Nepal's IT and digital ambitions are being significantly accelerated by the Nepalese diaspora, which acts as a bridge for global expertise, investment, and collaboration. This is transforming the country's outsourcing industry and contributing to a "brain gain" phenomenon.
Diaspora-Led Companies and the Outsourcing Sector
Several prominent Nepali IT companies, such as Fusemachines, Leapfrog Technology, and CloudFactory, have founders and key executives from the diaspora. These individuals bring back global business practices and networks, which has been a major factor in the growth of Nepal's outsourcing industry.
Growth and Value: The outsourcing sector is experiencing a robust upward trend. In fiscal year 2024/25, 124 new IT, software development, and BPO companies were registered. IT service exports were valued at approximately USD $515 million in 2022, marking a 64.2% growth from the previous year. This demonstrates the global demand for Nepali IT services.
Foreign Investment: Foreign companies like Deloitte and IBM have established operations, taking advantage of Nepal’s skilled, low-cost labor. The IT industry has been exempted from the minimum investment threshold for foreign investors, making it more accessible for smaller-scale investments. The software market is growing at about 9.66% annually.
Strategic Opportunities for Collaboration
The Nepalese diaspora is a vast, underutilized resource that can be leveraged through a multi-pronged approach.
Knowledge and Skill Transfer: The diaspora can directly mentor young professionals and students in Nepal through programs like the new Mentorship, Advisory, Assistance, Resilience, and Growth Platform. This helps bridge the skill gap in advanced technologies like AI, cybersecurity, and cloud computing.
Investment and Joint Ventures: Policies allowing 100% FDI in the ICT sector make it easier for the diaspora to invest in and even own local tech firms. The government is also establishing targeted funding mechanisms, such as the Startup Nepal Seed Fund Scheme, to provide early-stage capital.
Collaborative Projects: Diaspora professionals can partner with local firms on outsourcing projects, providing both jobs and exposure to international standards. They can also collaborate on projects to solve local problems, such as using AI for traffic management or creating digital education platforms for rural areas.
Policy and Governance: The diaspora can play a crucial role in shaping national strategies for AI by sharing international best practices. This can be formalized through local committees aligned with national frameworks like the National AI Policy, 2025, which was approved by Nepal's Cabinet in August 2025.
Challenges and the Path Forward
Despite the high potential, effective collaboration faces several challenges:
Brain Drain: The "brain gain" is a promising trend, but the country still struggles to retain a large number of skilled professionals who leave for better opportunities abroad.
Infrastructure and Regulations: Challenges remain with limited digital infrastructure in rural areas and the need for further streamlining of tax-related policies and intellectual property enforcement.
Institutionalizing Efforts: Organizations like the Non-Resident Nepali Association (NRNA) must transition from ad-hoc philanthropic efforts to structured, transparent, and legally compliant partnerships. Formalizing a legal entity with the Social Welfare Council and signing MoUs with government bodies will be crucial for effective, long-term collaboration.