The Economic Research Department of the central bank, which released the 'Foreign Direct Investment Survey Report 2081/82,' attributed the growth primarily to increases in paid-up capital and accumulated earnings of foreign-backed companies. During the review year, total FDI inflow stood at Rs 12 billion, while net receipts registered at Rs 7.30 billion.
In terms of investment composition, paid-up capital accounts for the largest share at 54.2 percent, or Rs 184.21 billion. Accumulated income and reinvestment make up 36.9 percent (Rs 125.49 billion), while inter-company debt constitutes the remaining 8.9 percent (Rs 30.14 billion), reflecting a growing preference among foreign investors for self-capital.
India remains the largest investor in Nepal, commanding a 32.8 percent share with a total investment of Rs 111.64 billion. China follows in second place with Rs 31.44 billion, representing 9.3 percent of the total, trailed by Ireland at 7.3 percent, Australia at 6.5 percent, and Singapore at 5.4 percent. Nepal has successfully attracted foreign investment from 60 countries to date.
Sector-wise, industrial activities dominate the landscape, claiming 56.2 percent of total investments, while the service sector accounts for the remaining 43.7 percent. Specifically, the productive manufacturing sector and the hydropower sector hold equal shares of 27.8 percent each, amounting to Rs 94.54 billion and Rs 94.31 billion, respectively. The financial and insurance services sector ranks third with a 26.3 percent share.
Despite these figures, the report highlights a sharp geographical imbalance in capital distribution. Bagmati Province alone absorbs 64 percent of the total investment, equivalent to Rs 217.35 billion, whereas Karnali Province receives less than 1 percent, standing at just 0.3 percent.
Furthermore, a persistent gap continues to plague the approval-to-realization pipeline. Historically, only 29.6 percent of officially approved foreign investment commitments have translated into actual capital inflows. Analysts attribute this shortfall to administrative bottlenecks, delays in timely project implementation, and persistent complexities surrounding land acquisition. Meanwhile, foreign-invested industries currently operate at an average capacity utilization rate of 59.4 percent.
