Foreign investment inflow signals optimism for Nepal’s economic growth

KATHMANDU: Despite facing persistent challenges in its domestic economy, Nepal is currently experiencing a notable upswing in commitments from foreign investors. In the initial two months of the fiscal year 2023/24, spanning from mid-July to mid-September (Shrawan and Bhadra), the Department of Industries has documented foreign investment pledges totaling around Rs 18 billion.

According to data from the Department, foreign investment commitments in Bhadra amounted to Rs 5.89 billion, while in Shrawan, they reached approximately Rs 11.96 billion.

These commitments encompass Rs 14.65 billion designated for establishing new industries and an additional Rs 3.20 billion allocated for share purchase agreements (SPAs).

It is worth highlighting that Bhadra alone witnessed investment commitments of Rs 2.72 billion for 51 new industries and Rs 3.17 billion through SPAs and SSAs for 11 existing industries. These commitments are anticipated to create job opportunities for 5,502 individuals through the industries registered and committed to by Bhadra.

The tourism sector emerges as the most prominent beneficiary, attracting the largest share of investment commitments. Approximately 53.48 percent of foreign investment commitments recorded until Bhadra have been channeled into the tourism sector, with 44.39 percent directed toward the service sector.

The remaining commitments are diversified across manufacturing (9.8 percent), infrastructure (2.2 percent), information and communication technology (ICT) (2.2 percent), and agriculture (1.1 percent).

By Bhadra of the current fiscal year, industries operating with foreign investments have proposed dividends amounting to Rs 250.07 million, reflecting the profitability of these ventures.

This influx of foreign investment commitments augurs well for Nepal’s economic landscape, highlighting the potential for growth and development across various sectors.