Nepal's Foreign Investment Boom: A Promise of Economic Growth

Foreign investment commitments in Nepal reached NPR 16.4 billion in the first quarter of the fiscal year, showing promising growth, especially in the tourism sector. However, challenges remain in converting pledges into actual investments, highlighting the need for continued efforts to improve Nepal's investment climate.

Nepal is witnessing an impressive surge in foreign investment commitments, reaching NPR 16.4 billion in the first fiscal quarter, spanning from September to October. This includes a significant NPR 3.45 billion pledged solely in September, according to reports from the Kathmandu Post and data from the Department of Industry.

A breakdown of these commitments reveals NPR 150 million allocated to 21 industries via an 'automatic approval' system, introduced during the Third Nepal Investment Summit in April. This system, designed to minimize bureaucratic barriers, aims to attract foreign investors. Additionally, NPR 3.3 billion was pledged under the 'approval route' catering to 34 industries. The tourism sector led the pack, securing 64% of total commitments, followed by the services sector at 24%, manufacturing at 7%, agriculture at 4%, and information technology at 1%.

This distribution of investment indicates a growing confidence in Nepal's economic potential across diverse sectors. While the current fiscal year's progress is promising compared to the NPR 61.90 billion commitments in the previous year, actual realized foreign investment was only NPR 8.40 billion, as reported by Nepal Rastra Bank. This gap raises concerns about the realization of investment promises into real economic growth. Nonetheless, the ongoing investment surge reflects a renewed economic optimism and the country's potential for advancements across various industries.

(With inputs from agencies.)