The main determinants of FDI are macroeconomic, political and political stability; Large and growing market size; and close to large emerging countries, which has allowed the export of goods there. While Nepal has large markets and GDPPA has, to some extent, guaranteed the security of investment at the political level, there is an urgent need to address other factors holding back investment. Nepal has a lot of work to do to increase the current di and $39 million, or about one percent of gross fixed capital formation. Inflows (percent of gross fixed capital formation) to Bangladesh and India are about 3.7% and 4.5%. Dhakal said Bippa with China would help attract a lot of investment from its northern neighbors and send the message to the world that Nepal has a favorable trading environment. At the same time, the two countries also agreed to begin preliminary work to establish air links between Saidpur in Bangladesh and Bhadrapur or Biratnagar in Nepal, due to increased trade relations between commercial communities in eastern Nepal and northern Bangladesh. Much of the debate on BIPPA is based on misinformation and an inaccurate understanding of the scope and depth of the agreement. While the private sector has openly hosted BIPPA, selfish political leaders politicize them to be heard by hooks or crooks. For example, former Prime Minister Jhalanath Khanal reprimanded the government for signing the BIPPA, which he said was not in our national interest.
He seems so lost in the dirty political game that he has forgotten what was mentioned in the 2009/10 economic survey published by the Ministry of Finance during his term as Prime Minister. It states that a bilateral investment promotion and protection agreement will be signed with India to promote Indian investment in Nepal, while preparations are underway with other countries for the continuation of these agreements” (see page 187). It shows how much our leaders, like Khanal, understand economic problems and remember what they officially supported when they were at the top of power. Similarly, some influential leaders have argued that BIPPA is contrary to the interests of our country and workers. Their argument is that BIPPA will strengthen Indian domination and undermine the rights of domestic workers. The overall objective of BIPPA is to increase FDI inflows. In this regard, recent studies show that investment protection agreements, such as BIPPA, do have a positive effect on foreign direct investment, particularly when they come from relatively high-income, export-intensive countries to low-income countries. The impact is higher in countries where domestic institutions are weak, with investors relatively more confident in investing in the country under investment protection agreements. With regard to employment, there is some evidence that foreign investors pay relatively higher wages on average and employ more workers than their domestic counterparts in certain sectors, particularly in manufacturing.