KATHMANDU, Dec 17: Foreign investment commitment to Nepal has begun to rise after a period of decline, which was attributed to the global financial crisis. In the past month alone, foreign investment in Nepal's industries has surged by 41.83 percent, signaling a positive turnaround.
According to the Department of Industry (DoI), during the first quarter of the current fiscal year 2023/24 (Kartik, mid-October to mid-November), a total investment commitment of Rs 1.8 billion was received. Notably, in the subsequent month of Mangsir (mid-November to mid-December), this commitment increased significantly to Rs 2.56 billion.
The DoI reports that these investments include commitments for new industries, encompassing Share Purchase Agreement (SPA), Share Subscription Agreement (SSA), and Technology Transfer Agreement (TTA). In the month of Mangsir alone, the Department recorded 21 new foreign investment commitments. November witnessed investment commitments amounting to Rs 2.25 billion for these 21 new industries. Additionally, two SPA/SSA commitments, valued at Rs 305.7 million, and three industries under TTA also received foreign investment commitments during this period.
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In Kartik, foreign investment commitments totaling Rs 1.8 billion were secured. The DoI notes that these commitments spanned 42 industries, including 27 new ventures. For the first five months of the current fiscal year, Nepal has seen foreign investment commitments reach an impressive Rs 24.35 billion.
This surge in foreign investment is expected to have a positive impact on employment. Approximately 10,120 individuals are projected to gain employment from foreign investment within the initial five months of the current year. Specifically, the Department anticipates that 1,350 jobs will result from investment competition in Mangsir alone. Cumulatively, investments made thus far are estimated to generate employment opportunities for 319,217 people.
Meanwhile, even in Mangsir, there were no investment commitments in large industries. According to the Department of Industry (DoI), the majority of investment commitments were observed in small industries.
The DoI reports that foreign investment commitments were received for 19 small and seven medium-sized industries in Mangsir. However, over the course of the first five months of the current fiscal year, commitments have been made for 189 small, seven medium, and three large industries.
Tourism remains a significant focus for foreign investment in Nepal, with 38 percent of investment commitments in Mangsir directed towards the tourism sector. Over the five-month period of the current year, this sector has accounted for 48 percent of total investment commitments, with commitments made for 95 industries in this category.
Similarly, the second-highest level of investment in the first five months of the current year has been in the service sector, amounting to 37 percent of total commitments. Investment commitments have been made for 74 industries in this sector, and the DoI notes that there are commitments for six industries in this category in November as well.
