Sakar Pathak was already working for international clients when he completed his BSc CSIT in 2017. After graduating, he continued freelancing until 2020, focusing on web and app development. Later that year, he became CTO at the Itatari-based technical arm of UK-based firm Aspiring Tech, where he built production-grade applications for clients requiring software like CMS, hotel management and pharmacy inventory systems.
Between February and October 2022, Pathak took on short-term projects for US-based WhiteHat Engineering before joining Finnish firm Resimator Oy as a remote Senior Software Developer. There, he worked on iOS/Android apps and full-stack web development—an experience he says sharpened both his skills and confidence.
In mid-2023, he joined Leapfrog Technology as a Senior Software Engineer. He finds the role rewarding, citing good pay from international clients and Nepal’s lower cost of living, which enhances the value of his earnings. Outside his main roles, Pathak has explored virtual reality (VR), artificial intelligence (AI) and multiverse projects—opportunities he believes would have been rare in traditional overseas jobs. “Workloads here are heavier,” he says. “But so is the growth.”
Pathak's story mirrors that of many young Nepali developers who are building successful, globally connected tech careers from home, while limited local job opportunities are forcing many outside the country. His journey from freelance developer to remote engineer for international clients reflects the promise of Nepal’s growing IT sector.
Thousands of tech professionals like Pathak work for Kathmandu-based companies that primarily serve clients in the US. In recent years, Nepal has emerged as one of the world’s most promising hubs for US health technology development. Leading US firms such as Cotiviti, Cedar Gate Technologies and Leapfrog Technology have established large technical and product development teams in Nepal.
Nepal now hosts several major US-based health analytics and AI healthcare companies that have set up long-term engineering hubs in Kathmandu. This growing cross-border engagement has elevated Nepal’s IT industry into a vital part of the national economy. It is now one of the 18 core sectors used to calculate the country’s Gross Domestic Product (GDP).
Companies such as Cedar Gate, Fusemachines, Leapfrog Technology, Deerwalk, Logpoint Nepal, Ekbana, CloudFactory, InfoDevelopers, and Rara Labs have built a strong track record over the years, consistently delivering IT services to global clients. Among the newer generation of standout firms, Leapfrog operates across multiple domains, while Fusemachines has carved a niche in artificial intelligence. Ekbana, which emerged after 2014, manages backend operations for a major Japanese e-commerce giant from its Nepal-based team. A growing share of the healthcare software powering hospitals and insurers in the United States is being developed in Nepal. From electronic medical records and billing systems to analytics and operational tools, much of the coding is outsourced to Nepali IT firms, attracted by lower costs and a steady pipeline of talent—an estimated 15,000 tech graduates enter the job market each year.
According to industry insiders, more than a dozen IT companies in Nepal now specialize in medical software, most operating as offshore subsidiaries of U.S. firms, while a handful are fully Nepali-owned vendors serving American clients directly. One such company is SecurityPal, a San Francisco-based startup founded by Pukar C. Hamal in March 2020, which is redefining how global enterprises manage security reviews. The company has developed a hybrid system that blends software, artificial intelligence, and human expertise to streamline the completion of complex security questionnaires. Positioned as a pioneer in the emerging field of Customer Assurance (CAx)™, SecurityPal operates its main command center out of Kathmandu, where much of its core work is carried out. In February 2023, SecurityPal inaugurated its Security Operations Command Center (SOCC) in Kathmandu, establishing a 24/7 hub staffed by more than 200 professionals, including security analysts, engineers, and governance, risk, and compliance (GRC) experts. In just five years, the company has secured a roster of high-profile clients across the tech industry, emerging as a behind-the-scenes force in the AI boom. SecurityPal now supports firms such as OpenAI, LangChain, and Cursor, helping them navigate the complex and time-consuming process of enterprise security reviews. Founded in April 2020, Sakchha positions itself as a global back-office hub for U.S. small and medium-sized enterprises (SMEs). The company specializes in building dedicated remote teams across finance operations, administration, IT support, quality assurance, virtual assistance, CRM, and marketing—serving clients worldwide with a strong focus on the U.S. market.
In the fiscal year 2023/24, the sector, which includes information products, broadcasting, software publishing, telecommunications and IT-related services, contributed approximately 1.94% to GDP. Its growth rate has stayed broadly aligned with overall economic performance, registering 4.19% in 2021/22, 4.15% in 2022/23 and 4.91% in 2023/24.
An Industry on the Rise
In 2022, Nepal’s total IT service exports reached $515 million—a 64.2% jump from 2021, according to the report ‘Unleashing IT: Advancing Nepal’s Digital Economy, Expanding Jobs and Exports’, published by the Institute for Integrated Development Studies (IIDS) in July 2023.
“The key findings indicate that Nepal’s IT-enabled services (ITeS) industry is valued at approximately $515 million, comprising over 106 IT services export companies, 14,728 IT freelancers in software development and technology, and 51,781 ITeS freelancers offering services via various digital platforms,” the report states. “Both IT companies and freelancers saw significant growth, with IT companies registering an 80.5% increase in service exports compared to the previous year, and freelancers achieving a 55.2% growth.”
The report further added that IT service exports accounted for 1.4% of Nepal’s GDP and 5.5% of foreign exchange reserves in 2022.
Some of the major tech companies operating in Nepal include Cedar Gate, Leapfrog Technology, Fusemachines, CloudFactory, SecurityPal, LogPoint, Amnil Technologies, QuickFox and Techkraft—each employing hundreds of tech graduates. However, much of the industry remains powered by freelancers.
Nepali firms offer a wide range of services to global clients: frontend and backend software development, UI/UX design, DevOps, and increasingly, AI-driven solutions in sectors such as health and education. Python remains one of the most in-demand skills.
“Nepal’s IT sector is heavily focused on software development, design, artificial intelligence, animation, quality assurance and data services,” says Gaurav Pandey, Founder and CEO of Ekbana Solutions Pte. Ltd and Vice President of the National Association for Software and IT Services Companies (NAS-IT). “We have developed notable expertise in healthcare data for the US, mortgage back-office support for Australia, and, more recently, AI,” he adds.
NAS-IT is a not-for-profit organization dedicated to empowering Nepal’s software and IT industry by promoting innovation, entrepreneurship and professionalism.
Nepalis are also making their mark on the global tech stage. In June, Niural—a US-based global payroll and finance operations startup co-founded by first-generation Nepali-American couple Nami Baral and Nabin Banskota—raised $31 million in a funding round.
“Today marks an exciting milestone at Niural. We’ve closed our most recent funding round, raising $31 million to further accelerate our mission of creating the first system of intelligence for the CFO suite with our pioneering AI-native platform,” the founders announced on June 25.
Dr Amrita Sharma, currently a consultant at the Asian Development Bank (ADB) and former lead researcher of the IIDS study conducted three years ago, told New Business Age that the 2023 report, based on 2022 post-COVID data, captured a moment when the industry was accelerating. “But with many companies that were previously operating informally now shifting into formal channels, it doesn’t appear that growth has slowed,” Sharma said.
The income levels in the ITC sector highlight the sector’s potential. Junior professionals earn around Rs 50,000 per month, mid-level professionals make about Rs 150,000 and senior professionals can earn up to Rs 300,000. Freelancers often earn significantly more, with some reportedly making as much as Rs 80 million annually. Even moderate freelance incomes of Rs 200,000 to Rs 250,000 per month far exceed Nepal’s minimum wage.
More IT Companies Under Tax Net
Government incentives over the past two years have helped bring more IT firms into the tax net. Over 300 IT companies are now formally registered with the Inland Revenue Department (IRD).
The country witnessed a record surge in IT company registrations in the last fiscal year, which ended on July 16. According to the Department of Industry, 185 IT firms were registered during that period—an exponential increase from previous years.
Stakeholders credit this growth to government concessions on taxes and electricity tariffs. Finance Minister Bishnu Prasad Paudel introduced incentives, including tax breaks and reduced electricity rates, for IT industries. The announcement of an ambitious “Information Technology Decade” in previous year’s budget, aimed at boosting IT exports to Rs 3,000 billion and creating 500,000 direct and one million indirect jobs over the next decade, also bolstered youth confidence in the sector.
Three years on, Dr Sharma estimates that actual IT service exports may have already reached $1.5 billion, especially if informal earnings are included. The sector currently employs more than 80,000 people directly, she added.
However, Dr Sharma and several tech entrepreneurs caution that accurately assessing the industry’s true size will be challenging. This is because many IT professionals choose to receive their earnings as remittances to avoid higher tax deductions.
“When freelancers were taxed at only 1%, many registered with the IRD,” Dr Sharma explains. “But when the rate increased to 5%, many began receiving earnings as remittances, since banks don’t deduct tax. That income is now recorded under remittances. This shift needs closer examination.” Another issue is the tax disparity between companies and freelancers. While companies pay up to 39% in taxes, freelancers doing similar work pay only 5%. Although many say this gap needs to be looked into, they were quick to add that any foreign currency earned through IT work strengthens the economy and should be encouraged.
IT Sector Outpaces Traditional Exports in Value Addition
Industry people say IT service exports now generate more value addition than some of Nepal’s top export commodities, including refined edible oils. Refined edible oil was Nepal’s leading export by value in 2024/25. Nepali refineries import crude or semi-processed edible oils from countries such as Malaysia, Indonesia and Ukraine at minimal tariffs, then process and export it to India, benefiting from zero-tariff access under South Asian Free Trade Area (SAFTA) agreement among SAARC countries.
In contrast, Nepal’s ICT sector, now seen as a rising export-oriented service industry, primarily exports computer programming and information services. ICT exports made up 3.9% of total goods and services exports in 2021/22, declining slightly to 3.56% in 2022/23 and 3.12% in 2023/24. Within service exports, the sector’s share fell from 10.63% in 2021/22 to 6.98% in 2022/23 and 5.38% in 2023/24—highlighting both growth potential and signs of leveling off.
According to a World Bank report published in March, the telecom, computer and IT services accounts for 10% of Nepal’s total service exports, or 0.3% of GDP”, placing Nepal second in South Asia for IT service exports as a percentage of GDP, behind only Pakistan. Digitally delivered service exports grew at an average annual rate of 11.6% between 2005 and 2023. By 2023, they represented more than half of Nepal’s total service exports.
Manoj Ghimire, CEO of RaraLabs, a Nepal-based product design and development firm employing around 125 people with an annual turnover of $1.5 million, says that most export revenue from IT services stays within the country. “If we’re exporting $800 million worth of IT services, nearly all of that is local value addition,” he says. “The money goes directly to employees, which has a significant impact on the economy. “But policymakers have not fully grasped this. In terms of net value addition, IT is already the number one sector.”
Gaurav Pandey, Vice President of NAS-IT, estimates the IT sector’s contribution to GDP is now around 1.8% to 1.9%. With targeted support, he believes this could rise to 5-6%. Globally, the IT sector contributes about 4% to GDP, a figure projected to rise to 15% by 2040 as digitalization accelerates.
Global Doors Open, But Implementation Lags
Recognizing the sector’s growing role in GDP, foreign exchange reserves and overall economic development, the government has begun implementing long-awaited policy reforms. While delayed, the changes have been welcomed as a signal that the state is finally taking the industry seriously.
For years, IT companies had pushed for the permission to operate abroad—especially to open foreign branch offices. However, these efforts were blocked by the outdated Act Restricting Investment Abroad, 1964, a law dating back to King Mahendra’s reign. That changed in January 2025, when the government announced a reform package through an ordinance amending more than 30 laws. The overhaul aims to remove legal barriers, streamline regulation, improve the business climate and enhance public service delivery. Among the most significant changes is the creation of a legal pathway for Nepali IT companies to invest abroad. Firms can now invest abroad, open branch offices and repatriate earnings legally.
To implement this, the Nepal Rastra Bank (NRB) amended the Foreign Investment and Foreign Loan Management Bylaw, 2021 in June. The update allows overseas investment of up to $1 million or 50% of a company’s average foreign currency earnings from IT service exports over the past three fiscal years, whichever is lower. While the reform was seen as a step forward, many entrepreneurs argue that the eligibility criteria for overseas investment are too narrow. They warn that the rules favor a small number of large firms already exporting IT services abroad. Dr Sharma, who led the IIDS study in 2022, says the three-year earnings cap should be scrapped. “From a regulatory point of view, the thinking might be: let’s see how it goes, then revise. But the sector can’t afford to wait,” she says. “The ordinance raised hopes, but does it actually enable growth?”
Santosh Koirala, President of NAS-IT, agrees with Dr Sharma. “The government is finally promoting IT. That intent is visible. But once it reaches the bureaucracy, the execution doesn’t match the promise. That is a recurring challenge in Nepal.” Still, insiders point to a positive shift in mindset among key agencies such as the Prime Minister’s Office, the e-Governance Board and the Ministry of Communication and Information Technology. “There is a real interest now. But on the ground, progress is still slow, either due to a lack of clarity or institutional inertia.”
Koirala adds that the latest amendment to NRB’s foreign investment bylaw does not reflect the spirit of the original policy. “Nepal’s IT boom really took off just three to four years ago. Most of the companies with global ambitions didn’t even exist before that,” he says. “Startups building AI tools or product platforms—those best positioned to scale globally—are being left out by the three-year revenue rule.”
According to Koirala, some of the most promising firms now have not made a dollar yet, and are still building. “The reform has failed to support the segment it was supposed to empower,” he added. “We have access to India and the US, and our new generation is capable of understanding and solving global tech challenges. That is why there is so much momentum right now; this is the right time to promote the sector.”
A tech entrepreneur told New Business Age that the foreign exchange earnings requirement for overseas investment is contradictory, unfair and indicative of outdated thinking. “We have recorded turnover worth millions of rupees inside Nepal, serving various institutions and helping retain foreign currency. Why should we be ineligible?” he questioned.
Pivot Toward Product Development
Many entrepreneurs believe Nepal must pivot from service-based outsourcing to product-based innovation. “Most successful IT companies here have grown by outsourcing—and outsourcing is just labor,” said one founder. “We need to become creators and build globally competitive products.”
Despite growing global demand for AI and automation tools, Nepal has struggled to keep pace. Tools like ChatGPT have revolutionized the industry in months, not years—underscoring the urgency of adapting quickly. “There is clearly an opportunity if you look at the data,” says tech entrepreneur Bal Krishna Joshi. “But most Nepal firms are still in services. They are here to reduce client costs, not to build the future.”
Entrepreneurs like Joshi argue that while service companies build skills, the future lies in creating products.
However, building product-based startups is difficult, with high upfront costs and failure rates. Experts stress the need to develop an ecosystem that helps deal with these risks by enabling funding, easing regulations and attracting diaspora and foreign investment.
Joshi, who co-founded thamel.com over two decades ago, says, “We need to make it easier to bring money in and take it out. These companies need full support: incentives, tax benefits and infrastructure.”
Other countries like Bhutan and those in the Gulf are moving faster. “Nepal is at a turning point,” Joshi says. “But if we move slowly, we are just creating a digital version of the garment industry—cheap labor and outsourced services, with no lasting innovation.”
Risk of Falling Behind
Without swift regulatory updates, Nepal risks being left behind—either by global competitors or the pace of AI innovation. Parag Shrestha, MD & Head of Strategy at Fusemachines–an Enterprise AI Products and Services company which is in the final stages of Nasdaq listing, says Nepal still lacks a legal framework for AI. “We have basic laws around digital transactions and cybercrime, but no dedicated Data Protection Act or AI-specific guidelines in place,” he adds. “For companies like Fusemachines, having a clear set of legal guidelines would help ensure we build AI systems that are fair, transparent and respect privacy.”
What Nepal really needs is a strong data protection law that clearly defines what personal data is, requires consent before using it, and sets up an independent authority to monitor how data is handled, entrepreneurs say. Additionally, having AI-specific guidelines based on global best practices would also help companies assess risks, reduce bias in algorithms, and be more transparent about how AI decisions are made. “These steps would not only protect users but also support companies in building trustworthy AI solutions,” Shrestha adds. Tech leaders argue that the government must move forward to create an enabling environment for private players. What the government must do, they say, is cut red tape, relax restrictions on capital inflows and outflows, foreign direct investment (FDI), and other outdated regulatory barriers. “Nepal is at risk of repeating past mistakes,” says one entrepreneur. “We were once ahead in areas like hydropower and electric vehicles—but we stalled because we didn’t act when it mattered.”
Rudra Pandey, a pioneer of Nepal’s IT sector and founder of Deerhold, Deerwalk and DWIT, says the country must deregulate the private sector and reduce taxes to encourage growth. “Nepal’s company laws are decades old and make doing business here unnecessarily difficult,” says Pandey, who is also the Co-founder of D2Hawkeye and Chairperson of Hamro Patro. “It should be easy to transfer shares, whether to institutions or individuals—at a mutually agreed price.”
He said the process of transferring shares is needlessly long and complex. “In countries like the US, share transfers don’t require government visits. You just report it in your tax filings,” he explains. “That kind of simplicity encourages investment.” Joshi believes Nepal’s edge lies in “boutique excellence”—whether in tourism, agriculture or tech. “But we’ve failed to create boutique products that truly reflect that vision,” he says.
Others point to Nepal’s youthful, affordable talent pool as a major advantage. “In product development, you need to fail fast,” says one founder. one entrepreneur noted. “And Nepal is one of the cheapest places in the world to fail fast.”
FDI Shortfall Hinders ICT Goods Production
Despite recent progress in digital services, Nepal is heavily reliant on imports of ICT-related goods and services, including internet bandwidth, computers and mobile phones. In 2023 alone, the country spent Rs 4.7 billion on internet bandwidth.
The World Bank report also notes that Nepal continues to lag in ICT goods production and exports, despite notable growth in its digital services sector. This is mainly due to low levels of foreign direct investment (FDI). “Nepal has not been able to export ICT goods due to insufficient FDI,” the report states. “Countries like China and Vietnam have significantly developed this sector through foreign investment.”
According to the World Bank’s Nepal ‘National Economic Outlook: Nepal’s Economic Growth Potential Unveiled’, the private sector invested Rs 7.1 billion in the ICT sector across 109 industries between 2017 and 2023. This investment is estimated to have created 6,746 jobs. The report highlights the diverse structure of Nepal’s ICT sector, comprising small, medium and large enterprises, defined respectively as having capital of less than Rs 150 million, between Rs 150 million and Rs 500 million and more than Rs 500 million.
Currently, Nepal imports ICT goods equivalent to 1.2% of its GDP, with mobile phones and computer equipment topping the list. To close this gap, the report recommends ramping up FDI in ICT goods production, drawing lessons from countries that have successfully leveraged foreign investment to build robust manufacturing capabilities.
Smart Support, Not Protectionism
In the budget for the current fiscal year, the government has announced plans to develop hardware and software standards to ensure uniformity in IT infrastructure across public institutions. It has also pledged to introduce provisions encouraging these institutions to prioritize domestically developed software.
Pandey of NAS-IT says the association has urged the government to prioritize Nepali IT firms for public digital projects. “Critics may object in a globalized world, but the reality is that other nations fiercely protect their digital sovereignty,” Pandey says. “In India, Aadhaar and UPI were primarily built by Indian firms like TCS and iSPIRT by using local expertise. The US government often awards contracts to domestic firms for security and economic reasons. The EU prioritizes regional providers to comply with GDPR and support local economies. Why should Nepal be the only country giving away its digital work without any reciprocity?”
He said Nepali companies, some generating tens of millions in revenue, are capable of building licensing systems, EMRs, education platforms and more. “They just need the opportunity,” he adds. Entrepreneurs say Nepali IT firms possess the technical expertise to build core digital infrastructure—from machine-readable passports and national IDs to driving licenses and beyond.
Since the budget speech talks about prioritizing software developed by domestic firms, companies are now focusing on a few key areas, says Ghimire. “First, we need to identify -specific needs. For this, we need to establish a dedicated board similar to the Nepal Tourism Board for tourism or Dairy Development Board for the dairy sector, for the IT sector,” Ghimire says. “The government should create an IT Development Board to serve as a common forum where industry players and government agencies can engage in meaningful dialogue.”
Second is building capability. “Local companies can already deliver 95% of the required work. The state should help them reach 100%,” Ghimire says. “If you award a Rs 100 contract to a foreign company, the law should mandate that Rs 30 of that work be subcontracted to a local partner. This way local firms can get involved, learn the technology, gain experience and build capacity. After two to four years, they’ll be able to bid independently on similar projects.”
Third is implementing sector-specific policies. “In fintech, we have Nepali firms operating at a world-class level,” Ghimire says. “If it is a fintech-related project, we should say: ‘You can’t import foreign solutions without special approval from Nepal Rastra Bank’. Otherwise, local providers must be used. This is how you build and grow a sector.”
Entrepreneurs also stress the importance of viewing software development as an ongoing process—not a one-time purchase. “Too often, public agencies treat software as a one-off transaction,” Pandey says. “But good systems are built iteratively. Requirements evolve, and solutions must evolve with them.”
Fixing Nepal’s Digital Public Infrastructure
Globally, organizations maintain small internal teams that gather daily requirements and collaborate with external developers through iterative stages. Nepal must adopt this approach. Every government department should aim to digitize and automate its operations within 3 to 5 years—starting with the 20% of tasks that serve 80% of users. “Build smart, then scale,” Pandey advises. However, poor Digital Public Infrastructure (DPI) remains a major obstacle to Nepal’s IT industry.
The Khanal commission’s report highlights a shortage of skilled professionals worsened by emigration, inadequate infrastructure, unreliable electricity and internet, weak cybersecurity, limited investment in innovation and outdated regulations as the main challenges.
To accelerate growth, the commission has called for an ambitious national strategy that integrates digital transformation into Nepal’s core development priorities, supported by a strong institutional framework. One of its important recommendations is a new National ICT Policy that addresses emerging technologies like AI, robotics and the Internet of Things (IoT).
Reliable electricity, especially for government data centers and digital infrastructure, is critical. The commission urges quality standards for IT infrastructure and system interoperability across government platforms to improve public service delivery. Likewise, data ownership should remain with respective government agencies and be protected by robust, risk-based security measures.
It has also suggested developing unified software platforms, for example, one serving all 753 local governments, to streamline governance and boost efficiency. Expanding internet access, reducing costs, and increasing broadband penetration in rural areas have been prioritized to bridge the digital divide.
The government has allocated Rs 740 million in the current fiscal year to develop DPI and strengthen the ICT ecosystem. Still, officials acknowledge challenges like server issues due to high user demand and limited funds and staff. “Why would someone work for the government on Rs 40,000 per month when private firms or freelancing pay two to three times more?” a senior bureaucrat asks. “Low motivation, poor recruitment, and frequent transfers have hampered IT service delivery.”
Lowering the cost of doing IT business is another urgent issue. Ghimire underscores the need for integrated, shared workspaces. “A common infrastructure with subsidized rent where everyone can operate would be ideal,” he says. “This alone could boost overall system efficiency by 20%.”
While Nepal’s National ID system is in place, full integration and interoperability across public services remain lacking. “The government should focus on building digital infrastructure first. Localized solutions can follow,” Ghimire argues. “But that mindset is missing. Instead, every agency wants its own mobile app. The government’s job is to build roads—not buses or taxis. Once roads exist, private players will provide the vehicles.”
AI is set to disrupt many jobs. Simple website building and data entry may disappear. But it will also create new opportunities. “Think of hospitals,” says Gaurav Pandey. “Today, we may have only digital registration. In 10 years, we will see AI-powered electronic medical records, lab reports and X-ray diagnostics. In logistics, automation will be standard. In agriculture, drones and AI-powered robots are already used in countries like China. We must adopt, adapt and innovate to stay relevant.”
Education Reform Critical
Providing quality education is the next major challenge, say stakeholders, who stress the need for reforms—from school to PhD level—that emphasize critical thinking, STEM education and practical skills. “All of this depends on fixing our education system,” says Pandey. “Despite a large education budget, the quality of our education remains inconsistent.” Concerns have been raised about the quality of IT education offered by many foreign-affiliated institutions in Nepal. Rudra Pandey, a vocal critic of such institutions, said in a TikTok video that most foreign-affiliated colleges are “one of Nepal’s biggest problems”.
“They obtain affiliation from universities abroad that, after failing to attract enough students domestically, are willing to sell certificates for as little as $200 per foreign student per year,” he said. “All the money ends up in the pockets of local brokers.”
Dr Sharma agrees with Pandey. “Some of these institutions operate with questionable quality. They attract students with marketing claims like ‘no exams.’ If a university cannot provide global certification or employable skills, it ultimately does more harm than good,” she says. “We should welcome genuinely high-quality institutions with global affiliations—just as India has attracted campuses from top universities like MIT. The key is ensuring quality, transparency and real value for students.”
She is for rethinking the entire education system. “The ‘Bachelor’s-Master’s’ mindset is fading. Gen Z and Gen Alpha prefer micro-credentials and skill-based learning. Education must evolve to accommodate this shift, offering flexibility and permeability between vocational, formal, and global pathways,” Dr Sharma says. Shrestha of Fusemacines says we need to bridge the urban-rural divide by ensuring basics like internet access and electronic devices if we are to scale up human AI capital. “We also need updated AI and tech-focused curriculums for students in both schooling and university levels to churn our talent,” he adds.
Automation Threats and Crypto Opportunities
Most work coming to Nepal is peripheral rather than core IT tasks. As a result, pay remains low and team sizes are small. “With the rapid development of AI, many tasks we used to do can now be done by AI without human involvement. So, the risk from AI is much greater than from policy changes like Trump’s tariffs,” says Ghimire. “Peripheral work is heading toward automation, and there’s little money in that now. That’s the real risk we’re facing.”
During the COVID-19 pandemic, demand surged as foreign companies struggled to hire locally and turned to Nepal. But that demand has since declined. Additionally, nearly all work Nepali IT firms receive from abroad, especially from the US, comes from startups and SMEs. The sector has yet to break into major corporations because most companies aren’t positioned to compete at that level. Dr Sharma adds that stronger branding, improved sales pipelines and global certifications are essential for Nepali firms to penetrate the global corporate client base.
Entrepreneurs also see promise in crypto mining
“Even though I am not pro-crypto, why not explore crypto mining?” asks Joshi, who is also a founder of Xuno—a cross-border banking platform for the borderless economy. “But, if I provide you with a server and you pay me in dollars, why should we stop?” These are not small ventures worth a few million dollars. Serious AI infrastructure and data centers require investments of half a billion dollars per facility.
“Big companies want to come here. Microsoft, for example, has a $10 billion carbon offset requirement. Smaller companies keep quiet, but large corporations remain focused on carbon. We can help them meet those goals—so why not?” he questions.
The Clock Is Ticking
Nepal has the ingredients: talent, ambition and global connectivity. What it lacks is structure, scale and bold leadership. Entrepreneurs, researchers and industry veterans agree that the moment to act is now. Smart policy, streamlined regulation and decisive implementation are critical not just to keep pace, but to lead.
As Dr Sharma puts it, “The transition in the global workforce is already underway. Nepal must act—not just to catch up, but to claim its place in the digital future.”
(This is the cover story of the August 2025 issue of New Business Age Magazine.)
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