एफडीआई परियोजना ३३ प्रतिशत बढे, लगानी प्रतिबद्धता भने घट्योFDI Projects Rise 33 Percent, but Investment Commitments Decline

KATHMANDU — Nepal approved a significantly higher number of foreign direct investment projects in fiscal year 2025/26, but the total value of investment commitments declined, indicating that investors were increasingly drawn to smaller projects.

According to the Department of Industry, 1,116 FDI projects worth Rs 58.01 billion were approved during the fiscal year. These projects are expected to create employment opportunities for 28,423 people.

In the previous fiscal year, Nepal had approved 840 projects with investment commitments of Rs 64.96 billion. Although the number of projects increased by 276, or nearly 33 percent, the total investment commitment fell by about Rs 6.95 billion, equivalent to a decline of roughly 11 percent.

The average investment commitment per project also dropped sharply. It declined from around Rs 77.3 million in the previous year to approximately Rs 52 million in 2025/26. This suggests that the growth in project numbers was driven mainly by small-scale investments rather than large industrial ventures.

Of the total projects approved, 1,092 were classified as small industries, while only 12 were medium-sized and another 12 were large. The figures show that small projects dominated the investment landscape, while major foreign investors remained cautious about committing capital to large ventures.

The information and communication technology sector received the highest number of approvals, with 727 projects. This represented around 65 percent of the total projects approved during the year.

However, the agriculture and forestry sector attracted the largest amount of investment. It received commitments worth Rs 23.18 billion, accounting for nearly 40 percent of the total approved FDI.

The tourism sector attracted commitments of nearly Rs 14 billion, followed by energy with Rs 7.16 billion. The service sector received Rs 4.91 billion, manufacturing Rs 3.91 billion and information technology Rs 2.83 billion.

The difference between the number of projects and the amount of investment is particularly visible in the ICT sector. Although it accounted for almost two-thirds of all approved projects, its share of the total investment amount remained relatively small. This indicates that many ICT investments were low-capital or service-oriented ventures.

Foreign investment commitments were strongest at the beginning of the fiscal year. In the first month alone, 127 projects worth Rs 24.10 billion were approved, the highest monthly commitment of the year.

The amount declined steadily in the following months. By the sixth month, monthly commitments had fallen to just Rs 599.5 million, reflecting increased caution among foreign investors.

Department officials attributed the slowdown to political uncertainty, election-related activities, policy instability and international tensions, including the Iran–Israel conflict. These factors reportedly led several investors to postpone decisions on large projects.

Investment activity improved toward the end of the fiscal year. In the final month, 202 projects worth Rs 10.38 billion were approved. Officials have interpreted the increase as a possible sign of stronger foreign investment flows in the current fiscal year.

The government had removed the previous maximum investment ceiling of Rs 500 million under the automatic route. Officials believe the policy change has helped simplify investment procedures and encouraged more applications.

However, large investments continue to enter mainly through the traditional approval route. This suggests that simplifying administrative procedures alone may not be enough to attract major foreign projects. Policy stability, investment security, infrastructure and regulatory predictability remain important concerns.

During the fiscal year, foreign investors were also permitted to repatriate dividends worth Rs 17.85 billion. More than Rs 5.89 billion was approved for repatriation as royalties and service fees.

The growing outflow of dividends, royalties and service payments has raised questions about the long-term contribution of foreign investment to Nepal’s economy. Policymakers may need to assess whether incoming investment is generating sufficient employment, exports, technology transfer and domestic economic value to offset the outflow of foreign currency.

The annual figures therefore present a mixed picture. Nepal attracted more foreign investment projects, but the declining average investment size shows that the country has yet to secure a strong flow of large, capital-intensive projects.