Nepal has seen a notable influx of foreign direct investment (FDI) commitments during the first four months of the fiscal year 2024/25, totaling Rs. 17.03 billion across 154 projects. This brings the cumulative FDI commitment in Nepal to Rs. 528.93 billion since such investments began. According to the Department of Industry, the period from July 15 to November 15, 2024, recorded Rs. 17.03 billion in new foreign investment pledges. In the month of Kartik (October 17 to November 15), FDI commitments worth Rs. 1.61 billion were made.
A significant portion of these commitments came through the automatic approval route, which was introduced in October 2023. During this period, Rs. 1.62 billion was pledged for 109 industries via the automatic route, bringing the total FDI via this method to Rs. 9.74 billion for 248 industries. The automatic route allows for streamlined approval for investments of up to Rs. 500 million, designed to ease the process for smaller investors.
The majority of the foreign investments are flowing into small industries. In the first four months of the current fiscal year, 151 small-scale industries were registered. Only two large-scale industries and one medium-scale industry were registered during this time. This suggests that small industries are still the primary focus for foreign investors.
Sector-wise, the tourism sector stands out as the largest recipient of foreign investment. A total of 113 industries were registered in this sector, accounting for 72% of all FDI-related industry registrations during the review period. The service sector is the second-largest recipient, with 20 industries registered, while manufacturing saw 13 registrations, and the information technology sector accounted for seven. There were also two registrations each in agriculture and minerals-related industries, indicating limited foreign interest in these sectors so far.
FDI in Nepal has also contributed to job creation, with the industries that were registered during the first four months committing to providing employment for 7,667 people. At the same time, the repatriation of profits by foreign companies, including royalties and dividends, stood at Rs. 1.41 billion by mid-November 2024, reflecting the outflow of capital from the country as foreign investors earn returns on their investments.
This data suggests that while there is steady interest in tourism and services, the flow of FDI is primarily directed toward small-scale projects, which may reflect both the size of investment opportunities and the government’s focus on streamlining processes for smaller investments.
