Nepal receives FDI from 58 countries with industrial sector having largest share

India becomes largest contributor

KATHMANDU, Aug 30: The largest share of foreign direct investment (FDI) in Nepal is found in the industrial sector, according to the FDI Survey Report 2022/23 released by Nepal Rastra Bank (NRB) on Friday.

The report reveals that 59.7 percent of the total foreign investment is in the industrial sector. Within this sector, 30 percent of the foreign investment is allocated for hydropower, while 29.4 percent is invested in manufacturing. The report notes that foreign-invested manufacturing companies have utilized 60.69 percent of their capacity.

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Additionally, 40.2 percent of foreign direct investment is directed towards the service sector. Of this, 26 percent is invested in banks, financial institutions, and insurance companies.

As of the fiscal year 2022/23, the total amount of FDI has increased by 11.8 percent, reaching Rs 295.5 billion. Of this, 52.8 percent is paid-up capital, 33.7 percent reserves, and 13.5 percent loans.

As of mid-July 2024, Nepal has received FDI from 58 countries. India is the largest investor, contributing Rs 103.45 billion, which accounts for 35 percent of the total investment.

Investment from other countries includes Rs 35.46 billion (12 percent) from China, Rs 22.62 billion (7.7 percent) from Ireland, Rs 19.6 billion (6.4 percent) from Australia, and Rs 18.81 billion (6.4 percent) from Singapore.

Provincially, Bagmati Province has received the highest investment at 59.7 percent. Gandaki Province follows with 15.1 percent, Koshi Province with 14.7 percent, and Madhesh Province with 8.8 percent. In contrast, the FDI in Lumbini, Karnali, and Sudurpashchim provinces is less than 1 percent, according to the NRB.