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Kathmandu Sunday July 22, 2001 Shrawan 07, 2058.
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FDI approvals surge to a
record level
Post Report
KATHMANDU, July 21 - Despite shrinking global
Foreign Direct Investment (FDI) flow and worsening law and order situation of the country,
Nepal has cleared highest numbers of FDI proposals in the last fiscal year.
During the period, the Department of Industry
approved 93 new foreign investment proposals as opposed to just 68 such approvals granted
during the like period last year and the number is the highest in the post democracy era.
The total project cost, total fixed investment
and total foreign investment of the proposed projects are Rs 7.08 billion, Rs 5.56 billion
and Rs 2.58 billion respectively. All those approved projects would generate extra
employment opportunities for an additional 6,753 people once they come into operation.
Of 68 total foreign investment projects
approved by the department last year, the total projects cost and total fixed investment
were Rs 2.57 billion and Rs 1.86 billion respectively. Similarly, the total foreign
investment of the projects was 1.39 billion and altogether these projects had created jobs
for 4,659 people.
Ever since Nepal opted liberal economic policy
and started welcoming FDI, with adequate policy level reforms during 90s with an aim to
minimize the scarcity of capital and relevant technology, altogether 39 countries have
invested in 686 projects.
Up to the end of last fiscal year, the total
project cost, fixed investment and foreign investment of the projects of entire 686
project are Rs 74.2 billion, Rs 63.5 billion and Rs 18.6 billion respectively. These
investments have contributed to absorb 84,956 extra manpower.
Of the countries investing in Nepal until last
fiscal year, India continued to remain as a dominant foreign investor followed by China
and the United Kingdom. Altogether 37 Indian investments got final approval with Rs 2.9
billion as total project cost, Rs 2.04 billion as fixed investment and Rs 1.2 billion as
foreign investment. These Indian projects are expected to create employment opportunities
for 2,504 people.
Similarly, China, whose FDI in Nepal has
increased impressively in recent years to secure second position by pushing down Japan to
the third position, has received approval for 15 projects. The main cause of such surge is
the Indo-Nepal Trade Treaty 1996 under which goods manufactured in Nepal can enjoy duty
free access into the Indian market, which is the second largest consumer goods market in
Asia after China itself. "Most of the Chinese investors have come to Nepal with the
aim to penetrate the huge Indian market," an official of the department said.
Similarly United Kingdom and Japan shared the
third position with the approval of 7 projects from each country during the last fiscal
year.
Of the total foreign investment projects that
received necessary government permission last year, 3 projects have started their
operation. Similarly, 88 FDI projects have received necessary approval while two projects
have obtained license.
Manufacturing sector continued to be the
dominant attraction for the aspirant foreign investors. Altogether 49 projects proposals
related with manufacturing sector were approved last year. With 29 approvals, textile and
readymade garment topped the manufacturing sector followed by chemical industries with
seven approvals.
Despite the shrinking inflow of tourists, in
recent months, 19 FDI projects related with hotels and resorts received approval while the
number of service related industries bagging the FDI permission was 15.
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