Nepal’s IT Boom: Rs 6.69 Billion Earned in Four Months, Can We Earn USD 1 Billion?

In the first four months of the current fiscal year, Nepal’s income from IT service exports surged by an impressive 20.28%, raking in Rs 6.69 billion. That’s Rs 1.13 billion more than the same period last year—a leap that underscores the digital transformation quietly taking shape in a country better known for its mountains than its monitors.

Yet, beneath this success lies an untapped potential. Lost earnings, middlemen pocketing hefty shares, and restrictive policies are keeping Nepal from fully capitalizing on its IT boom. It’s a story of immense promise intertwined with pressing challenges, and one that deserves our attention.

Breaking Down the Billions

Here’s how the Rs 6.69 billion pie is sliced:

• Telecommunication Services: Rs 1.72 billion
• Computer Services: Rs 4.96 billion
• Information Services: Rs 9.3 million

While these numbers are impressive, Nepal also imported IT services worth Rs 1.19 billion during this period. Even after accounting for imports, Nepal’s IT sector boasts a surplus of Rs 5.50 billion. In a country where trade deficits often dominate headlines, this surplus feels like a refreshing change.

Why Should You Care?

This growth in IT exports isn’t just a win for the government to celebrate; it has implications for all of us:

Jobs

According to a study by the Institute for Integrated Development Studies (IIDS), the IT sector employs around?66,500 professionals in Nepal. From software developers to app designers, these individuals are putting Nepal on the global digital map.

Dollar Inflows

More exports mean more dollars flowing into Nepal, stabilizing the Nepali Rupee and boosting the economy. But here’s the catch—a significant chunk of IT earnings isn’t making it to official records. Informal channels like?hundi are often used to bring money into the country, bypassing taxes and regulations. Imagine the potential if all earnings were formalized!

Is Gagan Thapa’s Dream Turning into Reality?

Remember when Gagan Thapa’s claim about earning Rs 3-4 lakh a month from the hills of Kirtipur sparked a wave of memes? It turns out he wasn’t exaggerating. An ongoing salary survey we’re working on has revealed that many Nepalis are already living this dream, working remote IT jobs, earning in dollars, and making that “hilltop hustle” a reality.

This flips the narrative. It’s not that Gagan Thapa was dreaming too big; it’s that we weren’t paying attention to what’s already happening. The IT sector in Nepal is buzzing, quietly shaping careers in ways most of us haven’t imagined.

What’s Holding Us Back?

For all its promise, Nepal’s IT sector faces significant challenges:

1. Dependency on Middlemen: Nepali IT companies often sell through agents in the US and Australia, who take a 40-60% cut. This dependency reduces profits for local companies. A direct sales channel for software exports could immediately boost revenues by 30-35%.
2. Restrictive Policies: Nepal’s laws prevent local companies from directly opening branches abroad, forcing them to set up costly subsidiaries instead.
3. Informal Earnings: Studies suggest Nepal’s actual IT export income might be double what’s reported. But informal channels mean lost taxes and reduced economic impact.

What’s Next? Actionable Solutions

To truly capitalize on this digital momentum, Nepal needs to address these roadblocks and unlock its full potential. Here’s how:

1. Simplify Tax and Bureaucracy

Streamline the tax system to encourage formal operations. For instance, introducing?tax incentives for IT companies that bring in foreign revenue could be a game-changer.

2. Go Direct

Enable Nepali companies to sell software and services directly overseas, cutting out costly middlemen.

Take examples of companies like?CloudFactory that have already shown that Nepali talent can deliver global-quality services without intermediaries.

3. Educate and Upskill

Partner with global platforms like?Coursera and?Udemy to provide affordable training opportunities for Nepal’s youth. A skilled workforce can bridge the gap between Nepal’s potential and global IT demands.

4. Promote Transparency

Create incentives for formalizing earnings. For example, offering?tax rebates for companies that bring their earnings through official banking channels could significantly reduce informal transfers.

A Digital Dawn for Nepal?

Nepal’s IT sector is proving that it can do more than keep up—it’s starting to set the pace. With Rs 6.69 billion in export revenue in just four months, the numbers are more than impressive; they’re a loud signal that Nepal’s digital ambitions are no longer just dreams.

But let’s not get ahead of ourselves. Beneath the success are stubborn hurdles: middlemen pocketing hefty shares, policies that clip the wings of local companies, and informal earnings that keep billions off the books. These are the roadblocks that need clearing if Nepal wants to truly shine on the global IT stage.

So,?what’s your take on Nepal’s IT boom? How can we collaborate to unlock Nepal’s IT potential and ensure these billions truly transform our economy? Share your thoughts and let’s keep the conversation going!