• From Rs 34.9bn in the first eight months of last fiscal, total FDI commitment has fallen to Rs 11.25bn in 8 months of this fiscal

Kathmandu, March 21 With only a week left for the Nepal Investment Summit to kick off, the investment environment in the country does not seem anything to cheer about as foreign direct investment commitment has gone down notably in recent months. Statistics unveiled by the Department of Industry, which is authorised to approve FDI below Rs 2 billion, reveal that FDI commitment in Nepal has come down by 63 per cent in the first eight months of fiscal 2018-19 compared to the same period last year. Though Nepal had received FDI commitment of Rs 34.9 billion between mid-July and mid-February in 2017-18, the total FDI commitment in the corresponding period this fiscal plummeted to Rs 11.25 billion. The aforementioned FDI commitment data also includes commitments made by foreign investors through the Industrial Enterprise Promotion Board, which is authorised to approve FDI from Rs 2 billion up to Rs 5 billion. FDI above Rs 5 billion is approved by the Investment Board Nepal. FDI commitment in terms of number of projects, however, has increased in the review period compared to the same period last year. Nepal had received FDI commitment for 194 projects in the first eight months of 2017-18, while the country received commitment for 224 projects during the same period this fiscal. DoI’s statistics show that FDI commitment has come down dramatically as the country did not receive any FDI commitment in the energy sector this year. Nepal had received FDI commitment worth Rs 22 billion in the energy sector in the first eight months of the last fiscal. FDI commitment has also come down in the agriculture and forestry sector. Though Nepal received FDI commitment worth Rs 1.8 billion between mid-July and mid-February last fiscal, FDI commitment in this sector was recorded at only Rs 88 million during the same period this year. FDI commitment has also come down in the information and technology and mineral sectors this year, according to DoI. Private sector leaders have said that investors — both domestic and foreign — are reluctant to invest in Nepal due to increasing production cost. “Though the government has been creating a favourable policy environment for business and investment, it is crucial that production cost is brought down through necessary measures to bring in investment,” said Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry.