Strategic Importance of FDI for Nepal
Summary
Foreign direct investment (FDI) is vital for Nepal's economic growth, offering long-term capital, job creation, and technology transfer, but Nepal faces challenges such as political instability and bureaucratic inefficiencies that hinder FDI inflows.
Key Points
- Foreign direct investment (FDI) is essential for Nepal’s economic growth, expanding infrastructure and creating jobs.
- Nepal’s FDI inflows have dramatically fallen from $185 million in 2019 to $57 million in 2024 due to political instability and weak institutional capacity.
- Challenges include bureaucratic inertia, regulatory inconsistencies, poor legal frameworks, and a difficult business environment.
- Successful FDI attraction requires consistent policies, robust institutions, streamlined bureaucracy, and political stability, which Nepal must pursue through reforms.
