Northern neighbours China has overtaken southern neighbour India in foreign direct investment (FDI) in Nepal with the decades of Indian dominance in investment coming to an end.
Chinese investment in Nepal is over three times more than Indian in the first 10 months of the current fiscal year. While China had already overtaken India in terms of numbers, the northern neighbor has overtaken India even in amount this year, according to the Department of Industries. A total of 108 projects have been started with Chinese investment of around Rs 29.80 billion. Only 18 projects with Indian investment of Rs 8.22 billion have been started in the period. “Chinese interest to invest in Nepal is rising. They have been expanding investment across the world. It is natural for them to prioritize investment in a neighboring country like Nepal,” President of the Nepal-China Chamber of Commerce and Industry Rajesh Kaji Shrestha said. Stating that all investment commitments will not be fulfilled even though companies have been registered, he stressed on the need to attract additional Chinese investment by creating favorable environment. He opined that Chinese investment in Nepal has not expanded as expected due to language barrier and lack of banks with relation with China in Nepal.
A total of 32 companies in the service sector have been registered in the period but the highest Chinese investment has come for energy sector, according to the department. While Rs 19.93 billion has arrived for three energy projects, it is just Rs 656 million for 32 companies in service sector. A total of Rs 685 million has arrived for 26 tourism companies, Rs 635 million for 22 in agriculture, Rs 779 million for 19 in manufacturing, and Rs 180 million for five in mining.
A total of 241 big projects have been established with foreign investment until the end of the 11th month of the current fiscal year. Total investment in these projects is Rs 197 billion, according to the department. A total of 320 medium companies and 2,361 small ones have been established with combined investment of Rs 255 billion. A total of 41 projects with Indian investment of Rs 9 billion were established in the last fiscal year. The majority of Indian investment has been focused on manufacturing, service, construction and mineral sectors. A total of 716 projects have been established with investment of over Rs 55 billion from Hong Kong and Taiwan of China. China has invested more in energy, telecommunication, construction, service and tourism sectors, according to the department. A total of 32,932 Nepalis have been employed in companies operating with Chinese investment.
A total of 684 projects with Indian investment of Rs 84 billion have been established till date. There have been commitment to employ 63,600 Nepalis in these projects but there has been no monitoring to see if the industries have been started as per commitment. A total of 79 countries have invested in Nepal. Countries like China, India, South Korea, France, Bangladesh, Japan, America, Australia and Canada have invested in manufacturing, service, energy, agriculture and mineral sectors.