Tech leaders urge govt to set PPP rules, support Nepal’s Sovereign AI

KATHMANDU: Tech leaders on Wednesday urged the government to set clear public-private partnership (PPP) rules and provide infrastructure support for Nepal’s first 'Sovereign AI' initiative.

The appeal followed the federal government’s unveiling of Rs 2,124.34 billion budget for the upcoming fiscal year. The Federation of Computer Association Nepal (CAN Federation) organised a “Multi-Stakeholder Dialogue on Post Budget 2083/84” at its Secretariat in Khusibu to review measures for IT export incentives, startup support and digital infrastructure.

The meeting brought together tech entrepreneurs, policy advocates, industry associations and academic experts. Participants welcomed the government’s emphasis on information and communication technology and artificial intelligence (AI) and praised plans to build a 'Sovereign AI Compute Centre' in Syuchatar, Kathmandu, equipped with thousands of advanced processing units.

Speakers warned, however, that policy intent alone would not be enough without clear implementation guidelines and institutional collaboration between the state and private sector. Shailendra Raj Giri, president of AI Association Nepal and founder of MeroJob, said execution across AI, data centres and software management would be difficult without structural integration with the industry.

“The government clearly understands the structural importance of AI, but partnership with the private sector needs to be deeply institutionalised,” he said, urging the adoption of a formal PPP model to bring industry into the implementation process.

Delegates identified three immediate bottlenecks. First, they said the new 5% VAT on electricity will raise operating costs for energy-intensive AI processing and data centres, undermining competitiveness for firms that require large compute capacity.

Second, they criticised the budget’s pledge of subsidised compute capacity for startups as vague on customs exemptions and direct subsidies for graphics processing units, which industry experts say are essential for running local AI models.

Third, participants said the budget’s approach to skills development was limited. While it mentions 'AI literacy', industry representatives called for aggressive re-skilling and up-skilling programmes and for funding to support domestic researchers, software engineers and training institutions to build a workforce capable of developing local AI tools.

Chiranjibi Adhikari, acting president of CAN Federation and a cybersecurity expert, said the state should act as an anchor customer rather than build software in-house. “The government is a consumer of the private sector, and it must trust us,” he said, adding that policymakers should prioritise financial management, investment facilitation for IT services and measures to ease international payment bottlenecks.

The dialogue concluded with a pledge to continue collective advocacy for a resilient and secure digital ecosystem. 

Attendees included representatives from  Nepal Chamber of Commerce (NCC) IT Committee, FinTech Alliance Nepal, Nepal Mobile Distributors Association, the Centre for Cybersecurity Research and Innovation, npCERT, the Internet Service Providers’ Association of Nepal, data centre and cloud service providers, Nepal Research Education Network, CSIT Association of Nepal, and academic and student groups.

Looking ahead to the new fiscal year, the tech sector’s message was clear: the budget provides a policy foundation, but clear implementation rules, targeted financial concessions, and genuine private sector collaboration will determine whether Nepal can transition to an AI-driven economy.