Nepal's Strategic Blueprint for IT Innovation
Nepal's government is shifting its approach to the IT sector, moving from ad-hoc initiatives to a comprehensive strategy that formally integrates the Nepali diaspora's contributions into a national innovation ecosystem. This new policy framework, a "collaboration for strength sharing," aims to address the long-standing challenges of bureaucratic hurdles, brain drain, and a fragmented approach to development. By synergizing the strengths of academia, startups, and youth, the government seeks to transform the IT landscape and position Nepal as an emerging tech hub.
Key Policy Pillars and Their Impact
The new strategy is built on a multi-pronged approach that recognizes financial support isn't enough. It focuses on creating a fertile environment for innovation through targeted policy, infrastructure, and skill-building initiatives.
Fostering an Enabling Policy Environment : The government is actively developing a clear policy framework to remove barriers for both local and diaspora professionals. The planned Startup Nepal Action Plan aims to simplify regulatory processes, provide legal assistance for patents, and offer tax incentives. This directly addresses the "bureaucratic hurdles" that have historically deterred large-scale diaspora investment. By creating a more predictable and supportive business environment, the government signals that it is open for business and values diaspora engagement.
Another critical piece is the National Innovation and Startup Policy for Higher Education Institutions. This policy is designed to cultivate a campus-based innovation culture. It provides clear guidelines on intellectual property (IP) ownership and revenue sharing between universities and student startups, thereby encouraging students and faculty to engage in entrepreneurial activities without fear of legal ambiguity.
Developing Robust Infrastructure : To support a vibrant tech ecosystem, the government is investing in both physical and digital infrastructure. The plan includes establishing innovation labs and maker spaces in schools to promote hands-on STEAM education. This initiative builds a foundation of tech literacy from the ground up.
Furthermore, the establishment of Technology Business Incubators & Research Parks within or in collaboration with academic institutions is a direct effort to provide student entrepreneurs with the resources they need to succeed. These spaces offer crucial mentorship, business development services, and networking opportunities, helping to bridge the gap between academic theory and market-ready products.
Creating "Brain Gain" Opportunities: A central goal of the new strategy is to mitigate the "brain drain" by creating an ecosystem that incentivizes skilled professionals to either return to Nepal or collaborate remotely. By fostering a vibrant startup culture and providing opportunities for senior leadership and research-oriented roles—which are often lacking—the government aims to create fulfilling career paths within the country. This effort recognizes that while remittances are important, the transfer of knowledge and expertise is a more powerful, long-term asset.
The planned Mentorship, Advisory, Assistance, Resilience, and Growth Platform is a crucial part of this. It will act as a centralized hub to connect young entrepreneurs with experienced professionals from the diaspora, ensuring that their knowledge of cutting-edge technologies like AI and cloud computing is systematically shared. This formalizes and scales the existing mentorship efforts of organizations like the Non-Resident Nepali Association (NRNA).
Financial Empowerment for Innovation : To address the limited access to finance, the government is introducing several targeted funding mechanisms. The Startup Nepal Seed Fund Scheme will provide early-stage capital for proof-of-concept and prototype development, while a broader Government Startup Fund will invest in Alternative Investment Funds (AIFs) that then back promising startups. Additionally, a Credit Guarantee Scheme will make it easier for young entrepreneurs to secure loans without collateral, a significant barrier for many new ventures.
Key Data Points to Include
Contribution to GDP: Nepal's Information and Communications Technology (ICT) sector is projected to contribute 1.94% to the national GDP in the fiscal year 2024/25. While this percentage may seem small, it represents a consistent upward trend and highlights the sector's increasing importance. For context, in the fiscal year 2022/23, the ICT sector had a revised growth rate of 4.15%, which further demonstrates its rapid expansion.
Export Revenue: The IT sector is a significant source of foreign exchange. IT service exports were valued at approximately USD 515 million in 2022, representing a substantial 64.2% growth since 2021. This showcases the global demand for Nepali IT services and the potential for further growth through international business partnerships facilitated by the diaspora.
Startup Ecosystem: Nepal's startup ecosystem is ranked among the top 110 countries globally on the StartupBlink Ecosystem Index. Kathmandu, as the primary hub, is home to a significant number of startups, with specific strengths in Software & Data and Edtech. The government has recognized this potential, allocating NPR 1 billion for the 2024/25 Startup Fund with the ambitious goal of incubating 10,000 new enterprises.
Investment and Demographics: Since 2020, over $40 million has been invested in Nepal's startup ecosystem. This is often driven by diaspora entrepreneurs and investors. A key demographic factor is the high youth involvement, with over 83% of IT freelancers being between 20 and 29 years old, highlighting the need for policies that target and support this young, talented workforce.
Foreign Direct Investment (FDI): While the IT sector is an area of growth, FDI still faces significant hurdles. A minimum FDI threshold of NPR 20 million (approximately USD 154,000) has been set for foreign investors, and a recent simplification of the approval process for investments up to NPR 500 million is a positive step. However, the article could emphasize that more must be done to attract larger-scale investments and reduce red tape.
Nepal's Global IT Presence
While there isn't a single comprehensive, public list of all Nepali IT companies that have participated in every international industry showcase event except the showcase of Designco Nepal in the year 1996. '97, '99, to showcase and technically defend the capacity of Nepal in CeBIT Hannover, Germany.
While a comprehensive list is not available, Nepali IT companies are gaining global recognition through participation in organized events and individual efforts. Key examples include:
Organized Delegations: Initiatives like Tech Peak Nepal and the Nepal IT Roadshow Australia, led by organizations like the Confederation of Nepalese Industries (CNI) and the Nepal Association for Software and IT Services Companies (NAS-IT), have successfully showcased companies at international events like the Shared Services and Outsourcing Week (SSOW) Conference in Orlando.
Prominent Companies: Notable companies like Verisk, Leapfrog Technology, and Brain Digit IT Solutions are known to work with international clients and participate in global forums.
These companies often specialize in custom software, web and mobile app development, and outsourcing services, highlighting Nepal's potential as a competitive destination in South Asia.
Organized Roadshows and Delegations
Tech Peak Nepal: This initiative, often organized by bodies like the Confederation of Nepalese Industries (CNI) in collaboration with organizations like the American Chamber of Commerce in Nepal (AmCham Nepal), has been a key driver.
For example, at the Shared Services and Outsourcing Week (SSOW) Conference in Orlando, a dedicated "Nepal Pavilion" showcased companies such as: Sakchha, Innovate Tech, F1Soft, Simjung, Cynical Technology, Monal Tech
Nepal IT Roadshow Australia: The Nepal Association for Software and IT Services Companies (NAS-IT) has been organizing events like the "Nepal IT Roadshow Australia" to promote trade and investment in the IT sector. This brings together Nepali tech entrepreneurs and Australian businesses.
Industry Associations and Collaborations
NAS-IT plays a crucial role in facilitating international participation. They often receive invitations for their member companies to attend global events.
They have been invited to events like the Industry AI Expo in Korea and have hosted the Asia Pacific ICT Alliance (APICTA) Exco Meeting in Nepal, which brought tech leaders from 16 countries.
NAS-IT member companies get opportunities to showcase products and services, network with international partners, and participate in B2B meetings.
Individual Companies
Many companies, both large and small, also participate on their own. While a complete list is unavailable, some of the prominent names in the Nepali IT sector that are known to work with international clients and attend global forums include: Verisk, Leapfrog Technology, Brain Digit IT Solutions, AITC International
The participation of these companies highlights Nepal's growing potential in IT-enabled services, software development, and outsourcing. They often specialize in areas like custom software, web and mobile app development, digital marketing, and AI.
Current status of outsourcing companies of Nepal
The current status of outsourcing companies in Nepal in 2025 is quite promising and growing rapidly, particularly in the IT and business process outsourcing (BPO) sectors. Here are the key points:
Growth and Investment: Nepal is becoming an emerging hub for outsourcing and IT services, attracting foreign investment due to competitive costs, a young and educated workforce, and investor-friendly reforms. In the fiscal year 2024/25, about 124 new IT, software development, and BPO companies were registered, contributing significantly to Nepal’s economy and employment. Foreign companies such as Deloitte, IBM, Fusemachines, and CloudFactory have established operations, leveraging Nepal’s skilled IT talent pool.
Outsourcing Industry Highlights: The tech sector, including IT services and BPO, is booming with expanding job creation and new startups focusing on fintech, AI, and cloud computing.Nepal offers low labor costs and no minimum investment requirements for IT startups, which encourages more foreign and local companies to enter the outsourcing market. The software market is growing at about 9.66% annually with projections to reach significant scale by 2029.
Regulatory Environment: The Ministry of Labor has specified conditions and licensing requirements for outsourcing companies to ensure compliance with labor laws, including minimum wages, social security, provident funds, and other employee benefits. Employers must only outsource non-core/main work and follow regulations to protect workers engaged through outsourcing agencies.
Business Opportunities: Nepal’s strategic location, improving infrastructure, and government incentives are drawing more global companies to incorporate and set up outsourcing ventures. The increasing incorporation of foreign firms and rising investments in outsourcing signal strong future growth.
Challenges: Despite growth, Nepal’s outsourcing sector faces challenges such as a relatively small domestic market, geographic and logistic limitations, and the need for continuous regulatory compliance.
Overall, Nepal’s outsourcing industry, especially in IT and BPO, is on a robust upward trend in 2025, fueled by foreign investments, a skilled workforce, and enabling policies, making it a competitive destination for outsourcing services in South Asia
My personal and professional achievements
Visionary Leadership and Policy Shaping
A trailblazer in Nepal's IT sector, I pioneered the country's first formal academic IT programs. My coordination with institutions like IIT Kanpur and IIT Delhi was instrumental in launching the first BE, ME, and PhD programs at the Institute of Engineering (IOE), Pulchowk, under Tribhuvan University. I was responsible for authoring the government's first comprehensive report on the state of the IT industry in the mid-1990s, and my advocacy led to proposals for 'Institutions of National Importance' to foster high-quality education to support high-quality education tailored to global opportunities and challenges.. I have also played a key role in shaping national ICT policy, serving on the Prime Minister's IT Council.
My Early Entrepreneurship and International Representation:
My contributions include advisory services to the Rural Telecom Development Fund Board under Nepal Telecommunications Authority (NTA), and successfully executing major software projects: Nepal Electricity Authority funded by ADB (Asian Development BanK), Nepal Water Supply Corporation supported by French grant, at NTC, NEA, NWSC, and Himal Cement supported by German grant, Nepal Telecommonication, Jyoti group etc
My entrepreneurial journey began in 1991 when I founded one of Nepal's first software companies. This venture was pivotal in training the country's first generation of IT professionals. I was also the first to represent Nepal’s technical capabilities internationally at prestigious events such as CBI in Rotterdam and CeBIT Hannover Expo in Germany in 1996, 1997, and 1999. I've made significant contributions to the global and local IT landscape, actively promoting Nepal's IT sector internationally. I traveled to India, UK, Germany, Switzerland, India, and Austria to gain firsthand insights into the evolving global IT industry under the rapid advancement of AI, AI ethics and AI empowerment tools and have been able to get connected with international experts and Nepalese professionals abroad. My global outreach further strengthened her long-standing collaborations with the Non-Resident Nepali (NRN) community. I chaired the ICT conference organized by NRNs from 59 countries, held at Soaltee Hotel, and continues to play an influential role in promoting Nepal’s IT industry both locally and globally.
Beyond entrepreneurship : I have had a lasting impact through my advisory work with the Rural Telecom Development Fund Board under the Nepal Telecommunications Authority (NTA) and the successful execution of major software projects funded by international grants at key national institutions like NTC, NEA, NWSC, and Himal Cement. My "Nepal Has Got ICT Talents" movement has inspired and empowered a new generation of IT professionals, leading to their victories in international competitions. I am now focused on promoting the adoption of artificial intelligence in Nepal.
Influential Contributions and Youth Empowerment :
I have played a key role in shaping national ICT policy, serving on the Prime Minister's IT Council. My advisory work with the Rural Telecom Development Fund Board ( RTDF ) under the Nepal Telecommunications Authority (NTA) and successful execution of major software projects funded by international grants have had a lasting impact. My "Nepal Has Got ICT Talents" movement has inspired generations of young people and led to their victories in international IT competitions.
Currently, I am focusing on social services and promoting AI in schools including assisted tools in agriculture, health and education in Nepal among rural students including women.
Conclusion: A Way Forward Through Collaboration
Nepal's strategic blueprint represents a significant shift in its engagement with the diaspora, moving from passive acknowledgment to active integration. By transforming informal, uncoordinated efforts into a cohesive, national-level collaboration, the government is seeking to leverage the diaspora's financial capital, specialized knowledge, and international networks to build a self-sustaining innovation ecosystem. The success of this strategy hinges on the consistent effort of all stakeholders to implement these policies, thereby transforming the "sporadic effort into a consistent and powerful force for national development.