KATHMANDU: The government received foreign direct investment (FDI) commitments worth Rs 41.79 billion over the first nine months of the current fiscal year 2025/26, ending mid-April. Such commitments amounted to Rs 57.97 billion in the same period of the previous fiscal year.

Data released by the Department of Industry (DoI) on Wednesday shows that FDI for 615 projects was approved during the review period. Of these, 426 projects with an investment commitment of Rs 4.09 billion received approval through the automatic route. Meanwhile, 189 projects with significant investment commitments worth Rs 37.70 billion were approved through the standard approval route.

In the ninth month, Chaitra (mid-March to mid-May), alone, the DoI approved investment commitments worth Rs 1.13 billion for 61 projects. All the commitments that came during the month were for small-scale industries.

While the FDI commitments look significant, a considerable discrepancy exists between approved FDI and the actual net FDI inflows. According to the Nepal Rastra Bank (NRB), actual net FDI inflows amounted to only about 31.9% of the total approved FDI between fiscal years 1995/96 and 2023/24.

Investment commitments for share purchase and share subscription agreements amounted to Rs 10.94 billion for 42 projects in the review period. Between mid-March and mid-April, four such agreements were approved with investment commitments totaling Rs 5.14 billion.

Similarly, 38 projects received approvals under technology transfer agreements (TTA) during the review period.

These FDI projects approved in the first nine months of the current fiscal year have pledged to generate employment for 22,316 people, including 640 jobs from projects approved in the ninth month alone.

Meanwhile, foreign investors repatriated Rs 16.81 billion in dividends over the nine months, 77.13% more compared to the same period of the previous fiscal year.

According to the DoI, the agro and forestry sector emerged as the largest recipient of FDI in value, securing over Rs 22 billion in investment commitments for 16 projects. The tourism sector came second with Rs 11.46 billion committed in 164 projects.

In contrast, the information and communication technology (ICT) sector accounted for the highest number of projects, 346 in total, or more than half of all approvals. However, these projects attracted investment commitments of only Rs 1.46 billion. The trend reflects the low capital requirements and startup-driven nature of ICT ventures.

The manufacturing sector drew Rs 2.55 billion in investment commitment for 38 projects, while the service sector recorded FDI commitments of Rs 3.89 billion in 47 projects.

However, traditionally significant sectors such as energy and minerals attracted minimal foreign investment. The energy sector received commitments of just Rs 234 million from two projects, while minerals attracted Rs 115 million from two projects in the nine months.

The infrastructure sector failed to attract even a penny in the review period.