Nepal received net FDI of Rs 8.40 billion last FY -- 36.1 percent more than that of FY 2022/23

Published On: August 20, 2024 10:00 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, Aug 20: Nepal received net foreign direct investment (FDI) worth Rs 8.40 billion in the last fiscal year, which was 36.1 percent more than the amount received in FY 2022/23.

The records with Nepal Rastra Bank (NRB) show that the country witnessed an inflow of the fresh FDI worth Rs 8.47 billion during FY 2023/24. On the other hand, foreign investors withdrew capital worth Rs 739 million in the review period.

In FY 2022/23, the net FDI realization in Nepal was Rs 5.96 billion. The total FDI received was Rs 7.76 billion while Rs 1.80 billion was withdrawn by the foreign investors.

In the last FY, Nepal realized FDI worth only 12 percent of the pledged amount. While foreign investors expressed their commitment to invest Rs 70.02 billion, they injected capital worth Rs 8.40 billion into the Himalayan country.

Over the past year, the pledged amount rose 82 percent higher than that in the previous FY. In FY 2022/23, Nepal was pledged FDI of only Rs 38.40 billion.

Govt officials said the conduction of Nepal Investment Summit 2024 also helped attract foreign investors during the period. Through the mega event which was held on 28-29 April in Kathmandu, the government has introduced an automatic route, an online system, to approve FDI. By using the platform, foreign investors pledged to invest Rs 8.11 billion in 139 firms just in the last two and a half months of the FY 2023/24.

According to the Department of Industry (DoI), after the implementation of automatic route, there is no minimum threshold for the investors who want to invest in the IT sector via the new platform. A foreign investor is required to invest at least Rs 20 million.

By using the system, the investors automatically get the FDI approval certificate just after submitting the application through the online system imis.doing.gov.np operated by the DOI.

It prescribed foreign investment in seven sectors that are based on energy, infrastructure, tourism, agriculture and forest, ICT, service and manufacturing. A total of 84 sub-sectors have been identified under these seven categories.

Despite a growth in the realization of the net FDI in last FY, it was far less compared to the amount that Nepal received two years ago. In FY 2021/22, the pledged FDI stood at Rs 54.15 billion, while the net FDI inflow was Rs 18.56 billion.