FDI commitments up 163% in 2012/13

Foreign Direct Investment (FDI) commitment amount increased by 163 percent in fiscal year 2012/2013 compared to figures of the previous fiscal year. According to the Department of Industry (Do), a total of 275 joint venture companies were registered with it in 2012/2013. They have committed to make investment of Rs 18.84 billion. New FDI commitments have come from 41 countries, promising to create 13,531 new jobs. FDI commitment in 2011/12 was mere Rs 7.14 billion. A total of 227 joint ventures were registered with the DoI during the period. Data of DoI shows China tops the list of the countries in terms of number of companies with 87 joint ventures, followed by India with 35. In terms of commitment amount, British Virgin Islands tops the list with investment commitment of Rs 4.49 billion, followed by Hong Kong and India with investment commitment of Rs 3.07 billion and Rs 2.45 billion, respectively. Similarly, this is the first time companies from Afghanistan, Argentina and Seychelles have made FDI commitments to Nepal. Spokesperson for DoI Ram Sharan Chimoriya said FDI commitments from China and Hong Kong have increased considerably as the government has prioritized hydropower projects and infrastructure development. Most of the companies from China and Hong Kong are bringing FDI in these sectors. MORE FDI IN SERVICE SECTOR Service sector has received the highest FDI commitment of Rs 7.19 billion, followed by manufacturing and tourism with investment commitment of Rs 4.43 billion and Rs 3.63 billion, respectively. In the previous fiscal year, energy-based industry had received the highest investment commitment with Rs 2.99 billion, followed by service sector with Rs 1.99 billion investment commitment. Pradeep Jung Pandey, vice president of the Federation of Nepalese Chambers of Commerce and Industry, attributed labor problem and acute power shortage behind rise in investment commitment in service sector compared to the manufacturing sector. “Investors prefer sectors like hotel, transport, trading and others where their investment is safe over manufacturing sector,” Pandey said, adding, “The trend shows we are becoming a dependent economy. No wonder, the contribution of industry sector in GDP is decreasing.” Pandey further urged the government to make environment conducive for manufacturing industries. Foreign firms started investing in Nepal after the country embraced liberal economic policy in the 1990s. So far, 2,610 firms from 77 countries have made investment commitment Rs 93.99 billion in Nepal. However, DoI do not have any information about work progress of those joint venture firms. Chimoriya said they monitor industries only upon getting complaints.