The role of foreign direct investment ( FDI) in economic growth is primarily concerned with increasing

employment opportunities and overall economic well-being, especially in developing countries such as
Nepal. In this context, this paper aims to analyze the sector-wise effects of FDI on the economic growth
of Nepal defined by the Gross Domestic Product ( GDP) and FDI as dependent and independent
variables, thus defining the direct impact of FDI on GDP using sectoral data for 10 years (2007 to 2016)
as the key source of knowledge. The ultimate outcome of the inferential study predicts that FDI in the
manufacturing, tourism and agriculture sectors would have a very positive and important effect on GDP
over the defined timeframe. In this regard, results indicate that key players and the government need to
come up with a new strategy to free up international investment in other markets, as well as trying to
bring informal practices into the formal economy.

Finally, it is noted that the formulation of a new plan and policy will be a necessary prerequisite but not
a sufficient step towards growth, so that key suggestions are made for the effective steps and measures
to be taken by the competent authority to review and enforce the existing plan and policies, which, in
turn, will allow the flow of FDI to reach, intensify and maintain a high pace of economic growth.