15.5 percent increase from previous FY’s first half

Foreign investors pledged to inject capital of more than Rs 25.77 billion in Nepal in the first half of the current Fiscal Year (FY), which was Rs 3.46 billion more than the amount pledged in the foreign direct investment (FDI) during the same period last year.

The records with the Department of Industry (DoI) show that Nepal received 15.5 percent more in FDI commitments during mid-July and mid-January this year. In the review period of FY 2023/24, the pledged amount stood at Rs 22.33 billion.

This year, the potential foreign investors have pledged the amount for 354 different projects. According to the DoI, a total of 202 projects have been registered in tourism and service sectors, which makes up 57 percent of the total projects.

In recent times, foreign investors have largely been attracted to inject their investment in Nepal's tourism and service sectors. In the review period this year, the tourism sector received the largest investment commitments, worth Rs 16.96 billion. This accounts for 66 percent of the total pledged amount.

Likewise, the service sector stood second in the row. The commitment for foreign investment was a total of Rs 5.15 billion, 20 percent of the total amount committed during the period.

There was a notable rise in FDI commitments seen also in the information technology business of the country. Over the past six months this year, Nepal registered 119 IT related projects compared to just seven projects in the review period last year. The number this year was 34 percent of the total number. In money value, the FDI commitment for IT businesses stood at Rs 740 million.

According to an official at the DoI, the increase in FDI commitments was due to the government implementing the automatic route system to provide initial approval for the foreign investment projects last year. The system facilitates registration of projects related to energy, agriculture, infrastructure and tourism, in particular. By using the means, the potential foreign investors can receive approval for investment of up to Rs 500 million.

The DoI records show that investment commitments of over Rs 2.38 billion have been received for 154 projects by using the automatic route system. Out of the total foreign projects registered during the review period, 345 were small projects, while the remaining five were medium and four were large projects.