'Country specific measures to lure foreign investment'
BHOJ RAJ POUDEL
KATHMANDU, May 21: The government, which is reviewing the existing Foreign Direct Investment (FDI) Policy 1992 through a team of experts, will soon start developing different investment framework for different countries, as the single policy model failed to attract foreign investors to the country.
The 4-member team of experts, which is working under the leadership of Keshav Acharya, former senior advisor of the Ministry of Finance (MoF), made the recommendation after reviewing the FDI Policy 1992.
We have recommended the government to be country-centric in order to attract foreign investmet," Acharya shared with Republica about the review and recommendations of the team. "We shouldn´t put all the investors in the same basket."
Giving an example of difference between investors from India and other third country, Acharya suggested "We have to treat them in different grounds. For instance, Indian investors might not give priority to issues that other countries´ investors are pushing for due to the pegged exchange rate between two countries." Similarly, the team has suggested the government treat Chinese investors in a different manner.
However, this does not mean there would not be one FDI policy. "The country will have one FDI policy but the government can have one-to-one bilateral understanding and sign agreements with each country and make different arrangements for different investors. According to Department of Industry (DoI), there are around 80 countries which are interested to invest in Nepal. "We have to prioritize them and have to deal with them on one-on-one basis," Acharya said.
In that direction, the team has suggested two ways for foreign investors´ entrance in the country - automatic and government approved. the first one will let foreign investors to come without any registration procedure whereas the second one will lead investors to go through the process of application and registration. "Investors who come here with investment and use domestic raw material and labor, those who invest in technology transfer and establish companies which process and export Nepali production can come through the automatic way," Acharya said.
Unlike in the existing FDI policy of the country, the team has floated an idea to allow the investors through the automatic way if they come with convertible currency to make investment here.
Moreover, the review team has said that the ceiling amount of money to be known as FDI should be changed. The existing policy recognizes more than USD 20,000 of investment as FDI and government provides multiple facilities to the investors who bring in more than USD 100,000 as investment. "We have to look for bigger investment," Acharya said, "That is why there should be increment in the ceiling of the amount that is counted as FDI."
In order to make services functional and timely, the team also has suggested government to a establish body to which investors can complain if they don´t get the instant service“. "There should be a prime ministerial level body that listens to the grievances of investors if they don´t get services in time," Acharya said.