October 4: The Ministry of Industry, Commerce and Supply published a notice in the Nepal Gazette on Monday informing that Foreign Direct Investment (FDI) up to Rs 500 million will be approved through the automated system. However, the government has not yet developed the necessary infrastructure to implement the automated system.

The ministry issued a notice specifying the upper limit of foreign investment approval through automated system and the type of industries. The upper limit of foreign investment to be approved through the automated system is set at Rs 500 million. The minimum limit is Rs 200 million. Foreign investors can use automated system to invest in 60 types of industries and businesses in seven different sections within the limit.

According to the information published in the Nepal Gazette, these seven sectors include energy-based projects, agriculture and forest production-based industries and industries related to infrastructure, tourism, information technology, service-oriented and productive sector.

Baburam Gautam, director general of the Department of Industries, said, “Only investments within the specified limits will be approved through the automated system. The permission to grant investment approval will be done through this system."

He said that the department will now proceed with the purchase of the software for the automated system after the publication of the notification in the Nepal Gazette. Gautam said, “The system is not ready yet. It will take some time until the system is developed after proceeding with the procurement process of the software.”

The department held a press conference in mid-April and announced that the automated system will be used to approve foreign investment. The then director general of the department, Ram Chandra Tiwari, had informed that such a system, which is implemented in India, Bangladesh and other countries, would be implemented in Nepal from May 15.

The department says that despite the announcement, the software was not developed because the government did not release the required budget.

The government had mentioned in the budget statement for the current financial year (FY) 2080/81 that an arrangement will be made for automated system for approval of FDI.

After the system is established, foreign investors do not need to visit the Department of Industries to get approval for the investment of the specified limit. They can upload the necessary documents in the system while submitting application for the investment.

With the announcement of the automated system for investment the government claimed that it has created an investment-friendly environment in the country.