Department of Industry, ICMS discuss Foreign Direct Investment in Nepal


In a seminar at the Institute for Crisis Management Studies (ICMS) on 15 July 2014, heads of the Ministry of Industry and the Department of Industry discussed the potential for increasing foreign direct investment in Nepal. The seminar, organized by the Department of Industry and ICMS, brought together the Minister for Industry, Mr. Karna Bahadur Thapa; the Secretary of the Ministry of Industry, Mr. Krishna Gyawali; the Director General of the Department of Immigration, Mr. Sharad Chandra Pudel; the Director General of the Department of Industry, Mr. Dhurba Lal Rajbanshi; Country Director at the Asian Development Bank, Mr. Kenichi Yokohama; and Chargé d'Affaires at the American Embassy, Mr. John Kawell. The speakers examined Nepal's unique assets and constraints related to foreign direct investment, as well as ways to attract more investment from other countries.

Nepal represents a unique environment for foreign direct investment with an abundance of affordable labor, prospects for large profit margins, a hospitable culture and a commitment to attracting foreign enterprise. The government has already undertaken recent reform measures to address the nation's biggest hurdles to investment: poor infrastructure, security concerns, and endless red tape. All in all, there is a pool of investors willing to invest in Nepal, but they seek security and stability - both politically and economically.

The seminar noted that although the some of the consequences of more direct investment - like increased employment opportunities and the transfer of technology - would benefit Nepal, foreign money could threaten domestic industries and influence Nepal's financial policies. With this in mind, the discussion touched on the fact that foreign direct investment is key for development, but is not as important as domestic investment when it comes to economic growth. Foreign direct investment should not only look at possible exports, but also focus on industries that can replace Nepal's imports.