Banking Khabar/ Nepal Rastra Bank’s Economic Research Department has released the Direct Foreign Investment Survey Report for the fiscal year 2079/80. The report, published on Friday, reveals that Nepal has received direct foreign investment from 58 countries.
The central bank’s Economic Research Department conducts an annual on-site survey to collect necessary data on direct foreign investment. This survey aims to assist in policy formulation by analysing sectoral trends and the current status of foreign investments.
As of the end of the fiscal year 2079/80, the total stock of direct foreign investment in Nepal increased by 11.8%, reaching NPR 295.5 billion.
Among the total foreign investment, 52.8% is in paid-up capital, 33.7% in reserves, and 13.5% in loans.
India Tops Foreign Investment in Nepal, Followed by China, Ireland, Australia, and Singapore. According to the survey, India is the largest source of direct foreign investment in Nepal, contributing NPR 103.45 billion (35%). Following India are China with NPR 35.46 billion (12%), Ireland with NPR 22.62 billion (7.7%), Australia with NPR 19.06 billion (6.4%), and Singapore with NPR 18.81 billion (6.4%).
Key Highlights:
– The “Direct Foreign Investment Survey Report 2079/80” was prepared by analysing data and other details from a sample of 238 companies operating with foreign investment in Nepal during the fiscal year 2079/80.
– The total stock of direct foreign investment in Nepal increased by 11.8%, reaching NPR 295.5 billion by the end of the fiscal year 2079/80. Of the total foreign investment, 52.8% is in paid-up capital, 33.7% in reserves, and 13.5% in loans.
– As of the end of Asar 2080 (July 2023), Nepal has received direct foreign investment from 58 countries. India leads with NPR 103.45 billion (35%), followed by China, Ireland, Australia, and Singapore.
– In terms of sectoral distribution, 59.7% of the direct foreign investment is in the industrial sector, while 40.2% is in the service sector. Within the industrial sector, 30% of the investment is in hydropower, and 29.4% is in manufacturing. Additionally, 26% of the total direct foreign investment in the service sector is concentrated in banks, financial institutions, and insurance companies.
– On a provincial basis, Bagmati Province receives the highest share of foreign investment at 59.7%, followed by Gandaki Province with 15.1%, Koshi Province with 14.7%, and Madhesh Province with 8.8%. The provinces of Lumbini, Karnali, and Sudurpaschim receive less than 1% of the total foreign investment.
– The capacity utilisation of manufacturing companies operating with foreign investment in Nepal is found to be 60.69%, with a return on equity of approximately 11.61%.
Not Even 1/3rd of Approved Foreign Investment Realised
The survey conducted by the central bank indicates that only 35% of approved foreign direct investment actually materialises in Nepal. Data from 1995/96 to 2022/23 shows that only one-third of the approved foreign investments have been realised, according to the report.
