September 14, 2022 | Investopaper
The inflow of foreign investment in Nepal has increased in recent years.
According to a study by Nepal Rastra Bank, foreign investment has increased by 14.8 percent in the fiscal year 2020/21 as compared to the previous year. The FDI inflow has reached Rs. 227.94 billion [As of Mid-July 2021]. During the same period of the previous year, such inflows stood at Rs. 198.52 billion.
FDI has started to increase as the government has relaxed the polices and laws regarding foreign investment.
Paid-up capital is the major component in FDI stock accounting for 53.9 percent of total FDI stock. The share of reserves and loans in total FDI stock stood at 31.6 percent and 14.5 percent respectively.
Electricity, gas, steam and air conditioning sector has the highest FDI stock of Rs.70.1 billion (30.8 percent of total) followed by manufacturing sector (Rs. 67.4 billion) and financial and insurance services sector (Rs. 61.4 billion).
Country-wise, India remained in top position with Rs.75.8 billion FDI followed by China (Rs. 33 billion), Ireland (Rs. 16.5 billion), Singapore (Rs. 15.5 billion), and Saint Kitts and Nevis (Rs. 14.5 billion).
Looking into province-wise investment, Bagmati province constitutes the highest share of FDI (56.1 percent) whereas Karnali and Sudur Paschim Province account for less than 1.0 percent of total FDI.