Kathmandu: Nepal’s Foreign Direct Investment (FDI) stock has seen significant growth, increasing by 11.8% to reach NPR 295.5 billion by the end of fiscal year 2079/80. The breakdown of this investment shows that 52.8% is in paid-up capital, 33.7% in reserves, and 13.5% in loans.

A survey conducted by the Economic Research Department analyzed data from 238 companies operating with FDI in Nepal. This survey serves as the basis for the ‘Foreign Direct Investment Survey Report, 2079/80,’ which offers a detailed analysis of the current trends and sectoral distribution of FDI in the country.

India remains the largest investor in Nepal, with investments amounting to NPR 103.45 billion, representing 35% of the total FDI. China follows with NPR 35.46 billion (12%), while Ireland has invested NPR 22.62 billion (7.7%). Other notable investors include Australia with NPR 19.06 billion (6.4%) and Singapore with NPR 18.81 billion (6.4%).

The report reveals that 59.7% of the total FDI in Nepal is concentrated in the industrial sector, with hydropower attracting 30% and manufacturing 29.4% of the investments. The service sector accounts for 40.2% of FDI, with banks, financial institutions, and insurance companies receiving 26% of the total investments.

Provincial data shows that Bagmati Province continues to dominate in attracting FDI, accounting for 59.7% of the total, followed by Gandaki Province with 15.1%, Koshi Province with 14.7%, and Madhesh Province with 8.8%. In contrast, Lumbini, Karnali, and Sudurpashchim provinces have each attracted less than 1% of the total FDI.

The survey also highlights the performance of FDI-operated manufacturing companies in Nepal, which have a capacity utilization of 60.69% and a return on equity of approximately 11.61%.

The findings from this survey are intended to inform policymakers as they work to develop strategies that enhance FDI inflow and optimize its impact on the Nepalese economy.