Nepal UK
Nepal's software and AI services exports are estimated to have crossed $1 billion, and Kathmandu-founded Fusemachines has become the country's first company listed on Nasdaq — but industry leaders warn that policy instability, thin foreign investment and a shortage of digitally skilled graduates could cap how far the boom can run.
Nepal's information technology industry reached what the Nepal Association for Software and IT Services (NAS-IT) calls a "symbolic" milestone in 2025: an estimated $1 billion in service exports, more than double the roughly $515 million recorded in a 2022 study by the Institute for Integrated Development Studies (IIDS). The estimate, based on industry growth patterns rather than official central bank data, comes as Fusemachines — an artificial intelligence company founded by Nepali-American entrepreneur Sameer Maskey — became the first company of Nepali origin to list on the Nasdaq stock exchange, beginning trading under the ticker FUSE on 23 October 2025. For Nepal's diaspora, and for the roughly 100,000 people now employed in the country's IT sector, the twin developments mark a sector attempting to move from low-cost outsourcing toward higher-value, globally competitive technology work.
The Billion-Dollar Estimate
NAS-IT president Gaurav Pandey told the Kathmandu Post that a formal survey confirming the $1 billion figure would not be available until later in 2026, but said industry-wide growth of roughly 20 percent annually over three years made the milestone credible. Nepal's export mix now spans software development and outsourcing, AI services, US healthcare data analytics, and home-loan document processing for more than a dozen Australian firms. Complicating official measurement, Pandey said, is that international clients frequently label payments to Nepali IT firms simply as "remittance" when transferring funds, making it difficult for Nepal Rastra Bank to separately track export earnings through the banking system.
Fusemachines and the Diaspora Effect
Industry figures and researchers point to returning members of the Nepali diaspora as a central driver of the sector's expansion. Shreesh Tripathi of IIDS cited firms such as SumX and K&A Engineering, founded or led by returnees now employing dozens to hundreds of staff serving foreign clients. Fusemachines, headquartered partly in Kathmandu, exemplifies the trend at a larger scale: its Nasdaq listing gives it access to public capital markets, and the company has opened its 2026 AI Fellowship programme — a Nepal-based training scheme built with US university faculty — to expand the country's AI talent pipeline.
Employment Growth, and Its Limits
Employment in Nepali IT has grown from an estimated 70,000 workers in 2022 to around 100,000 today; Pandey projects the sector could employ 500,000 people within a decade if 18 percent annual growth continues, though he acknowledges this rests on assumptions rather than confirmed data. Around 90 percent of IT jobs remain concentrated in Kathmandu Valley, reflecting the clustering of colleges and firms there — a geographic imbalance industry figures say limits the sector's reach into the rest of the country.
Policy Uncertainty Remains the Biggest Risk
Pandey and Tripathi both identified policy unpredictability, rather than global competition, as the sector's chief vulnerability. "Tax rates change every year," Pandey said. "We need stability for at least 10 to 15 years." Foreign direct investment in Nepali tech remains limited, and industry leaders argue the government's Digital Nepal Framework and National AI Policy 2025 — which established a National AI Centre, an AI Regulation Council and regulatory sandboxes when endorsed in August 2025 — need to be matched by curriculum reform to prepare graduates for an AI-driven labour market. A UNDP report on global digital divergence, cited by Nepali commentators, warns that countries failing to pair digital growth with education reform risk falling further behind rather than catching up.
What It Means for Nepalese Readers
For the diaspora, the sector's growth signals expanding remote and hybrid employment opportunities with Nepal-based firms serving international clients, and a rare Nepali success story on a major global stock exchange. Whether that translates into broadly shared prosperity, rather than a narrow, Kathmandu-centred boom, remains contested among the economists and industry leaders tracking it.
