Foreign direct investment (FDI) commitments jumped by a whopping 93.34 percent in the first eight months of the current fiscal year, with investment pouring into small-scale businesses following the government’s move to lower the FDI threshold. According to the Department of Industry, FDI commitments totaled Rs 29.13 billion for 253 projects during the review period. Most of the proposed FDI is for the establishment of small-scale business ventures, the department’s data shows. The country received pledges totaling Rs 21.83 billion for establishing 238 small-scale business ventures in the review period, which is 74.93 percent of the total pledge made by foreign investors. On May 29, 2022, through the annual budget for the fiscal year 2022-23, the government reduced the minimum threshold for FDI to Rs 20 million, from earlier Rs 50 million, to attract additional foreign investment amid slowed economic growth.

The department’s statistics show that FDI commitments totaling Rs 3.63 billion came for 12 medium-scale ventures during the review period. FDI commitments for Rs3.66 billion came for three large-scale ventures. Officials at the department say that South Korean companies have proposed setting up investment companies in Nepal. Sector-wise, Nepal received the highest investment commitment in the service sector amounting to Rs 18.95 billion for 90 projects, followed by Rs 6.14 billion in the tourism sector for 115 projects. The FDI commitment in the manufacturing sector was Rs 3 billion for 30 projects.