KATHMANDU, Nov 21: Nepal received a commitment for foreign direct investment (FDI) worth Rs 22.08 billion in the first four months of the current fiscal year.
The pledged FDI is almost double the amount proposed in the same period last year. During mid-July and mid-November last fiscal year, the country received a commitment for FDI worth Rs 12.22 billion.
The records with the Department of Industry (DoI) show that foreign investors pledged to inject the aforementioned amount in 223 firms that included share purchase agreement, share subscription agreement and technology transfers. Of the total number, the investors showed interest to set up 178 new firms during the period of mid-July and mid-November. They pledged to provide employment opportunities to 8,770 individuals.
The foreign investors have looked forward to injecting their money mainly in the small enterprises while the attraction for the big firms is negligible. In the review period, FDI commitments were made for 170 small enterprises while the investment was sought only for three big firms.
In terms of sector-wise investment, the tourism industry drew the main attention of the foreign investors. According to the DoI, the commitments for 86 new firms related to tourism business were proposed. It accounts 48 percent of the pledged numbers.
Service sector stood second in the row. During the review period, the FDI was pledged for 69 firms (39 percent) related to the service sector. Likewise, the DoI registered FDI commitment for 12 firms in manufacturing, five firms in information technology, four firms in infrastructure development and one mining related firm.
According to the DoI, the country received the FDI of Rs 1.80 billion in the past one month. The investment is set to be injected in 42 firms that included setting up of 27 new firms.
As of now, the FDI of Rs 468.32 billion has been pledged in 6,037 firms. They have shown commitment to offer job opportunities to 317,867 people.
The records with Nepal Rastra Bank show that the realization of FDI is pretty low compared to the pledged amount by the foreign firms. Last month, the government announced to streamline the process by approving foreign investments of up to Rs 500 million through the automatic route in order to simplify the procedure for foreign investors.
Source : Republica