The growing Nepali diaspora in the United States has made notable contributions to Nepal, particularly through remittances and investments. Nepalis in the US contribute over a billion dollars in remittances annually, with 13.2% of the community investing in their homeland.

The Institute of Integrated Development Studies (IIDS), a Kathmandu-based think tank, recently released a study titled "Nepali Migrant Dreams in the American Landscape: An Exploration of the Nepali Diaspora in the United States”. The study explores the multifaceted aspects of the Nepali diaspora in the US, exploring migration dynamics, settlement processes, and socio-economic integration. It highlights the community's significant contributions to both Nepal and the United States.

The report underscores the potential of the Nepali diaspora in the US to play a key role in Nepal's development. "By capitalising on their diverse skills, knowledge and resources, aligned policies and initiatives can foster a mutually beneficial relationship, driving progress and prosperity in both their adopted homeland and their country of origin," states the report.

According to the findings, 13.2% of the Nepali diaspora have invested in Nepal, while 9.5% have invested in the United States and just 0.4% elsewhere. This points to a substantial untapped potential for investments in Nepal, highlighting the need for more attractive investment opportunities or reduced barriers to encourage greater participation from the diaspora.

Members of the Nepali diaspora who are in the more mature stages of the diaspora ladder have made investments in sectors such as hydropower, agriculture, hospitals and real estate, either in individual capacity or through investment groups.

Land, Real Estate Top Investments

Land and real estate remain the top investment choice for the Nepali diaspora, with 55.6% of respondents identifying it as their primary investment avenue. This is followed by the banking and financial sector at 35.2%, and 20.4% investing in hydroelectricity or clean energy. Other notable sectors include travel and tourism (11.1%), education and agriculture (7.4% each), ICT or media (6.5%), and manufacturing (5.6%). The majority of these investments are concentrated in the Kathmandu Valley.

While many diaspora members express a willingness to invest in lower-return ventures due to their strong emotional ties to Nepal, they cite significant bureaucratic red tape as a major deterrent. The report reveals that the investment process is often cumbersome, with many respondents describing the country's investment climate as "not safe”. High bureaucratic hurdles, lengthy procedures, and a lack of transparency further discourage potential investors. Despite these challenges, some members of the diaspora remain committed to investing in Nepal, driven by their deep-rooted connections to their homeland.

The report reveals a clear correlation between income levels and investment behavior among the Nepali diaspora. Only 9% of those earning less than $15,000 annually have invested in Nepal. This percentage increases to 10% among those earning between $15,000 and $45,500, and to 12.7% for those in the $45,500 to $80,000 range. The highest investment rate, 17.7%, is observed among individuals earning over $80,000 annually. This trend aligns with remittance patterns, with wealthier diaspora members more inclined to invest in sectors such as real estate, business and clean energy.

Strengthening Investment Channels

Among these, investment promotion roadshows have been identified as a key strategy to engage the Nepali diaspora directly. These events can showcase high-potential sectors, share success stories of diaspora entrepreneurs who have successfully invested in Nepal and provide opportunities for potential investors to interact with government officials. By fostering direct interaction, these roadshows can help catalyse increased investment inflows into Nepal, the report states.

The report also recommends establishing diaspora investment funds to channel financial contributions from the diaspora into impactful projects. These funds could target key sectors such as education, healthcare and renewable energy, offering a structured mechanism for collective investments that align with Nepal’s development priorities. By offering a platform for collective action, these funds could not only drive meaningful change in Nepal but also foster a stronger sense of connection and ownership among the diaspora.

Citing the initiatives taken by the Embassy of Nepal in the US, which has initiated a dialogue process with the support of the World Bank and IIDS to strengthen Nepal’s IT sector, the report suggests replicating this in other key sectors to further boost economic development.

Additionally, the report highlights diaspora bonds as a viable tool for mobilising financial resources. It cites successful examples from Countries like Israel and India where such bonds have raised significant funds for national development. For instance, during its balance of payments crisis in the 1990s, India raised $1.6 billion through India Development Bonds (IDBs). Nepal could adopt a similar model to tap into the financial resources of its global diaspora, particularly in sectors requiring long-term investment.

According to the report, diaspora bonds can help diversify funding sources by borrowing from expatriates, especially during times of crisis. Drawing on the successful examples of Israel and India, which collectively raised over $35 billion through such bonds, the report states, "Nepal could consider a similar model to mobilise financial resources from its diaspora, particularly for critical sectors requiring long-term investment”.

A Major Remittance Contributor

The IIDS report highlights the significant economic contributions of the Nepali diaspora, with 59.6% of Nepalis in the United States sending remittances to Nepal. In 2023, remittances from the US were estimated at $1.28 billion, accounting for 11.6% of Nepal's total remittance inflow.

The average annual remittance per sender from the US in 2023 was $8,633.04, which is significantly higher than per-worker contributions from other major remittance-sending countries. For example, remittances from the US were 1.51 times higher than those from Qatar, 2.28 times higher than Malaysia, 1.72 times higher than the UAE, and 1.95 times higher than Saudi Arabia.

This high per capita remittance contribution reflects the relatively higher earning potential of Nepali workers in the US, better employment opportunities and a stronger inclination to remit funds. In comparison, countries like Saudi Arabia and Malaysia, while contributing significant total remittance amounts, have lower per capita figures due to larger migrant workforces and comparatively lower average incomes. These findings reaffirm the US as the most lucrative destination for Nepali migrants, offering unmatched per capita remittance contributions.

According to the IIDS report, remittance behaviour is closely tied to income levels, with middle-income Nepalis ($45,500–80,000) emerging as the most consistent and significant contributors. Among individuals in this income group, 67% send remittances, making them the backbone of Nepal’s remittance inflow.

Nepalis earning $80,000 and above send the second-highest share of remittances, with 63.6% sending funds to their homeland. While their contributions are substantial, the slightly lower percentage may reflect increased financial obligations or priorities in the US, such as investments, savings, or other personal expenses.

Among Nepalis earning $15,000–45,500, 59.5% percent remit funds, demonstrating a strong commitment to supporting families back home despite more limited incomes. For those earning below $15,000, 45.5% send remittances, highlighting the financial constraints faced by lower-income earners like students and part-time workers.

Expanding Professional Presence

The Nepali diaspora in the US has established a strong presence across a wide range of professional sectors, with 34.7% employed in the technology industry. This includes roles in data engineering, software development, digital marketing, biotechnology and engineering fields such as chemical and mechanical engineering.

The healthcare sector ranks as the second-largest employer, engaging 16.1% of the diaspora in essential professions such as medicine, nursing, health administration, medical research and public health. Following this, 8.2% of Nepalis are employed in the finance sector in roles spanning accounting, project management, business consulting and economics.

In the education sector, 7% of Nepali professionals work in teaching, research, academic consultancy and training. Meanwhile, 6.8% are employed in the food and hospitality industry, focusing on catering, restaurant management and tourism-related services.

Additionally, 6.3% of the diaspora are involved in legal, public service and consulting roles, engaging in areas such as government positions, policy development, social work and international organisations.

The diverse career paths of the Nepali diaspora illustrate their expanding professional presence and substantial contributions to high-demand sectors such as technology, healthcare and finance, as well as their impactful roles in education, hospitality, public service, and other essential industries.

A Growing Community

The Nepali diaspora in the US has experienced remarkable growth, with current estimates ranging from 185,000 to 215,000 individuals, based on 2023 data derived from the 2020 US Census. About 68.3% of Nepalis in the US have arrived since 2010. The largest Nepali communities are concentrated in Texas, California, Virginia, Maryland, and New York.

The Nepali population in the US has grown significantly over the years, increasing from 9,000 in 2000 to 59,000 in 2010, 198,000 in 2019, and 208,748 by 2023. Migration began in the mid-20th century, with the first wave in the 1940s and early 1950s, when Nepalis came to study or join the diplomatic corps. Migration trends accelerated in the 2000s, driven primarily by educational opportunities. Many Nepali students were drawn to US universities through scholarships and academic programmes, and over time, a significant number transitioned to permanent settlement.

Key motivations for migration include educational opportunities (58%), career advancement (42%), better living standards, and an improved quality of life (38%). Economic factors such as limited job prospects in Nepal (25%) and better opportunities abroad (19%) also play a role. Additionally, Nepal's unstable political climate (26%) continues to drive migration to the US.

The US Department of State's Electronic Diversity Visa (EDV) programme has further contributed to the expansion of the Nepali diaspora. The programme awards up to 55,000 diversity visas annually to individuals from countries with lower levels of recent immigration to the US. Between 2012 and 2021, the US received 5,302,936 applications from Nepal for the EDV, with the total, including spouses and children, rising to 8,621,604. Nepal ranks second among Asian countries for EDV applicants, with 688,502 applications submitted in 2021 alone (US State Department, 2023). On average, 4,098 applicants from Nepal are selected annually, accounting for 7.45% of all EDV awardees worldwide.

(This report was originally published in   January 2025 issue   of New Business Age Magazine.)