FDI Drops Sharply by 64% in First 10 Months of Current Fiscal Year

Nepal has experienced a significant decline of 64 percent in foreign direct investment (FDI) during the first 10 months of the current fiscal year compared to the corresponding period last year, as per data maintained by the Nepal Rastra Bank (NRB).

Between mid-July 2022 and mid-May 2023, the country received a mere Rs 6.16 billion in total FDI. In contrast, the FDI inflow during the same period of the previous fiscal year, 2021/22, stood at Rs 17.08 billion.

The dwindling FDI inflow poses a challenge for Nepal’s economy, as foreign investment plays a crucial role in driving growth and creating employment opportunities. The sharp decline raises concerns about the country’s attractiveness as an investment destination.

In contrast to the decline in FDI, the repatriation amount surged significantly during the review period. Foreign companies repatriated Rs 1.80 billion, a substantial increase from Rs 442 million reported during the same period. Foreign companies that have invested in Nepal typically receive their returns in the form of profits and royalties, which are repatriated back to their home countries.