Nepal’s government greenlights Rs 22.68 billion in FDI in seven months

KATHMANDU: In a significant economic boost, the Nepalese government has approved foreign direct investment (FDI) totaling Rs 22.68 billion during the first seven months of the current fiscal year.

The Department of Industry granted approval to 241 foreign firms, committing to inject approximately Rs 23 billion into the country’s economy between mid-July and mid-February. These investments are expected to generate employment opportunities for 12,692 individuals.

This year’s FDI figures demonstrate a remarkable increase compared to the same period last year when records from the Nepal Rastra Bank indicated a mere Rs 1.04 billion in FDI. Among the approved FDI-based firms, three belong to the large-scale category, 12 are medium-scale industries, and 226 are small firms.

Notably, 108 of the approved firms are related to the tourism sector, 86 are in the service sector, and 28 are involved in production. Additionally, eight firms are registered for information technology, five for infrastructure, and four for agriculture.

In a proactive move to attract more foreign investment, the government plans to organize the Third Investment Summit on April 21-22.

To facilitate this, a comprehensive review of several laws, including the Industrial Enterprise Act 2020, Foreign Investment and Technology Transfer Act 2019, Special Economic Zone Act 2017, Forest Act 2019, National Park and Wildlife Conservation Act 1973, Lands Act 1964, and Land Acquisition Act 1977, is underway.

A recent World Bank report emphasizes the critical role of foreign direct investment in Nepal’s future growth. The report identifies political instability, infrastructure deficiencies, stifled investment, and skills shortages as key factors contributing to the slow inflow of FDI.

With the approval of 6,098 FDI-related firms, pledging a total investment of Rs 472.58 billion, Nepal is positioning itself to harness the potential of foreign investments for sustained economic development.

Fiscal Nepal |
Sunday February 18, 2024, 10:12:23 AM |

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