KATHMANDU: The government approved foreign direct investment (FDI) worth Rs 22.68 billion in the first seven months of the current fiscal year.
According to the Department of Industry, it gave the go ahead to 241 foreign firms that pledged to inject around Rs 23 billion during mid-July and mid-February. They are supposed to provide jobs to 12,692 individuals.
Compared to the same period last year, there was a notable rise in the pledged amount in the FDI this year. The records with the Nepal Rastra Bank show that the FDI plunged to mere Rs 1.04 billion in the review period last year.
Out of the approved FDI-based firms this year, only three were related to the large scale category, while 12 were medium-scale industries and 226 were small firms.
A total of 108 firms were related to tourism. Similarly, 86 were related to the service sector and 28 were related to production. Eight were registered for information technology, five for infrastructure and four were related to agriculture.
In the last month alone, the department approved 15 such firms that expressed commitment to invest Rs 345 million in the country. These firms have pledged to employ 525 individuals.
A World Bank report says that attracting and retaining foreign direct investment will be a crucial component of Nepal’s future growth. The multilateral financial organization has pointed out political instability, deficiencies in infrastructure, stifled investment, and skills shortages as the main reasons behind the slow inflow of the FDI in the country.
Citing to attract more FDI, the government is organizing the Third Investment Summit on April 21-22. For this purpose, the government has considered reviewing several laws including the Industrial Enterprise Act 2020, Foreign Investment and Technology Transfer Act 2019, Special Economic Zone Act 2017, Forest Act 2019, National Park and Wildlife Conservation Act 1973, Lands Act 1964, and Land Acquisition Act 1977.
As of now, Nepal has approved 6,098 FDI-related firms to operate inside the country. They have pledged to invest a total of Rs 472.58 billion.