Foreign investors throng Nepal

With a gradual improvement in the political climate in the last one year and conclusion of peace process in sight, many foreign investors are in a rush to reach out to Nepal.
"As the end of the road is on sight, we can expect more investors thronging to the country as it offers vast opportunities," said Investment Board chief executive Radhesh Pant, who is busy meeting the delegates and explaining them what the country can offer.
With the establishment of Investment Board, the country is expected to attract more potential investors not only in the hydropower sector — that is one of the most lucrative sectors for the investors — but also in service sector that has been witnessing growth in recent years, he said.
According to the Central Bureau of Statistics, hotels and restaurant sector is expected to grow by 8.28 percentage points in the current fiscal year compared to the last fiscal year due to sustained increase in the flow of tourists in the last fiscal year. The tourist inflow has seen sustained growth this fiscal year too.
Though encouraged, the private sector, has been suggesting the government to offer incentives to make Nepal more competitive investment destination.
"The government must offer incentives to attract more foreign investments," said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Suraj Vaidya.
The government should ease policy bottlenecks and offer incentives to compete with other investment attracting countries and even with the Indian states that have been offering attractive packages to the investors, he said, adding that the private sector is confident that the government will announce competitive incentives in the budget for the next fiscal year 2012-13 that is also Nepal Investment Year.
"More investment will create more employment opportunities that would help government achieve its target of sustainable growth that could reduce social unrest in the future," he added.
The country has witnessed inflow of foreign direct investment (FDI) worth Rs 5.61 billion in the first seven months of the current fiscal year, according to the central bank. "In the same period in the last fiscal year, it stood at Rs 4.84 billion."
Similarly, the Department of Industry had approved 209 joint venture projects with a foreign direct investment commitment of Rs 10.05 billion in the fiscal year 2010-11. A fiscal year ago, the foreign direct investment stood at Rs 9.1 billion. "The FDI recorded 10.4 per cent more with 38 more joint ventures than in the fiscal year 2009-10."
"Out of 209 registered projects in the last fiscal year, some 88 were service-related, 47 tourism, 39 manufacturing, 23 agriculture, six energy, five mines and one construction-related projects," the data revealed, adding that China stood first with 69 projects followed by India with 38 and South Korea with 18 projects that were expected to generate employment opportunities for some 10,887 people.