Nepal | May 25, 2020

West Indies tops FDI inflow

Himalayan News Service
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Illustration: Ratna Sagar Shrestha/THT

Kathmandu, June 12

Nepal received a total of Rs 137.6 billion in foreign direct investment till mid-July 2016, with Rs 62.78 billion (45.6 per cent) investment coming from West Indies — a cluster of island countries considered as tax havens.

A first of its type report on the stock of FDI in Nepal unveiled today by Nepal Rastra Bank revealed that the largest amount of investment was brought in from West Indies out of the 39 countries that had FDI in Nepal till mid-July 2016. The entire amount of FDI to Nepal from West Indies, which is the sum of the paid-up capital, reserves and foreign loans from the direct investor, was in the services sector, according to the NRB report.

Such investment from West Indies in Nepal stood at Rs 46.3 billion till mid-July 2015, which accounted for 43.6 per cent of the Rs 106.17 billion FDI inflow in the country till the time.

Top five investors (till mid-July 2016)

West Indies

Rs 62.78bn

India

Rs 27.25bn

China

Rs 10.84bn

Singapore

Rs 7.13bn

Ireland

Rs 5.8bn

Source: Survey report on FDI in Nepal, NRB

Investment Board Nepal officials said Nepal had received a large amount of investment from West Indies in telecom and hotel sector since 2012.

As per the NRB report, India and China were in the second and third positions, respectively, in terms of FDI inflow till mid-July 2016. While FDI inflow from India was Rs 27.25 billion, accounting for 19.8 per cent of total FDI inflow, investment from China was at Rs 10.84 billion and accounted for 7.9 per cent of the total FDI inflow. Singapore, Ireland, Australia, South Korea, Bangladesh, the United Kingdom and the United States were the other top nations recording highest FDI inflow in Nepal in ascending order.

Among the top 10 countries for FDI inflow, India, China, Singapore and South Korea had the highest investment in the industrial sector, while the remaining countries had the investment in the service sector, shows the NRB report.

As per the NRB report, the Rs 137.6 billion FDI stock in Nepal till mid-July 2016 was an increment by 29.7 per cent as compared to FDI stock till mid-July 2015. Similarly, the mid-July 2016 FDI stock figure was 6.1 per cent of the country’s gross domestic product, which was five per cent of GDP in mid-July 2015. “The increase in the stock of FDI was mainly driven by the uptick in reserves over the previous fiscal year,” states the report. The reserve stood at Rs 90.95 billion in mid-July 2016 as compared to Rs 68.35 billion in mid-July 2015.

However, India had the highest FDI in Nepal in terms of paid-up capital owned by foreign partners. As of mid-July 2016, the paid-up capital of Indian-invested firms was recorded at Rs 11.2 billion, followed by China (Rs 7.3 billion), Singapore (Rs 3.5 billion), Ireland (Rs 3.1 billion) and South Korea (Rs 2.8 billion).


A version of this article appears in print on June 13, 2018 of The Himalayan Times.


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