Nepal receives second largest FDI commitment worth Rs 61.78 billion in FY 2023/24

Published On: July 28, 2024 01:25 PM NPT By: Republica | @RepublicaNepal

A total of 434 business firms received govt approval last FY, number grew 34.78 percent

KATHMANDU, July 28: A total of 402 foreign firms pledged to invest foreign direct investment (FDI) worth Rs 61.78 billion in FY 2023/24.

The annual progress report unveiled by the Department of Industry (DoI) shows that of the total firms registered in the last FY, the foreign firms made up 92.6 percent. These firms have proposed to provide employment opportunities to 19,565 people.

The amount pledged in FDI in the review period was the second largest till date.

Nepal received the highest FDI commitment of Rs 67.45 billion in 2014/15 when the country was hit by devastating earthquakes. The FDI pledges then dropped to Rs 15.25 billion and Rs 15.20 billion in 2015/16 and 2016/17, respectively.

The commitments eventually jumped to Rs 55.76 billion in 2017/18, when Nepal hosted the first investment summit. In the second investment summit in 2019/20, the country received investment pledges of Rs 37.80 billion.

Nepal received investment pledges of Rs 54.15 billion in FY 2021/22 in the post-Covid period.

Through the annual budget for FY 2022/23, the government lowered the minimum threshold for FDI to Rs 20 million, from Rs 50 million, to lure more foreign investors, even into segments of small and medium-sized enterprises. However, the commitment dropped to Rs 30.69 billion in the fiscal year 2022/23, due to the political turmoil that resulted in unstable policies, according to analysts.

A recent report, "Foreign Investment in Nepal-2024," published by the DoI, states that Nepal has received foreign investment commitments totaling Rs 425.72 billion in the past 13 years. However, only Rs 148.87 billion has been realized, which is just one-third of the committed amount.

Meanwhile, the government registered a total of 434 firms in the last fiscal year, which was 34.78 percent more than the figure in the previous fiscal year.

According to the DoI, the number included both the domestic and foreign firms.

Out of the proposed firms, 333 were registered under the category of small industry. Likewise, 49 firms were proposed for large industry and 52 firms were for the medium industry. They have earmarked to provide job opportunities to 25,551 people.

The Industrial Enterprises Act 2020 has categorized the business with fixed capital of up to Rs 150 million as small firms. Likewise, the firms with the capital investment of Rs 150-500 million fall under medium and those with capital investment of more than Rs 500 million are categorized as large firms.

A total of 6,051 products registered their trademark in the last fiscal year. Likewise, 11 new designs and two goods took their patent marks. A total of 113 cases were filed against violation of trademark.