Rs 22.85bn FDI commitments received in four months

Nepal has received foreign investment commitments, totaling Rs 22.85bn, for 199 business ventures in the first four months of the fiscal year 2023/24.

According to the Department of Industry (DoI), foreign investors have pledged investments amounting to Rs 18.35m across 178 new industries. Additionally, commitments totaling Rs 3.72bn have been made for 21 existing industries.

In the fourth month (mid-Oct to mid-Nov) of 2023/24 alone, foreign investors expressed a commitment to invest Rs 2.74bn. This includes Rs 1.75bn earmarked for 27 new industries and Rs 56.3m dedicated to share purchase agreements (SPA) and share subscription agreements (SSSA) in two existing industries, according to the DoI.

However, the actual investments received by Nepal are notably lower. According to Nepal Rastra Bank (NRB), the central monetary authority, the country received foreign investments amounting to Rs 3.37bn in the first three months (mid-Sept to mid-Oct) of 2023/24.

In the first four months of 2022/23, Nepal attracted foreign investment commitments of Rs 33.14bn. The DoI approved 327 foreign investments during that period, promising the creation of 17,012 jobs. The commitment figure stood at Rs 54.14bn in the first four months of 2021/22.

The breakdown of foreign direct investments (FDIs) in the first four months of 2023/24 reveals commitments for 170 small industries, five medium-sized, and three large industries. The tourism sector received the highest investment commitment, followed by the service, manufacturing, ICT, and infrastructure sectors.

As of mid-July 2022, the total stock of FDI in Nepal reached Rs 264.33bn, as per the central bank, with contributions from 57 different countries.

However, the trend of repatriations by foreign investors from Nepal continues to outpace the FDI received. In the first four months of 2023/24, foreign investors repatriated Rs 748.67m as royalty and Rs 1.41bn as dividends. In the same period of the fiscal year 2022/23, foreign investors took home Rs 2.12bn in dividends and Rs 875.40m in royalty.

According to the central bank, foreign investors repatriated Rs 26.7bn as dividends in 2020/21.