This policy brief examines Foreign Direct Investment (FDI) flows from India to Nepal since the 1990s, analysing key trends, challenges, and opportunities. FDI from India has played a critical role in Nepal's economic development, particularly in sectors like hydro energy, manufacturing, services, and infrastructure. The brief explores how regulatory frameworks, political instability, internal security and bilateral relations have influenced investment patterns. It also highlights recent policy reforms aimed at attracting more FDI and fostering a conducive business environment. The brief concludes by offering recommendations to enhance investment cooperation between the two nations, addressing bottlenecks, and promoting sustainable economic growth in Nepal.