IT firms make up two-thirds of new foreign investment pledges in Nepal

What happened

The Department of Industry recorded 1,116 projects with foreign investment commitments in fiscal year 2025/26, which is 2082/83 in the Nepali calendar. Of these, 727 were in information technology. Tourism came next with 227 projects, followed by services with 71 and manufacturing with 63. Agriculture had 18 projects, energy four and infrastructure two. Ratopati, citing the same department, reported that IT made up about 65 percent of all projects.

The money tells a different story. In July 2026, Ratopati reported that total commitments for the year were about Rs 58.1 billion across all sectors. Of this, IT projects accounted for about Rs 2.83 billion. Agriculture and forest products drew the most money, about Rs 23.18 billion from only 18 projects. Tourism drew about Rs 13.99 billion and energy about Rs 7.16 billion from four projects. Dividing the IT total by 727 gives an average of roughly Rs 3.9 million per IT project.

Suresh Dahal, information officer at the Department of Industry, told OnlineKhabar that investors choose the sectors they are interested in. He said totals differ between sectors because some projects need much more capital than others. A year earlier, in fiscal year 2024/25, 842 projects received commitments. Ratopati put that year's total at about Rs 64.96 billion, so the number of projects rose while the total amount fell.

Ratopati also reported that the year's projects are expected to create jobs for 28,423 people across all sectors. Most projects were small: it counted 1,090 small industries, 12 medium and 12 large. It said 897 projects came through the automatic route, an online approval process, and 219 through the regular approval route.

The engineering behind it

One reason IT projects are so numerous is the rules. According to a March 2026 summary by the law firm Niti Partners, published on Mondaq, a February 2026 government notice widened Nepal's automatic route for foreign investment to 102 industry areas. For listed IT and digital businesses, the minimum investment amount does not apply. Other sectors remain subject to general minimums, which an earlier 2022 notice set at Rs 20 million.

The list of exempt IT businesses is broad. Niti Partners lists technology parks and IT parks, software development, data processing, digital mapping, business process outsourcing and knowledge process outsourcing, data centres, data mining, cloud computing, web portals, web design and web hosting. Because there is no minimum, a foreign investor can set up a small software or outsourcing company with little capital, which helps explain the small average size.

The work these firms do has a common shape. As general knowledge, a software services company takes requirements from a client, often in another time zone, then designs, builds, tests and maintains software. The skills that matter most are writing clean code, using version control so a team can work on the same code safely, testing, and communicating clearly in writing. Data processing and outsourcing firms also need people who can handle data accurately and securely.

What it means in Nepal

The figures show many small, foreign-backed IT companies being registered, not a few large ones. A commitment is also not the same as money arriving. A pledge is a promise recorded at registration, and the amount actually invested can be lower or come later. So the 727 figure measures interest in setting up IT businesses in Nepal, not the size of the industry.

The comparison with other sectors is useful. Former Nepal Rastra Bank governor Chiranjibi Nepal told Ratopati that Nepal must offer better facilities than India and China if it wants more foreign investment. Large sectors such as energy and agriculture drew most of the money from very few projects. IT drew many projects with small sums. Both patterns matter for the economy, in different ways.

Tax rules also favour IT exports. According to a summary of the 2025/26 federal budget by the Institute of Chartered Accountants of Nepal (ICAN), 75 percent of the tax on income from exporting IT services is exempted. The same budget offered startups with annual transactions up to Rs 10 crore a full tax exemption for up to five years. It also extended to the IT industry the income tax and electricity charge exemptions given to special industries. Rules like these make it cheaper to serve foreign clients from Nepal.

For students, the useful point is about skills rather than any one employer. Small software and outsourcing firms usually need people who can work in a team, follow a client's process, and deliver tested code on time. Those habits can be built during a degree through projects, coursework and careful practice with tools such as version control.