Experts optimistic about Nepal’s 3 trillion rupees IT export goal

KATHMANDU: Stakeholders are optimistic that Nepal can achieve its ambitious goal of exporting IT services worth 3 trillion rupees and creating 1.5 million jobs in the next decade. This optimism persists despite the challenges, as outlined in the budget, which declares the upcoming fiscal year as Nepal’s decade of information technology (IT).

Experts at a program organized by the Society of Economic Journalists-Nepal (SEJON) in the capital on Tuesday emphasized that with policy reforms and the removal of legal hurdles, achieving the export target would be more feasible. They highlighted the need for a stable policy environment.

Finance Minister Barshaman Pun stated that through the budget for fiscal year 2024-25, the government aims to export IT-related services worth 3 trillion rupees and create 500,000 direct and 1 million indirect jobs over ten years. He noted that the government is making policy decisions to protect and promote the industry, encouraging the private sector’s involvement.

Minister Pun mentioned that a high-level commission would be formed to ensure policy stability in the IT sector, and legal frameworks would be established with IT as a priority. He also highlighted plans to modify and implement the “Digital Nepal Framework” with institutional arrangements to oversee its implementation. The government plans to operate IT parks in Kathmandu Valley and Butwal with high-speed internet, electricity, security, and other infrastructure. Additionally, ten IT parks will be established, one in each province.

Pun emphasized that the private sector will drive the IT industry, similar to agriculture, tourism, and energy sectors. He clarified that the government does not intend to engage in trade but will discuss and improve tax policies. He stressed that intellectual labor can be utilized domestically, reducing the need for physical labor abroad.

Minister Pun reiterated the necessity of making IT policies stable and timely, aligning with the digital generation. He noted that the IT sector can provide an environment for the youth to remain in Nepal and that the government aims to make this sector competitive.

He mentioned that while other goods and services exports have barely reached 150 billion rupees, with slight facilitation, IT exports could generate 300 billion rupees annually. This view is supported by experts in the sector.

Communications and Information Technology Minister Rekha Sharma announced the formation of a task force to achieve the IT decade’s goals. She stated that a clear outline of annual activities would be drafted. Nepal Telecom and the Nepal Telecommunications Authority are aligning their budgets accordingly to implement policies in the IT sector. The government is committed to promoting domestically developed software.

Minister Sharma explained that free space would be provided in IT parks in Kathmandu and Butwal, and various programs would be conducted in public-private partnerships. The government is determined to amend necessary policies and laws to promote the digital economy, startups, innovation, job creation, and improve digital governance.

Sharma expressed the government’s plan to launch the upcoming fiscal year as the starting year of the IT decade, establishing IT as a pillar of the economy. She emphasized that IT can drive economic development and social transformation, making programs initiated by the government effective.

Minister Sharma pointed out the ineffective implementation of the Digital Nepal Framework since its inception in 2076BS. She acknowledged the challenge due to the lack of clear statistics, with around 100,000 IT professionals currently working in the sector.

Sharma mentioned that outdated laws are problematic, and the government is working to amend them to meet current needs. The IT decade includes programs such as establishing knowledge parks in public-private partnerships, providing internships to graduates, creating an entrepreneurial environment, and forming an innovation commission.

She highlighted the need for collective efforts and suggestions to draft new cyber security policies and emphasized the necessity of public awareness at the grassroots level and encouraging IT education in schools. Minister Sharma also noted the geopolitical appeal of Nepal, with IT enabling daughters to become experts and work globally while staying in Nepal.

Joint Secretary of the Ministry of Finance, Dhaniram Sharma, stated that the declaration of the IT decade is not an ambitious target but a plan driven by the ongoing progress in the IT sector. He clarified that the goal is achievable since the plan was developed after discussions with IT experts and entrepreneurs.

Presenting a paper at the event, Dr. Amrita Sharma, a consultant at IIDS, stated that digitalization is not a magic solution and requires political commitment and stability. She mentioned that the government has made certain policy preparations, but the main concern is how these policies will be implemented.

Ajit Bikram Shah, CEO of Lotus Holdings, expressed his view that achieving this goal wouldn’t take even ten years. He emphasized that the private sector is ready to invest in this area if facilitated properly.

Manoj Poudel, Chair of the Investment and International Forum at the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), noted that the IT sector is currently growing at a rate of 16.89 percent annually. He mentioned that to achieve the target, the growth rate would need to be sustained at 36 percent.

Karvika Thapa, CEO of Kimbu Tech, highlighted the need to raise awareness in villages to make the IT decade successful. She stressed the importance of not only installing computers in every school but also encouraging their use. Thapa expressed confidence that the IT decade would make Nepal a center of attraction for foreign entities due to its geopolitical position and would create an environment where daughters could become IT experts and work on foreign projects while staying in Nepal.