Nepal targets global IT hub status amid government software initiative

The government of Nepal is positioning the information technology (IT) sector as a primary driver of economic growth, aiming to transform the nation into a global IT and artificial intelligence (AI) hub. Finance Minister Dr. Swarnim Wagle has encouraged tech entrepreneurs to expand their ventures, promising state support and a 50 percent tax exemption on income earned from exporting IT services.

Despite these incentives and the rapid growth of the private sector—which employs over 100,000 workers and generates significant export and domestic revenue—the government has moved to establish its own software development entity. The Cabinet recently approved the formation of the Software Development and Operations Centre, a government office tasked with developing and maintaining software for public agencies.

This decision has sparked debate among industry stakeholders, who suggest a contradiction between the government’s policy of promoting private digital exports and its decision to develop software internally rather than utilizing the existing private technology industry.