According to the Department of Industry, Nepal received foreign direct investment (FDI) commitments of Rs 16.44 billion in the first quarter of the ongoing fiscal year.
Investment commitments totaling Rs 15.42 billion were received for 131 industries through the approval route, while commitments amounting to Rs 1.01 billion were made for 73 industries through the automatic system.
Tourism industries accounted for 64% of these investment commitments (in value) while the rest accounted for service (24%), manufacturing (7%) agro (4%) and Information and Technology (1%).
Nepal only recently implemented approval of foreign investments up to a certain amount in specific sectors through an automated system.
Difference between approval route and automatic routeApproval route: Requires foreign investors to submit a business proposal to the Department of Industry or Investment Board of Nepal for pre-approval. Automatic route Allows foreign investors to apply online for pre-approval for investments up to a certain amount in specific sectors |
Out of 131 industries through the approval route, 128 of these commitments were made for small industries, one for medium and two for large industries.
Last fiscal year (2023/24), Nepal received a foreign investment commitment of Rs 61.9 billion out of which only 8.5 billion rupees were realised.
In the fiscal year 2023/24, the government reduced the minimum threshold for FDI TO Rs 20 million from the previous 50 million rupees threshold. This fiscal year, the government has announced plans to review and potentially revise the sector-specific minimum investment requirements. The budget has also included a provision to lift investment limits for the information technology sector.
