Foreign Direct Investment ( FDI ) in Nepal increased by 95.52 percent in the first quarter of the current fiscal year. Nepal attracted foreign investment worth Rs 9.16 billion in the first three months of the fiscal year, up from Rs 4.69 billion in the same period a year ago, according to Department of Industry (DoI) statistics.
The DoI figures show manufacturing and services are the two sectors that attracted the most FDI . The manufacturing sector attracted FDI commitments worth a whopping Rs 5.551 billion, up from Rs 615.70 million in the same period last fiscal year.
The services sector that has constantly been investors’ favourite attracted Rs 2.17 billion, against Rs 1.310 billion last year. Tourism received Rs 556.09 million, agro and forestry Rs 496 million, mineral Rs 281.41 million and construction Rs 10 million.
Although FDI commitments have increased, the number of FDI projects registered at the DoI declined in the first quarter. A total of 83 FDI projects were registered at the department in the three-month period against 103 last year. In terms of project numbers, the services sector attracted 26 projects, followed by agro and forestry (21), tourism (19) and manufacturing (9).
Interestingly, foreign investment in the energy sector has declined this year, with commitments worth just Rs 100 million. In first quarter of last fiscal year, energy had attracted Rs 2.104 billion.
FNCCI Vice-president Pradeep Jung Pandey said the increment in FDI commitments is a good sign. But he cautioned these commitments might not turn into actual investment if political instability continues even after the Constituent Assembly (CA) polls. “If political parties work on the basis of consensus after the CA polls, it would send a positive message to foreign investors,” said Pandey. “If not, these commitments may not yield positive results.”
Bipin Rajbhandari, chief at DoI’s FDI department, said the country could attract more FDI if there is political stability.
“Issues like energy crisis, labour problems, and political instability are impediment for foreign investors,” said Rajbhandari. “Issues like industrial security and labour problems are directly related with the politics and political parties.”
Source: " Kantipur Daily, 15-Nov-2013"
The DoI figures show manufacturing and services are the two sectors that attracted the most FDI . The manufacturing sector attracted FDI commitments worth a whopping Rs 5.551 billion, up from Rs 615.70 million in the same period last fiscal year.
The services sector that has constantly been investors’ favourite attracted Rs 2.17 billion, against Rs 1.310 billion last year. Tourism received Rs 556.09 million, agro and forestry Rs 496 million, mineral Rs 281.41 million and construction Rs 10 million.
Although FDI commitments have increased, the number of FDI projects registered at the DoI declined in the first quarter. A total of 83 FDI projects were registered at the department in the three-month period against 103 last year. In terms of project numbers, the services sector attracted 26 projects, followed by agro and forestry (21), tourism (19) and manufacturing (9).
Interestingly, foreign investment in the energy sector has declined this year, with commitments worth just Rs 100 million. In first quarter of last fiscal year, energy had attracted Rs 2.104 billion.
FNCCI Vice-president Pradeep Jung Pandey said the increment in FDI commitments is a good sign. But he cautioned these commitments might not turn into actual investment if political instability continues even after the Constituent Assembly (CA) polls. “If political parties work on the basis of consensus after the CA polls, it would send a positive message to foreign investors,” said Pandey. “If not, these commitments may not yield positive results.”
Bipin Rajbhandari, chief at DoI’s FDI department, said the country could attract more FDI if there is political stability.
“Issues like energy crisis, labour problems, and political instability are impediment for foreign investors,” said Rajbhandari. “Issues like industrial security and labour problems are directly related with the politics and political parties.”
Source: " Kantipur Daily, 15-Nov-2013"
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