Foreign Direct investment (FDI) in Nepal has surged significantly, reaching Rs 44.40 billion by the 11th month (mid-June) of the current fiscal year (FY) 2023/24. This represents an increase of over Rs 10 billion compared to the same period last year, which saw Rs 34.58 billion in FDI.
This year, the government organized an investment summit, which positively impacted investment inflows. According to the Department of Industry (DoI), a total of 359 FDI proposals have been approved by mid-June. In the month of Jestha (mid-May to mid-June) alone, foreign investment worth Rs 3 billion was approved.
It is estimated that 20,146 jobs will be created from the FDI approved this year, with 2,323 jobs expected to be generated from the FDI received in the Nepali month of Jestha alone.
FDI worth Rs 11 billion collected through automatic route
The government implemented the automatic route for FDI this year to facilitate the inflow of foreign investment. The government collected Rs 11.81 billion in FDI in mid-May to mid-June through the automatic route. According to the DoI, a total of 90 proposals were submitted through the automatic route by mid-June. The DoI’s statistics show that Rs 8.27 billion in FDI was received through 68 proposals in mid-May to mid-June alone.
FDI nearing Rs 500 billion
According to the latest data, the total FDI in Nepal has reached about Rs 500 billion. The DoI’s data indicates that Rs 594.36 billion in FDI has been approved by mid-June. So far, 6,218 FDI projects have been approved, with an estimated 329,655 jobs expected to be created from these investments.
More FDI in small-scale industries
The data reveals that a significant portion of FDI has been directed toward small industries in Nepal. A total of 341 small industries received FDI this year, compared to 14 medium-scale and 4 large-scale industries. In mid-May to mid-June, the government approved FDI for 51 small industries, while only one medium-scale industry received approval for foreign direct investment.
Attraction in tourism
Tourism has attracted a substantial portion of FDI. Nearly half of the total FDI sanctioned this year has been directed toward tourism, with 176 proposals approved, accounting for 49 percent of the total. The service sector received 114 proposals (32 percent), followed by 40 proposals for the productive sector. The DoI’s data also shows 10 proposals approved in information technology, 8 in agriculture, 7 in infrastructure, 3 in mining, and 1 in energy.
