Foreign Investment Increasing Through Automatic Route

The automatic system introduced by the government a year and a half ago to approve foreign investment projects is increasingly gaining popularity among investors.

The Department of Industry (DoI) currently approves foreign investment projects and amounts either through the traditional means, requiring investors to register and seek approval in person, or via the automatic system. The department’s data show that since the first month of the current fiscal year (FY 2025/26), foreign investors have increasingly opted for the automatic route over the conventional process.

In the first quarter of the fiscal year, the DoI approved a total of 382 projects across sectors such as agriculture, tourism, information technology, and mining. Of these, 251 projects were cleared through the automatic route. The total investment amount, however, remains higher in projects approved through the traditional route. This is because the automatic route currently allows approval for investments of up to Rs 500 million only. The Ministry of Industry, Commerce and Supplies has announced plans to eventually approve all foreign investments through the automatic process.

According to DoI statistics, the 131 projects approved through the traditional route represent a total investment commitment of Rs 34.32 billion, while the 251 projects cleared via the automatic route account for Rs 2.37 billion. Together, the total committed investment from both routes stands at Rs 36.68 billion.

The automatic route was first implemented on April 29, 2024 during the Third Investment Summit. For this, the Department of Industry launched an electronic approval system—www.imis.doin.gov.np—through which foreign investors can obtain approval for projects and investments in Nepal.

During the first quarter of the current fiscal year, the department received permissions for 7 large, 6 medium, and 369 small projects. In mid-October to mid-November alone, 69 small projects were approved, while no large projects received approval that month. Most projects approved were related to information technology, tourism, and service industries.

The highest investment commitment came from agriculture-based industries. The department highlighted that a joint venture between Himalayan Food International Nepal and Shanghai Qian Food Company Limited, including a slaughterhouse for exporting beef, attracted Rs 20 billion in Chinese investment.