Nepal only receives FDI commitments totaling Rs 29.74 bn in ongoing fiscal year

KATHMANDU: Despite the government’s repeated promises to boost production through foreign investment, the amount of foreign investment that has actually been committed to has decreased.

In just one month (mid-April to mid-May of the current fiscal year), as compared to mid-March to mid-April of that same fiscal year, investment commitments have fallen by about Rs 6 billion.

According to the Department of Industry, foreign investors only committed Rs 1.6483 billion in the following month (mid-April to mid-may), despite receiving commitments totaling Rs 7.5518 billion in a month (mid-March to mid-April) across a variety of sectors.

Foreign investment commitments have decreased when compared to last year. Foreign investors only pledged Rs 29.74 million between mid-July and mid-May of this year (a span of 10 months).

Around Rs 54 billion in commitments for foreign direct investment (FDI) were made in the most recent fiscal year (2021/22).

Currently, in the last 10 months, investment commitments totaling about Rs 30 billion have been received. In this way, it can be seen that foreign investments totaling Rs 3 billion arrive each month.

Despite the fact that 6 billion rupees in new investment have been added to this region over the last two months, it is anticipated that total investment will be significantly lower than it was in 2017.

Even though the government promised to increase foreign direct investment after policy facilitation, the global economic slowdown prevented this from happening. Foreign investors are now permitted in Nepal in a variety of industries, including manufacturing, tourism, information technology, agriculture, and forestry.

By forming a company in the office of the company registrar and obtaining approval from the industry department, foreigners can invest in small to large industries.

Although the government passed and put into effect the Foreign Investment and Technology Transfer Act to attract foreign direct investment (FDI), the investment did not rise this year.

In addition to infrastructure, there is significant room for investment in the industries of electricity, tourism, agriculture, information technology, etc.

Despite the fact that the Investment Board and Department of Industry must first approve any foreign investment before it can occur, it happens through Nepal Rastra Bank (NRB). By facilitating foreign investment, the government has adopted a strategy. The FDI is not arriving as promised, despite the investors’ promises.

The effects of the global economy have also affected Nepal, and government officials anticipate that the environment for both domestic and foreign investment will improve.

In order to promote sustainable and inclusive economic growth and the creation of jobs, the government aims to mobilize foreign capital, technology, skills, and knowledge in priority areas while assuming the private sector’s dominant position in foreign investment policy.

Stakeholders claim that in addition to administrative difficulties, the cost of land is high, business indicators are weak, worker wages are high, and investment will increase if double taxation is improved.

An investment-friendly environment will be created as part of the government’s plan to make Nepal an appealing investment destination.

The department has developed a strategy to use local resources, including modern technology, skilled labor, and foreign capital, to boost internal production and productivity.

By passing the Foreign Investment and Technology Act of 1982, Nepal was able to begin receiving FDI on a legal basis.

Through the Investment Board, investments are also approved. In order to foster an investment environment and draw foreign investment, Nepal has recently made legal, structural, and procedural reforms in the industry sector.

Officials from the government assert that they are willing to support the private sector’s efforts to raise money domestically and to use even small amounts of common people’s savings to create new capital and advance economic growth.

Fiscal Nepal |
Friday May 26, 2023, 01:37:03 PM |

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