Foreign investment surges in Nepal, IT and agriculture drive Rs 39 billion inflows

KATHMANDU: Foreign direct investment (FDI) commitments in Nepal have recorded a notable increase in the first six months of the current fiscal year, with investment pledges spanning 475 industries and sectors ranging from information technology to agriculture, according to data from the Department of Industry (DoI).

From Shrawan to the end of Poush, foreign investors committed a total of Rs 39.23 billion to 475 industries. This marks a substantial rise compared to the same period of the previous fiscal year, when 354 industries received FDI commitments totaling Rs 25.78 billion.

The latest figures indicate not only higher investment volumes but also a broader spread across industry sizes. During the review period of the current fiscal year, FDI commitments were recorded in seven large industries, eight medium-sized industries, and 460 small industries. In contrast, during the same six-month period last fiscal year, foreign investment commitments were concentrated in 345 small industries, five medium industries, and four large industries.

According to the DoI, foreign investment commitments in these 475 industries are expected to generate approximately 20,122 jobs, underscoring the growing role of FDI in employment creation alongside capital inflows.

Monthly data show sharp fluctuations but an overall upward trend in recent months. In Shrawan, FDI commitments stood at Rs 597.56 million. This figure surged dramatically in Bhadra, reaching Rs 33.09 billion, largely driven by large-scale project approvals. Commitments then moderated to Rs 2.04 billion in Ashoj and Rs 1.54 billion in Kartik, before rising again to Rs 1.91 billion in Mangsir. In Poush alone, investment commitments were recorded in 36 small industries, signaling sustained investor interest toward the end of the review period.

IT Leads by Number, Agriculture by Value

Sector-wise data reveal that information technology has emerged as the most attractive sector in terms of the number of industries. Between Shrawan and Poush, FDI commitments were made to 257 IT-based industries, reflecting growing foreign interest in Nepal’s digital services, software development, and technology-enabled businesses.

However, in terms of total investment value, the agriculture sector leads by a wide margin. Only 13 agriculture-based industries accounted for FDI commitments worth Rs 21.88 billion, indicating the capital-intensive nature of agro-based projects and rising investor confidence in commercial farming, agro-processing, and export-oriented agricultural ventures.

Tourism-related industries also continued to attract foreign investors. During the six-month period, 145 tourism-based industries received FDI commitments totaling Rs 10.54 billion. These include investments in hotels, resorts, travel services, and hospitality infrastructure, reflecting optimism about Nepal’s medium-term tourism recovery.

Similarly, 27 production-based industries secured FDI commitments of Rs 2.03 billion, while 31 service-based industries attracted Rs 3.46 billion in foreign investment during the same period.

The DoI data also show changes in business visa applications, which are often considered an indicator of foreign investor engagement. During the six-month review period, 1,229 foreign investors sought recommendations for business visas. This figure is lower than the 2,117 applicants recorded during the same period last fiscal year.

Meanwhile, 179 foreign representatives obtained business visas during the six months, compared to 201 representatives in the corresponding period of the previous fiscal year.

Officials say the decline in visa applications does not necessarily indicate reduced investor interest, noting that a growing number of commitments are coming from existing investors expanding operations or from companies using local representatives and digital engagement mechanisms.

Overall, the Department of Industry views the rise in FDI commitments—particularly in IT, agriculture, and tourism—as a positive signal for Nepal’s investment climate. However, officials acknowledge that converting commitments into actual investment inflows and project implementation remains a key challenge in the months ahead.