Industrial Promotion Board (IBP) has approaved investment worth NRs26 billion (NRs20.5 billion as FDI) in cement, hotel and hydropower sectors. Most are for increasing paid-up capital.
- Arghakhachi Cement (NRs3 billion)
- Langtang Bhotekoshi Hydropower Company (NRs17.5 billion)
- Sarbottam Cement (NRs3.4 billion)
- Sinohydro Sagarmatha (NRs3.4 billion)
- Soaltee Crowne Plaza (NRs1.6 billion)
- Swetganga Hydropower and Construction (NRs320 million)
Investment Board Nepal (IBN) and Ministry of Industry (MOI) are organizing a two-day investment summit (March 2-3) to showcase and promote investment potential in Nepal, particularly in infrastructure, mining, tourism and agriculture. Nepal's Prime Minister Pushpa Kamal Dahal is set to inaugurate the summit, which will draw about 300 foreign delegates from around 25 countries. Indian Finance Minister Arun Jaitley and president of Asian Infrastructure Investment Bank (AIIB) Jin Liqun are also attending the summit. The last time such a summit was organized was in the early 1990s.
The government is promoting projects such as a chemical fertiliser plant, East-West railways, Kathmandu-Kulekhani-Hetauda tunnel highway, Second International Airport at Nijgadh, East-West electric Railway, Kathmandu Valley metro project, Kathmandu-Pokhara railway project, and Tamakoshi-3 hydropower project. Additionally, the government also intends to draw foreign investment in around 20 mines across the country that have deposits of limestone, copper, zinc and iron ore. Construction of SEZs at Simara, Panchkhal, Biratnagar, Kapilvastu, Jumla and Dhangadi will also be floated.
Actual net FDI inflows in FY2016 was just $59.7 million. In recent years, it peaked to $113.9 million in FY2012. By the first half of FY2017, FDI commitment was NRs8.3 billion and actual inflows was NRs7.4 billion ($68.9 million). Investor confidence is gradually recovering, especially after the normalizatio of supplies, improved power supply, and approval of key legislation and policies (Industrial Enterprises Act, Special Economic Zones Act, Banks and Financial Institution Act, Intellectual Property Policy, Mining Policy). Amended versions of Foreign Investment and Technology Transfer Act and Labor Act are pending approval by the parliament.
According to the latest data released by the government, India's GDP growth slowed only marginally to 7% y-o-y in Q3, October-December (the time when the government withdrew high-value currency notes from circulation), from 7.4% in Q2 (July-September). In Q1, it grew by 7.1% (y-o-y). Private consumption, fixed investment and industrial output growth all accelerated in Q4, with only the services sector witnessing a slowdown. The second advance estimate of growth in FY2016/17 is 7.1%.
There is some controversy over the accuracy of the data (private consumption rose by 10.1% over the quarter; credit by banks fell to the lowest level in a decade but investment grew), but FM Jaitley argued that it was due to high manufacturing (8.3%). The index of manufacturing production decreased by 2% in December. Also, inflation fell as demonetization dampened demand.
There is some controversy over the accuracy of the data (private consumption rose by 10.1% over the quarter; credit by banks fell to the lowest level in a decade but investment grew), but FM Jaitley argued that it was due to high manufacturing (8.3%). The index of manufacturing production decreased by 2% in December. Also, inflation fell as demonetization dampened demand.
