FDI Commitments Surge by 18.34% in First Seven Months of Current Fiscal Year

Foreign direct investment (FDI) pledges in Nepal reached Rs 26.84 billion during the first seven months of the ongoing fiscal year, marking an 18.34% rise compared to the same period in FY 2023/24.

As per the Department of Industry (DoI), this increase amounts to Rs 4.16 billion, with FDI commitments climbing from Rs 22.68 billion in the previous fiscal year to Rs 26.84 billion in the current one.

A breakdown of the figures shows that Rs 2.67 billion was pledged through the automatic route, while Rs 24.17 billion was committed under the manual process. The automatic route, introduced in October 2023, aims to streamline investment procedures in seven priority sectors: energy, agriculture and forestry, infrastructure, tourism, information technology, services, and manufacturing.

This system enables foreign investors to submit online applications from abroad for investments up to Rs 500 million, expediting approvals. DoI officials report that IT-related ventures have particularly benefited from this mechanism.

A total of 386 projects have secured FDI commitments so far this fiscal year. Tourism and service industries have been the major attraction, with 216 projects—accounting for 56% of the total—falling into these categories. The tourism sector, in particular, led with 168 firms pledging Rs 17.32 billion, representing 64.53% of overall FDI commitments.

The service sector followed, with 48 firms securing Rs 5.69 billion in pledges, making up 19.8% of the total. Additionally, Rs 1.94 billion in commitments came through share purchase agreements, share subscription agreements, and technology transfer agreements.

Among the registered foreign projects, 375 were small-scale, seven were medium-sized, and four were classified as large-scale. The government has set an FDI target of Rs 44 billion for the ongoing fiscal year.