A Window That Will Not Stay Open
Every major technology wave creates a brief window in which emerging economies can establish competitive positions that persist for decades. Countries that built software outsourcing industries in the 1990s — India, the Philippines, Eastern Europe — still benefit from those positioning choices today. Countries that acted late found themselves perpetually downstream of those decisions.
Artificial intelligence is that kind of wave. And Nepal has, right now, a genuine opportunity to position itself as South Asia's AI-forward economy — if it acts with urgency.
The Case for Nepal as an AI Leader
This claim might seem counterintuitive. Nepal is a small, landlocked economy with limited R&D investment, no major technology corporations, and infrastructure challenges that larger neighbours have long since resolved. So why Nepal?
Because small can be agile. India's AI ecosystem is vast, but so is its bureaucratic complexity. Bangladesh has scale but is still building foundational digital infrastructure. Nepal, precisely because it is small, can make policy decisions and implement them with a speed that larger systems cannot match. Singapore demonstrated this dynamic vividly — a small economy with smart policy choices built an outsized position in global finance and technology.
Because skills can be developed and connected. Nepal should assess its AI and software talent base using current education and labour data, then address gaps through curricula, professional learning, research, and links with Nepali professionals abroad.
Because regional context matters. Nepal's position between large technology markets makes regional standards, data governance, trade rules, and cross-border collaboration relevant policy considerations. Geography alone does not establish a commercial advantage.
What Needs to Happen
First: Declare AI a national priority — and mean it. Strategic priorities only matter when they are backed by budget, accountability, and leadership attention. Nepal needs a dedicated AI national strategy, not as a document that sits on a shelf, but as a living programme with named responsible officials, public milestones, and annual reporting.
Second: Evaluate AI-specific investment support. Policymakers could assess time-limited, transparent support for qualifying ventures and early-stage finance, subject to fiscal analysis, safeguards, and applicable law.
Third: Build regulatory clarity, not regulatory burden. AI companies are deterred less by reasonable regulation than by regulatory uncertainty. A clear, proportionate framework — such as the one outlined in my earlier paper on AI governance — signals seriousness and competence to international investors, while protecting citizens from the genuine risks that AI can pose.
Fourth: Invest in AI education at every level. From secondary school computational thinking to university AI specialisations to professional upskilling programmes for mid-career workers. The talent pipeline is the long game, and it needs to start now.
The Cost of Waiting
If Nepal does not act in this window, the outcome is not that nothing happens. The outcome is that AI arrives on terms entirely set by others — foreign platforms, foreign algorithms, and foreign companies extracting value from Nepal's market without contributing to its economy or respecting its values.
We already see this dynamic in social media: global platforms optimised for engagement metrics that do not serve Nepali users well, carrying content moderation decisions made in California with little regard for Nepali context.
The same pattern will play out with AI in healthcare, education, financial services, and government — unless Nepal builds its own capacity to shape how these systems work.
The window is open. It will not stay that way indefinitely. The choice of what to build in this moment will echo for a generation.
About the author: Laxman Kafle is CEO and Founder of EveMoo Tech Pvt. Ltd. This article expresses the author's analysis and recommendations.