Nepal’s Foreign Direct Investment Exceeds Rs 295 Billion by Fiscal Year 2079-80

By the end of the fiscal year 2079-80 BS (2022-23), Nepal’s total foreign direct investment (FDI) had surpassed Rs 295.5 billion, marking an 11.8 percent increase. This information was revealed in the Survey Report on Foreign Direct Investment, 2022-23, released by the Nepal Rastra Bank (NRB) on Friday.

The report, which surveyed 238 companies, detailed that of the total foreign investment, 52.8 percent was comprised of paid-up capital, 33.7 percent in reserves, and 13.5 percent in loans.

As of mid-July 2023, Nepal had received FDI from 58 countries. India led the pack with Rs 103.45 billion (35 percent), followed by China with Rs 35.46 billion (12 percent), Ireland with Rs 22.62 billion (7.7 percent), Australia with Rs 19.06 billion (6.4 percent), and Singapore with Rs 18.81 billion (6.4 percent).

The industrial sector received the majority of FDI, accounting for 59.7 percent, while the service sector attracted 40.2 percent. Within the industrial sector, 30 percent of the investment was directed toward hydropower, and 29.4 percent went to the production sector. In the service sector, banks, finance, and insurance companies garnered a 26 percent share of the total investment.

Province-wise, Bagmati Province received the largest share of FDI at 59.7 percent, followed by Gandaki with 15 percent, Koshi with 14.7 percent, Madhesh with 8.8 percent, and less than one percent each in Lumbini, Karnali, and Sudurpaschim provinces.

The report also highlighted that the capacity utilization of FDI-based manufacturing companies in Nepal stands at 60.69 percent, with a Return on Equity of approximately 11.61 percent.