Foreign direct investment up 10pc
KATHMANDU, SEP 15 -
Foreign direct investment (FDI) in Nepal increased a meagre 10.43 percent in the last fiscal year as the result of a deteriorating domestic business environment.
According to the Department of Industry (DoI), Nepal attracted FDI worth Rs 10.05 billion in 2010-11 against Rs 9.1 billion in 2009-10.
The department said 209 companies from 36 countries were approved for foreign investment in 2010-11. The DoI’s statistics bring up some interesting facts. Despite the manufacturing sector being in turmoil, foreign investors have put in the most money into this sector.
The manufacturing sector attracted FDI worth Rs 6.13 billion followed by energy-based enterprises and tourism. Of the total proposed FDI, manufacturing accounted for more than 60 percent. In 2009-10, energy-based enterprises were the first choice among foreign investors. However, in terms of number, the service sector attracted the most investors.
With hydropower projects with foreign investment facing a series of troubles, FDI in energy-based ventures has plunged from Rs 4.74 billion to Rs 1.22 billion in 2010-11.
However, Nepal Tourism Year 2011 seems to have increased investment in the tourism sector. FDI in tourism has increased to Rs 1.18 billion in the last fiscal year from Rs 717.53 million in 2009-10.
According to the department, the manufacturing sector has attracted investors from India, the US, Korea and Singapore. They are investing mainly in clinker-based cement factories and bio-mass briquette production. “Clinker-based cement plants are among the core attractions for mainly Indian investors,” said DoI Director General Dhundi Raj Pokharel.
Even after a leading Indian joint venture has announced the closure of its garment unit, India is still the largest FDI contributor in Nepal. In 2010-11, FDI worth Rs 7 billion came from India with the DoI granting approval to 38 Indian companies. The proposed investment by these companies amounts to around 70 percent of the total FDI commitments.
Interestingly, China is fast becoming one of the major players in foreign investment. The DoI’s statistics show that FDI commitments from China crossed Rs 1 billion in 2010-11. In fact, China tops the chart in terms of number. The service sector including language and computer training and the tourism sector have attracted investment from Chinese companies. Rajesh Kaji Shrestha, chairman of the Nepal-China Chamber of Commerce and Industry, said that Chinese investors were interested in investing in both large and small projects. “Of late, hydro power, tourism and mineral-based factories are among their main attractions.”
FY >> Amount>> (in Rs billion)
Types of Industries >> 2010-11 >> 2009-10
Source: Kantipur
Foreign direct investment (FDI) in Nepal increased a meagre 10.43 percent in the last fiscal year as the result of a deteriorating domestic business environment.
According to the Department of Industry (DoI), Nepal attracted FDI worth Rs 10.05 billion in 2010-11 against Rs 9.1 billion in 2009-10.
The department said 209 companies from 36 countries were approved for foreign investment in 2010-11. The DoI’s statistics bring up some interesting facts. Despite the manufacturing sector being in turmoil, foreign investors have put in the most money into this sector.
The manufacturing sector attracted FDI worth Rs 6.13 billion followed by energy-based enterprises and tourism. Of the total proposed FDI, manufacturing accounted for more than 60 percent. In 2009-10, energy-based enterprises were the first choice among foreign investors. However, in terms of number, the service sector attracted the most investors.
With hydropower projects with foreign investment facing a series of troubles, FDI in energy-based ventures has plunged from Rs 4.74 billion to Rs 1.22 billion in 2010-11.
However, Nepal Tourism Year 2011 seems to have increased investment in the tourism sector. FDI in tourism has increased to Rs 1.18 billion in the last fiscal year from Rs 717.53 million in 2009-10.
According to the department, the manufacturing sector has attracted investors from India, the US, Korea and Singapore. They are investing mainly in clinker-based cement factories and bio-mass briquette production. “Clinker-based cement plants are among the core attractions for mainly Indian investors,” said DoI Director General Dhundi Raj Pokharel.
Even after a leading Indian joint venture has announced the closure of its garment unit, India is still the largest FDI contributor in Nepal. In 2010-11, FDI worth Rs 7 billion came from India with the DoI granting approval to 38 Indian companies. The proposed investment by these companies amounts to around 70 percent of the total FDI commitments.
Interestingly, China is fast becoming one of the major players in foreign investment. The DoI’s statistics show that FDI commitments from China crossed Rs 1 billion in 2010-11. In fact, China tops the chart in terms of number. The service sector including language and computer training and the tourism sector have attracted investment from Chinese companies. Rajesh Kaji Shrestha, chairman of the Nepal-China Chamber of Commerce and Industry, said that Chinese investors were interested in investing in both large and small projects. “Of late, hydro power, tourism and mineral-based factories are among their main attractions.”
FDI in Nepal
FY >> Amount>> (in Rs billion)
- 2010-11 >> 10.05
-
2009-10 >> 9.10
-
2008-09 >> 5.35
FDI in Nepal in 2010-11 (in Rs billion )
Types of Industries >> 2010-11 >> 2009-10
-
Agriculture >> 0.36 >> 0.01
-
Construction >> 0.15 >> 0.02
-
Energy based >> 1.22 >> 4.74
-
Manufacturing >> 6.13 >> 2.60
-
Mineral >> 0.06 >> 0.09
-
Service >> 0.91 >> 0.90
- Tourism >> 1.18 >> 0.71
Source: Kantipur
