Kathmandu — Nepal has drawn foreign investment commitments totaling approximately NPR 58 billion (USD 430 million) during the first nine months of the fiscal year 2024/25 (July 2024–March 2025), according to the Department of Industry (DoI). This surge highlights rising investor confidence in Nepal’s economic prospects, despite global and domestic challenges.
Out of the total NPR 57.98 billion in Foreign Direct Investment (FDI) pledges, the certification system contributed NPR 55.07 billion across 256 industries, while the automated system added NPR 2.90 billion to 224 industries. This dual-track approval mechanism reflects Nepal’s efforts to streamline and modernize investment procedures.
Moreover, NPR 1.95 billion was committed through Share Purchase Agreements (SPAs) and Share Subscription Agreements (SSAs) across 32 industries. Additionally, Technology Transfer Agreements (TTAs) were approved for 51 industries—an indication of growing interest in importing advanced technologies.
A total of 480 industries received commitments:
These investments are projected to generate approximately 12,435 jobs, providing a timely boost to employment and underlining the critical role of small enterprises (97.5% of commitments) in promoting inclusive growth.
March 2025 (Chaitra) alone saw NPR 13.32 billion in commitments across 53 industries. Notably, the certification system handled NPR 13.17 billion for 23 industries, while the automated system facilitated NPR 14.11 million for 30 industries. The uptick is likely linked to recent policy reforms and promotional events like the Nepal Investment Summit 2024.
While specific sectoral breakdowns were not disclosed, past trends point to strong FDI interest in tourism, manufacturing, services, agriculture, and IT. The approval of 51 TTAs aligns with Nepal’s aim to build technological capabilities and transition toward a middle-income economy by 2030.
The predominance of the certification system (95% of commitments) indicates the scale of capital-intensive projects. Yet, the automated system plays a key role in welcoming smaller, agile investments, including startups and niche markets.
The government has introduced sweeping reforms—amending nine laws ahead of the 2024 Investment Summit—to create a more investor-friendly environment. Revisions to the Foreign Investment and Technology Transfer Act (FITTA) 2019 and the Industrial Enterprises Act 2020, combined with the One Stop Service Center (OSSC), have streamlined registration, labor approvals, and visa processing.
Despite increased commitments, only 56% of FDI pledges have materialized over the past three decades. Out of NPR 474.18 billion committed between 1993/94 and 2022/23, only NPR 270 billion reached Nepal. Addressing this gap will require improvements in infrastructure, governance, and project execution.
Nepal’s economy is projected to grow 4.5% in FY 2024/25, up from 3.9% the previous year. While challenges such as airport upgrades and climate-related disasters persist, the surge in FDI offers optimism—particularly in priority sectors like hydropower, tourism, and manufacturing.
If Nepal can improve the realization rate of these commitments, the economic dividends could be transformative—boosting industrial output and creating thousands of jobs.
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