Kathmandu: At a time when the country’s foreign reserves are declining, the commitment for foreign direct investment (FDI) has increased, according to the Department of Industry. In the past nine months of the current fiscal year, more than Rs 33 billion of FDI has been approved.

The investment commitment in the current fiscal year has increased by Rs 7.28 billion compared to the total investment commitment of 26.14 billion in the corresponding period of the previous year. This is the FDI amount approved by the Department of Industry. The department has stated that it has approved investments for 155 projects.

According to Director General Ram Chandra Tiwari of the department, foreign investment into the country has improved compared to before. "With the reform in our policies, foreign investors look positive," said Tiwari. In the current fiscal year alone, 155 FDI projects have taken approval to create 21,623 jobs.

According to the department, foreign investment worth about Rs 398 billion has been approved in Nepal so far. Although FDI commitment has been rising year on year, it declined due to covid in the past two years. However, foreign investment commitments have started increasing again this year.

Foreign investors have been seeking approval for investments in the service sector, tourism, information technology, agriculture and forest-based industries, and manufacturing, among other sectors.

Nepal started bringing in FDI legally in 1981 by implementing the Foreign Investment and Technology Transfer Act (FITTA) 1981. Lately, Nepal has been making legal, structural and procedural reforms in the industrial sector to create an investment-friendly environment by attracting foreign investment.

In order to attract foreign investment, the government is preparing to reduce the minimum limit of foreign investment by making policy reforms.

FITTA, 2019 has set the minimum limit for foreign investment at Rs 50 million. The current multi-investment system is said to be unattractive for investors. For that, the government has formed a study committee under the coordination of Director General of the Department of Industry Ram Chandra Tiwari to review the minimum limit of foreign investment.