Foreign direct investment (FDI) commitments to Nepal rose by 52.23 percent year-on-year in the first six months of the current fiscal year, 2025/26, despite a sharp slowdown after the Gen Z-led protests in September, data from the Department of Industry show.
Between mid-July 2025 and mid-January 2026, Nepal received FDI commitments worth Rs 39.23 billion across 475 projects, up from Rs 25.78 billion for 354 projects in the same period last fiscal year, according to the department’s monthly FDI reports.
The surge was driven largely by strong inflows in the early months of the fiscal year. In the first month (mid-July to mid-August), FDI commitments jumped to Rs 24.1 billion, compared to Rs 9.15 billion in the same month a year earlier. The momentum continued in the second month, with commitments rising to Rs 8.99 billion, up from Rs 3.83 billion in the corresponding period last year.
However, FDI commitments declined year-on-year in the subsequent four months, a trend observers largely attribute to a weakened investment climate following the Gen Z protests in September.
From mid-September 2025 to mid-January 2026, monthly FDI commitments fell to Rs 2.04 billion, Rs 1.54 billion, Rs 1.91 billion, and Rs 599.5 million, respectively. In the same months last fiscal year, commitments stood higher at Rs 3.45 billion, Rs 2.22 billion, Rs 2.11 billion, and Rs 4.99 billion.
The protests erupted on September 8 after the KP Sharma Oli government imposed a sudden ban on more than two dozen social media platforms. What began as demonstrations against the ban quickly escalated into nationwide protests targeting corruption and political elites. The unrest resulted in 77 deaths, widespread arson and vandalism, and the collapse of the Oli government. The violence and lawlessness that followed have significantly dented investor confidence, observers say.
During the current fiscal year so far, FDI commitments have been recorded in seven large industries, eight medium-scale industries, and 460 small industries. In the month of Poush (mid-December to mid-January) alone, 36 small industries received foreign investment commitments worth Rs 599.5 million.
Sector-wise, agro- and forestry-based industries attracted the highest investment value in the past six months, with Rs 21.89 billion committed to 13 projects. The tourism sector followed, receiving Rs 10.54 billion across 145 projects.
Service industries secured commitments worth Rs 3.46 billion for 31 projects, while the manufacturing sector attracted Rs 2.03 billion for 27 projects. The information and communication technology (ICT) sector recorded the commitments for the highest number of projects—257—but with a comparatively lower value of Rs 1.07 billion.
The energy sector received Rs 184.25 million in FDI for a single project, while the mineral sector secured Rs 45 million for one project, according to the Department of Industry.
Cumulative FDI commitments to Nepal now stand at Rs 675.43 billion across 7,713 projects. However, actual FDI inflows remain low. Nepal received Rs 7.47 billion in foreign direct investment (equity only) in the first five months of the current fiscal year, according to Nepal Rastra Bank data. The figure stood at Rs 6.03 billion in the same period last fiscal year.
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