Nepal stands at an important crossroad where Artificial Intelligence (AI) has the potential to reshape the country’s technological narrative. AI might just prove to be the catalyst that can help narrow Nepal’s long-standing developmental gaps. With a rapidly growing talent base, we’re now in a favorable position to lead our own technological leap. However, for all of that to happen, a lot of foundational work needs to be done.
According to the World Economic Forum, “Ambition in AI needs to be supported by the right infrastructures or it will just remain a goal without real tangible results. Rules and regulations for AI must evolve together with the innovations they aim to guide.” This article focuses on two main areas. First, it examines how Artificial Intelligence can accelerate public service delivery in Nepal, assessing the country’s current policies and readiness for AI. Second, it highlights the steps that are required to make sure that AI is adopted transparently, accountably, and sustainably across all sectors. It’s now time for Nepal to establish the right infrastructure and frameworks to turn AI from aspiration into impactful action.
AI for Public Service Delivery and Governance Transformation
Nepal is still at the nascent stage when it comes to rules and regulations related to data and AI. Although there are few basic laws around digital transactions and cybercrime, we still don’t have dedicated AI-specific guidelines in place. If we have a clear set of legal guidelines, it would help ensure that the tech companies will build AI systems that are fair, transparent, and also respect user privacy.
What Nepal truly needs now is a strong Data Protection law. This law should clearly define what personal data is, set rules for taking consent before using it, and guide setting up an independent authority to monitor how data is handled. Additionally, having AI-specific guidelines based on global best practices would also help companies assess risks, reduce bias in algorithms, and be more transparent about how AI decisions are made. These steps would not only protect users but also support companies in building trustworthy AI solutions.
As all of us are aware and have experienced in some capacity, the slow service delivery time and bureaucratic inefficiencies are two main factors that are dragging Nepal behind when it comes to governance. Enter AI, these long-standing challenges can be solved effectively by automating repetitive tasks such as content extraction, identification, forecasting, fraud detection, flexible deployment, and scalability. AI algorithms and machine learning models will help the government optimize task performance and can be tailored to the specific needs of various government bodies.
However, we still have a long way to go. According to Oxford Insights’ Government’s AI Readiness Index 2024, Nepal ranks 150th on AI readiness. This highlights the urgent need for the government to come up with policies and a regulatory framework, capacity building, digital infrastructure, and strategic adoptions of AI across sectors.
Policy and Regulatory Frameworks for AI in Nepal
Nepal’s low AI readiness ranking already highlights the fact that institutional and policy support are just as important to foster innovation and prosperity in the country. Recognizing this, Nepal has recently taken proactive steps to assist domestic businesses in expanding internationally. The Foreign Investment and Technology Transfer Act has recently been amended to allow IT companies to open branches abroad and return profits through official banking channels. Additionally, Nepal Rastra Bank has also streamlined approvals, so businesses can move quickly on international opportunities.
In August 2025, the Government of Nepal officially approved the National AI Policy 2082, marking a major milestone in the country’s digital transformation journey. The policy is designed to guide the ethical, transparent, and inclusive development and deployment of artificial intelligence (AI) across various sectors of society. The policy does lay the foundation for a future where AI can be leveraged properly in Nepal to enhance the public services, support innovation, and strengthen Nepal’s digital economy. The government is making efforts, but it is also true that there is still a long way ahead for us to reach the mark where innovation meets proper governance and regulations.
The approval of the policy is only the first step. Only policy alone cannot guarantee progress. For meaningful change, implementation of the policy as well as strengthening of the systems and capacities to support the AI development are equally important.
AI Readiness Infrastructure
Although the Nepali government ranks 150th on AI readiness, it doesn’t mean that there is a lack of professional and individual talent within the country. Skilled AI professionals are highly valued in the global market. Tech companies have always been working to ensure that talent from frontier markets like Nepal is part of the demanded AI talent pool and is upskilled to compete on a global scale.
For example, in 2017, Fusemachines launched an AI Fellowship Program and has already trained over 1000 people. Building on our efforts, we gave continuation to democratizing AI education by launching our AI Shikshya for Nepal initiative, which offered both introductory and advanced level courses in AI, ensuring students have the proper access to the skills and knowledge that are constantly in demand.
But this alone is not enough to sustain the need for more talented professionals. As mentioned earlier, policies, infrastructures, strategic collaboration opportunities and partnerships between government, industries, and academia are equally important for Nepal to thrive in this AI revolution. This will actually help Nepal leapfrog into a new era and create a sustainable ecosystem that supports and accelerates Nepal’s overall development.
Parag Shrestha currently serves as the Managing Director - South Asia & Head of Strategy for Fusemachines. In his role, he remains committed to helping enterprises unleash their full potential through AI. He is responsible for overseeing the delivery of AI Strategies, Solutions, Research and Products and expanding Fusemachines’ growing footprint in South Asian countries.
