foreigners are willing to bring in their investment here, they would of course observe Nepal’s situation once they come home,” he said. He, however, termed the growth in FDI commitments positive and said the government must try to retain those potential investors.

The construction sector has attracted the largest chunk of FDI commitments (Rs 2.75 billion), followed by energy sector (Rs 2.66 billion) in the eight months. The sectors saw registration of 10 and eight new projects, respectively.

Energy sector had received the largest FDI in the same period last fiscal year , with the registration of three projects worth Rs 2.88 billion.

Manufacturing stood third, attracting Rs 2.13 billion in FDI commitments with registration of 48 projects in the review period. Agriculture gained the least FDI commitments (Rs 377.6 million) with 24 agriculture projects registered.

DoI FDI Division chief Bipin Rajbhandari said the pace of FDI inflow would increase significantly if the government could ensure incentives to foreign investors. “Implementation of the government-envisioned Nepal Investment Year would do the real magic towards attracting FDI,” he said.

Source: The Kathmandu Post