Positive Momentum in FDI Pledges

It is encouraging to know that the foreign investors pledged Rs 64.96 billion in Nepal during the last fiscal year, 2024/2025, which is a growth of 4.9 percent compared to the previous fiscal year. The figure is a growth of Rs 3.06 billion over FY 2022/23, when the pledges of investors stood at Rs 61.90 billion, according to the Department of Industries. Of the total, Rs 4.61 billion worth of projects were sanctioned automatically, while the remaining Rs 60.35 billion were approved through the approval route. Altogether, 840 projects were given the green signal, with the maximum number of proposals coming in the field of information technology. While IT attracted 382 projects, investors pledged more money in services and tourism sectors. The service industry alone received FDI commitments of Rs 30.9 billion for 84 projects, and the tourism industry received Rs 26.82 billion for 304 new projects. In the manufacturing sector, 55 projects received Rs 3.84 billion, and 123 agriculture projects received Rs 1.46 billion. One energy project received Rs 25.5 million, while two infrastructure proposals got Rs 50 million. Foreign investors have promised around Rs 600 billion over the years, but according to the Nepal Rastra Bank, only about a third of that has materialized so far. The Foreign Investment and Technology Transfer Rule 2021 requires investors to inject at least a portion of their committed amount within a year, which is 5 to 50 percent based on investment size.