Nepal received foreign direct investment (FDI) commitment worth Rs 29.74 billion in the first 10 months of the current fiscal year, which was 14 percent less compared to the commitment amount in the same period of last year.
The records with the Department of Industry show that between mid-July 2021 and mid-May 2022, foreign investors pledged to invest Rs 34.54 billion. The FDI commitment amount during the past three months surged with notable value.
As of the first six months, the pledged amount in the FDI was mere Rs 17.30 billion, which was a heavy decline from Rs 30 billion in the same period last year. The DoI statistics shows that the commitment amount increased more than Rs 12 billion in the past three months this year.
Economist Keshab Acharya said lack of investment environment in the country is the main reason behind falling FDI. “At a time when the domestic investors are reluctant to pour more investment inside the country, it cannot attract more foreign investors,” Acharya said.
According to the DoI officials, the ongoing global economic slowdown has also affected the foreign investors this year.
The FDI pledged amount in the past one month between mid-April and mid-May stood at Rs 1.64 billion. Last month, the foreign investors committed to inject their investment in 28 projects, while they have assured to provide employment opportunities to 1,272 individuals.
The government, since October 14, has adopted a flexible policy to attract more FDI. The government has lowered the minimum threshold limit for the FDI to Rs 20 million from Rs 50 million.
As of now, Nepal has received FDI commitments of over Rs 400 billion to open more than 5,500 firms. These firms have proposed to provide employment to more than 300,000 people.
