Falling FDI in industry, rising in service sector

According to the report, 62.6 percent of the total FDI was invested in the industry sector in the previous financial year, but this share decreased to 59.7 percent in the financial year 079/80. But in the service sector, the share of foreign investment is increasing. According to this report, 37.3 percent of the total FDI in the previous financial year was invested in the service sector, while in the financial year 079/80, this share increased to 40.2 percent. But the share of foreign investment in the agricultural sector has not changed.

In the previous financial year, 0.1 percent of the total FDI was invested in the agricultural sector, but this share has not changed in the financial year 079/80. In recent years, the attractiveness of investment in the service sector is increasing in Nepal. Experts say that foreign investment will also be concentrated in the sector where domestic investment increases, so the share of foreign investment in the manufacturing sector including industry will decrease and the service sector will increase.

It seems that 59.7 percent of foreign direct investment in Nepal is in the industrial sector and 40.2 percent in the service sector. Under the industrial sector, there is 30 percent foreign investment in the hydropower sector and 29.4 percent in the manufacturing sector," the report said. "It seems that 26 percent of the total foreign direct investment is in the service sector in banks and financial institutions and insurance companies."

In recent years, the report has pointed out that the amount of foreign direct investment (FDI) coming into Nepal is more than the foreign direct investment (FDI) going out of the country during the same period. According to the people, a total of 6 billion rupees of foreign investment was received in the financial year 079/80, and 17 billion 33 million rupees were withdrawn from the country in the same year under the title of dividend of foreign investment, according to the survey report on foreign direct investment 079/80.

Even though FDI comes from 58 countries of different regions in Nepal, the amount of foreign investment that goes out every year is very high. According to the National Bank, a total of 238 sample companies were selected and surveyed in the financial year 079/80 in Nepal with direct foreign investment. According to the results obtained from the

survey, the total balance of foreign direct investment in Nepal by the end of the financial year 079/80 is 2 trillion 95 billion 500 million. Such investment has increased by 11.8 percent in the financial year 079/80 as compared to the previous financial year. It is mentioned in the report that out of the total foreign investment of that period, the share of paid-in capital is 52.8 percent, reserves are 33.7 percent, and the share of loans is 13.5 percent.

Every year, the FDI that enters Nepal is only for the same year, but the money that goes out as dividends during that period is from all the FDI so far, the Rastra Bank has said that the money that goes out may be more than the money that comes in. "The FDI that came in the previous financial year is only for the last 12 months," said Prakash Shrestha, executive director of Rashtra Bank and member of the National Planning Commission, "but the dividend that came out during that period is from all the foreign investments in Nepal." Therefore, the outgoing dividend is more than the incoming FDI. According to the

report, 58 countries have foreign direct investment in Nepal as of mid-June 2018. Out of this, the most from India is one billion three billion 45 million (35 percent), from China 35 billion 46 million (12 percent), from Ireland 22 billion 62 million (7.7 percent), from Australia 19 billion 60 million (6.4 percent). And 18 billion 81 billion (6.4 percent) foreign direct investment from Singapore is mentioned in the report.

The report shows that West Indies share 4.9 percent, South Korea 4.7 percent, UAE 4.2 percent, America 4.1 percent, Hong Kong 2.4 percent and other countries 12.2 percent.

Although it has been almost seven years since the country went into federalism, the important dimensions of the financial sector, including financial access, credit utilization, and industry operations, seem to be focused on rhetoric. It is 59.7 percent of the total investment of the province.

Similarly, Gandaki is the second province with a 15.1 percent share, and the third is Koshi province with a 14.7 percent share. After that, it seems that there are foreign investments in Madhesh, Sudurpaschim, Lumbini and Karnali respectively.

"Capacity utilization of foreign-invested manufacturing companies has been found to be 60.69 percent, while return on equity (ROE) has been found to be around 11.61 percent," the report states. In the financial year 080/81, a net FDI of 8.4 billion rupees has been received. Compared to the previous financial year, such investment increased by 36.1 percent last year. A total of 8 billion 47 crore 47 lakh rupees foreign investment came in, but 7 crore 39 lakh rupees worth of old investments were withdrawn, so the net foreign investment was seen as 8 billion 40 crore rupees.

In the last financial year, 70.2 billion rupees were promised to invest, but only 8.44 billion rupees were invested. Last year, 8 billion 11 billion rupees investment commitment was received in 139 industries through the automatic system (automatic route). Similarly, investment commitments of 61 billion 90445 million rupees in 407 industries came from the advance approval route.