The new government led by Prime Minister Balendra Shah (Balen) has been formed on March 27, Friday.
But with the formation of a new government and positive signals of policy stability, signs of renewed enthusiasm are emerging among domestic and foreign investors. After almost two decades of frustration caused by political instability, policy uncertainty, and bureaucratic hassles, it seems investors are gradually turning their eyes back to Nepal.
Reforms introduced by the new government like annulling outdated laws, easing foreign investment procedures, and promoting the automatic route for investors have encouraged the private sector that had long been remained in a ‘wait and watch’ mode.
A clear majority government, along with actions like bringing discredited middlemen operating in the name of the private sector under legal scrutiny, has started to boost investor confidence. Finance Minister Dr Swarnim Wagle has also been assuring private sector representatives that the government will facilitate business and maintain a stable investment environment.
According to a member of a delegation that recently met Dr Wagle, the minister even revealed that he had intervened to prevent the arrest of 18 more private sector representatives in order to avoid disrupting the business climate. “I have personally requested the Home Minister Sudan Gurung not to arrest 18 businesspeople and help create investment-friendly environment,” he has been quoted saying to the delegation.
The private sector also views the finance minister’s first decision to scrap outdated laws upon assuming office as a positive signal. In an economy that has faced nearly two decades of ‘policy paralysis,’ the surge in major investment commitments in recent weeks suggests the emergence of a new trend.
The government appears intent on sending a clear message that Nepal is once again becoming an investment-friendly destination. Within just few weeks, investment announcements worth over Rs 30 billion signal a shift, from waiting on the sidelines to actively entering the market.
The Chaudhary Group (CG) has begun constructing a world-class luxury hotel in Thamel at an estimated cost of Rs 15 billion, with plans to bring in the international brand ‘Ritz-Carlton’. This project is not merely about a hotel; it represents a strategic effort to position Kathmandu on the global map of high-end tourism.
Similarly, the Group’s ‘Summit Heritage Hotel’ under construction in Gorkha signals a shift in Nepal’s tourism model toward ‘high-value, low-volume’. With rooms expected to cost up to USD 500 per night, the hotel clearly targets high-spending international tourists.
According to Nepal Tourism Board (NTB), luxury travelers currently spend an average of more than USD 150 per day in Nepal. However, the Summit Heritage Hotel aims to cater to visitors willing to spend even more.
Likewise, the Carlsberg Group, which visited Nepal last week, has expressed its intention to invest Rs 10 billion. Vijay Kumar Shah, Founder and Chairman of the Jawalakhel Group of Industries (JGI), shared with Nepalkhabar that Carlsberg representatives made the commitment during their meeting with the finance minister Dr Wagle.
Recently, Raj Bahadur Shah, son of Vijay Kumar Shah, acquired a 15 percent stake, at a premium rate, in Gorkha Brewery that was fully owned by the Carlsberg Group. Raj Bahadur Shah was also the highest individual taxpayer last year, while his father Vijaya Kumar Shah has received similar recognition multiple times in the past years.
Citing policy stability, reform momentum, and market potential as key drivers, the Denmark-based multinational Carlsberg Group has announced plans to expand its investment in Nepal by Rs 10 billion.
Beyond this, investment interest in the energy sector is also rising with the formation of a stable government. Growing prospects for Nepal-India electricity trade have encouraged Indian and other foreign investors to propose new hydropower projects.
The government’s commitment to allowing joint investment by the private sector in transmission lines and energy trade has further boosted foreign interest in the energy sector, according to the private sector. Earlier, the Adani Group, led by Indian industrialist Gautam Adani, had shown interest in major hydel projects in the Karnali region, but political instability had stalled the progress. With the formation of a stable government recently, renewed interest from the Adani Group suggests the possibility of significant foreign direct investment (FDI) inflows into the energy sector.
Meanwhile, infrastructure projects aimed at improving Nepal-India connectivity like border road expansions and trade corridors are also sending positive signals to investors by enhancing market access and reducing costs.
Despite the encouraging signs, certain risks still remain.
The World Bank (WB) has projected Nepal’s economic growth at around 2.3 percent for this fiscal year, while the Asian Development Bank (ADB) has estimated it at approximately 2.7 percent. Remittances, a key driver of domestic consumption, could be negatively affected by geopolitical tensions in the Middle East, which may also impact tourism due to uncertainty of regular flights to Kathmandu.
Additionally, Nepal’s planned graduation from Least Developed Countries (LDC) group in November 2026 will gradually reduce trade benefits currently extended by various countries, and Nepal needs to work hardly on increasing its competitiveness in the global market.
Nevertheless, trends across sectors like hospitality, brewing, hydropower, infrastructure, and emerging provincial initiatives clearly indicate that the private sector is shifting from a ‘wait and watch’ mood to ‘active interest’.
The Rs 20 billion investment by the Chaudhary Group and Rs 10 billion commitment by Carlsberg are not just numbers, they represent a strong ‘vote of confidence’ in Nepal’s stable policy direction. However, sustaining this momentum will depend on three key factors – policy continuity and stability, effective implementation, and administrative reform.
If the new government can translate current confidence into tangible results, Nepal may witness a genuine wave of investment in the New Year 2083 Bikram Sambat.
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