Industrial sector receives largest share of FDI in Nepal

KATHMANDU: The industrial sector in Nepal receives 59.7% of all foreign direct investment (FDI), according to the FDI Survey Report 2022–2023 published by Nepal Rastra Bank (NRB). In this business, manufacturing accounts for 29.4% of foreign investment, while hydropower accounts for 30%. Interestingly, manufacturing firms that receive foreign investment are running at 60.69 percent of their potential.

Next in line with 40.2% of FDI is the service sector. Of this, twenty-six percent is invested in insurance companies, banks, and other financial institutions. Foreign direct investment (FDI) increased by 11.8% to Rs 295.5 billion during the fiscal year 2022–2023. This amount is made up of 52.8% paid-up capital, 33.7% reserves, and 13.5% loans.

India is the largest investor with Rs 103.45 billion, accounting for 35% of all FDI. Other prominent contributors with donations of Rs. 35.46 billion include Australia (19.6 billion), Singapore (18.81 billion), China (22.62 billion), and Ireland (22.62 billion). With 59.7% of the total regional investment, Bagmati Province accounted for the highest share, after Gandaki, Koshi, and Madhesh provinces. Lumbini, Karnali, and Sudurpashchim provinces received less than 1% of all FDI.