Sunday, August 28, 2016

China pledges five times more FDI in Nepal than India

China has surpassed India in terms of committing foreign direct investment (FDI) in Nepal in recent years.
According to the latest statistics from the central bank, China has outdone India in terms of committing FDI as well as in terms of projects in Nepal.
The latest data put India on the fourth position in terms of the number of development projects pledged in Nepal and on the second position after China in terms of FDI amount pledged.
Likewise, South Korea ranks second after China, the United States of America third, India fourth and Japan fifth in terms of the number of projects they have pledged to carry out in the country.
According to the statistics of the Nepal Rastra Bank (NRB), China has pledged Rs 6.21 billion for 125 projects in the last fiscal year 2015-16 whereas India has pledged Rs 1.94 billon for 23 projects.
Likewise, the Nepal government has authorised South Korea in 55 projects, the USA for 40, Japan 18, the United Kingdom 11 and other countries 69 projects, taking the number of total projects to 341, according to the central bank report.
The report has also stated that as many as 11, 426 people will get employment directly from the authorised projects.
While the FDI pledges slumped by 77.5 per cent in the last fiscal year, the number of projects decreased by 7.3 per cent, compared to a fiscal year ago in 2014-15.
In the last fiscal year 2015-16, the Department of Industry authorised 341 foreign-funded development projects worth Rs 15.14 billion while it had authorised 368 projects worth Rs 67.42 billion in the fiscal year 2014-15.
Similarly, the foreign investors have repatriated almost Rs 1 billion less to Rs 6.25 billion in bonus in the last fiscal year 2015-16 compared to Rs 7.21 billion a fiscal year ago in 2014-15, the central bank data revealed.
The foreign companies’ profit slumped after their financial transactions were hit by the earthquake and the Indian blockade against Nepal in the last fiscal year.
The NRB approves – on the recommendation of Industry Ministry – the foreign companies repatriate bonus from their profit based on financial details and other liabilities.
In the last fiscal year 2015-16, the foreign companies related to hydro projects repatriated Rs 3.15 billion in bonus to their countries. Foreign companies have invested in the hydro projects including Khimti, Bhotekoshi in Nepal.
Likewise, companies that have invested in the communication sector have taken Rs 1.69 billion as bonus. Foreigners have invested in Nepal’s telecommunication sector including Ncell, UTL, and Smart Telecom.
According to the central bank, the companies which have invested in the industrial sector have also repatriated bonuses worth Rs 1.38 billion so far. Foreign companies including Dabur Nepal, Unilever, Arati Strips, Surya Nepal have invested in Nepal’s industrial sector.
Foreigners are allowed to repatriate the bonus in line with the Company Act and the Foreign Investment and Technology Transfer Act, 1992 with approval from the central bank.

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