KATHMANDU, Jan 11: The private sector has urged the government to allow foreign direct investment (FDI) in primary agriculture production only after assessing prudently the nature of investment.
The technology that the FDI intends to bring in, the raw materials it will use and the level of exports should be assessed while allowing such investment in the primary sectors, said a joint statement released by the Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries and Nepal Chamber of Commerce, three umbrella organizations of the private sector. “The authorities should conduct a feasibility study on the advanced technology, utilization of local raw materials and giving the country maximum exports revenue by the foreign firms to allow them to invest in the sector,” reads the press statement.
The umbrella organizations of the private entrepreneurs have expressed their views amid ongoing controversies on whether or not should foreign investment be allowed in the primary sectors. On the one hand, it has been argued that FDI in this sector will take over the market shares of domestic producers to affect the daily earnings of the farmers, while on the other hand, some others opine that such FDI could help improve the productivity of the country’s agriculture business.
A Cabinet meeting held in late December decided to open the currently banned sectors of primary agriculture production for FDI. The KP Oli-led government has been blamed for tactfully amending the clause in the Foreign Investment and Technology Transfer Act, removing the restriction on the condition that such FDI funded agricultural production should allocate 75 percent of the yield for exports.
The Act enforced in 2019, had barred the FDI in primary agriculture production including poultry farming, fisheries, bee-keeping, fruits, vegetables, oil seeds, pulse seeds and milk industry, among others.