The Algorithmic Age:

Navigating the Future of Work in India &

Nepal
with Artificial Intelligence
Understanding Impacts, Embracing Opportunities, and
Charting a Path Forward
Part 1: The AI Revolution and the Evolving Landscape of
Work
Introduction: The AI Tsunami
The AI Revolution: Reshaping Our World
Artificial Intelligence (AI) is rapidly transcending its status as a
mere technological advancement to become a profound
transformative force, fundamentally redefining the nature of
work, employment structures, and broad economic activity.
The scale of its potential impact is often compared to historical
game-changers like the steam engine or the internet.
In Nepal, while the adoption of AI is still in its nascent stages,
the technology presents a significant opportunity to leapfrog
traditional developmental challenges. This is particularly
pertinent for key sectors such as agriculture, healthcare,
education, and tourism. The Nepalese government has
formally recognized AI as a vital element for national
advancement. A cornerstone of this recognition is Nepal's
National AI Policy 2081 (also referred to as National AI Policy
2025), which is positioned to guide AI-driven national growth.
High-level governmental support for AI has been evident. For
instance, in October 2024, then Prime Minister K.P. Sharma Oli
underscored the necessity of making positive use of AI, stating
that the government was focusing on the field to establish
Nepal as a hub for AI education, with corresponding policies
and plans under development. More recently, the Minister of
Communication and Information Technology, Prithvi Subba
Gurung, affirmed the government's commitment to approving
and implementing the National AI Policy transparently and
expeditiously, following the submission of a concept paper for
the policy.
The framing of AI as a "leapfrogging" technology for Nepal
suggests an underlying optimism that it can serve as an
accelerator for national development. Given that Nepal is a
developing nation facing recognized developmental hurdles,
AI's transformative potential in critical sectors offers a
pathway to potentially bypass slower, traditional stages of
progress. This strategic consideration is crucial for
policymakers aiming to harness AI for accelerated national
improvement.
However, the juxtaposition of "nascent adoption" with
"significant potential" and strong governmental commitment
points towards a critical implementation gap. AI adoption is
acknowledged to be in its early phases, yet the government
has articulated ambitious goals through mechanisms like the
National AI Policy 2081. Concurrently, the nation grapples
with substantial challenges related to infrastructure, skilled
human capital, and general AI awareness. This disparity
between policy aspirations and current capabilities indicates
that the success of AI in Nepal will heavily depend on
translating vision into practice. The practical aspects of AI
adoption—encompassing effective implementation strategies,
adequate resource allocation, and robust capacity-building
initiatives—will likely prove more decisive than the policy
pronouncements themselves. This underscores the concerns
raised in analyses of the AI policy regarding the need for a
more defined implementation roadmap.
The Unprecedented Pace of AI Adoption
Title: Lightning Speed: AI's Global Integration &
Regional Implications
The global integration of AI is occurring at an unprecedented
pace. For instance, ChatGPT amassed 300 million weekly users
in a remarkably short period, and it is estimated that 90% of
Fortune 500 companies utilize its underlying technology.
Nepal's digital landscape, while evolving, presents a unique
context for AI integration. As of early 2025, data indicated
16.5 million internet users in Nepal, translating to an internet
penetration rate of 55.8% of the total population. Mobile
connections were reported at 39.0 million, equivalent to 132%
of the total population (often reflecting multiple SIM
ownership), with 80.5% of these connections classified as
broadband (3G, 4G, or 5G). There are some variations in
reported statistics; for example, a Nepal Telecommunications
Authority (NTA) Telecommunication Indicator Report,
referenced in January 2025, cited a 99.38% internet
penetration figure. However, the Nepal Living Standard
Survey (NLSS) 2022/23, published in 2024, indicated an
overall internet penetration of 39.7%. This discrepancy likely
reflects different measurement methodologies, such as
network availability versus active individual users. These
figures suggest that while global AI adoption is rapid, Nepal's
digital readiness, though improving, faces challenges related
to consistent and widespread internet access, particularly
highlighted by urban-rural disparities.
Regarding AI tool usage and awareness, a pre-print study from
March 2025 suggested a pattern of widespread implicit AI
adoption in Nepal, where many individuals use AI-enabled
products without explicit awareness of the underlying
technology. While frequent users of AI-powered services
tended to recognize their reliance on AI, a significant portion
of users remained unaware. The study also noted a gender
disparity in AI awareness, with males demonstrating higher
recognition of AI applications. This indicates that while
conscious adoption of specific AI tools like ChatGPT might be
lower than global averages, AI technologies are already
embedded in the digital experiences of many Nepalis. The
awareness gap, however, remains a critical area for digital
literacy initiatives.
The current AI revolution is characterized by the automation of
cognitive functions, moving beyond merely repetitive tasks.
This accelerated adoption, when compared to the internet
which took over a decade to achieve similar global reach,
allows significantly less time for societal adaptation.
Consequently, there is an urgent global need—and specifically
for nations like India and Nepal—for proactive policies, agile
governance frameworks, and rapid reskilling initiatives.
The conflicting internet penetration figures for Nepal highlight
a foundational issue: the establishment of reliable baseline
data for digital readiness. Effective AI policy and strategy
formulation depend on accurate assessments of the current
digital landscape. The higher penetration figures likely refer to
mobile network coverage or subscriptions, whereas lower
figures probably represent active individual internet users.
This nuanced reality—where infrastructure may be expanding
but actual, consistent access and usage lag, especially
considering urban-rural divides —indicates that the data
challenge itself is an obstacle for informed AI policymaking.
Furthermore, the phenomenon of "implicit AI adoption"
without widespread awareness, coupled with the rapid global
pace of AI development, signals a risk. Nepalese users and
Micro, Small, and Medium Enterprises (MSMEs) could become
passive consumers of AI-driven services developed elsewhere,
rather than active participants or creators. This could deepen
digital dependencies and limit local innovation if not
proactively addressed by targeted awareness campaigns and
skill-building programs that extend beyond basic digital
literacy to encompass AI-specific understanding.
Democratization of AI & New Realities
AI for All? Democratization, Competition, and the South
Asian Context
The AI landscape is witnessing a democratization trend, driven
by the availability of powerful Large Language Models (LLMs)
from a diverse range of developers such as OpenAI, Google,
and Meta, alongside a vibrant open-source movement. This
increased accessibility is particularly beneficial for Small and
Medium Enterprises (SMEs), individual creators, and the
unorganized sector in India.
The open-source AI movement holds particular significance for
Nepal. It provides a crucial pathway for the nation's
burgeoning SME sector and entrepreneurs to access AI tools
without the need for massive upfront investments in
proprietary technologies, thereby fostering innovation even
with limited resources. While specific metrics on Nepali
startups extensively using open-source AI are not detailed in
the available information, the general sentiment supports this
potential. Nepal's National AI Policy 2081, for instance,
encourages investment in AI entrepreneurship. The potential
for "frugal AI innovation," tailored to Nepal's specific needs
and resource constraints, is considerable. Examples of tech
innovation in Nepal include SecurityPal, which combines AI
with human expertise and has a significant operational base in
the country, and Dlytica’s "DataNature" platform, which aims
to help businesses leverage AI. Milo Logic Pvt Ltd. has also
demonstrated capability by integrating AI features into a
WordPress platform for a client. This accessibility to open-
source tools is vital for a developing economy where capital for
proprietary AI development may be scarce, allowing smaller
players to experiment and innovate.
While this democratization fosters distributed innovation, it
concurrently heightens global competition. Consequently, AI
literacy across the entire workforce has become a critical
necessity, a reality pertinent to both India and Nepal.
Although open-source AI effectively lowers entry barriers, its
successful utilization in Nepal is contingent upon addressing
foundational elements such as digital literacy, AI-specific skills,
and general awareness – areas where Nepal currently faces
notable gaps. Thus, the "democratization" of AI is not an
automatic benefit; it necessitates parallel investments in
human capital development to unlock its full potential. The
availability of tools is one aspect, but the capacity to use them
effectively requires a skilled and informed populace.
The "heightened global competition" aspect of democratized AI
presents a complex challenge for Nepal. While local MSMEs
can access these powerful tools, they find themselves
competing with global entities that often possess superior
resources to leverage the same open-source technologies. This
dynamic suggests that a strategic focus on niche areas where
Nepal might hold a comparative advantage—such as AI
applications for sustainable tourism, local language
processing, or agritech tailored to specific mountain farming
conditions—could be more viable than attempting direct
competition in already saturated AI domains. This approach
would allow Nepali MSMEs and entrepreneurs to carve out
sustainable value propositions.
The Dual Impact on Jobs: A Global, Indian & Nepali
Overview
Jobs in the AI Era: Creation, Transformation,
Displacement
Globally, the World Economic Forum (WEF) projects
approximately 170 million new jobs created versus 92 million
displaced by 2030 due to AI and automation, suggesting a net
positive outlook but indicating massive structural shifts. For
India, an EY report estimates that AI will impact 38 million
jobs by 2030, with a potential productivity boost of 2.61% in
the organized sector and 2.82% in the unorganized sector.
The increasing global adoption of AI is recognized as a force
that will profoundly alter the traditional concept of labour,
with machines potentially replacing human workers. This is a
significant concern for Nepal, given that its economy relies
heavily on remittances from largely unskilled workers. The
National AI Policy 2081 acknowledges the risk of AI-driven
unemployment but has been noted for lacking a detailed
workforce transition strategy. The automation potential of AI
poses a threat to traditional jobs, particularly in sectors such
as manufacturing, customer service, administration, and
agriculture.
Sector-specific impacts in Nepal include:
 Agriculture: This sector employs over 60% of Nepalis. AI
offers potential for optimizing farming practices through
applications in precision agriculture, crop monitoring,
yield prediction, and pest management, thereby
 improving yields and supporting farmers. The National AI
Policy 2081 specifically focuses on leveraging AI in
agriculture to enhance productivity. However, increased
automation in agricultural processes could also affect
demand for manual labour.
 Tourism: As a key economic driver for Nepal, the tourism
sector can benefit from AI through enhanced visitor
experiences, operational efficiencies, sustainable
practices, improved visitor engagement, safety protocols,
and destination management. Conversely, AI may displace
traditional roles such as travel agents and some
categories of hospitality staff. Concerns have also been
raised regarding potential job deskilling and a
degradation of human-to-human contact in service
interactions.
 Remittance-Dependent Economy: Remittances
constituted 26.31% of Nepal's GDP in 2024, with over
70% of the workforce engaged in informal jobs. The
government has faced challenges in meaningfully
reintegrating skilled migrant returnees, whose expertise
often goes underutilized. AI's impact on global job
markets could alter opportunities for Nepali migrant
workers. This necessitates a focus on reskilling programs
for both those seeking employment abroad and those
returning to Nepal.
 IT/BPO Sector: Nepal's IT service exports reached USD
515 million in 2022. Companies like CloudFactory employ
thousands in Nepal, providing data processing and AI-
related services to global clients. While this sector can
leverage AI to offer higher-value services, entry-level data
processing roles may face automation. AI is identified as
an emerging subsector for Foreign Direct Investment
(FDI) in Nepal's BPO industry.
Concerns about white-collar automation are significant. In
India, 68% of IT and BPO sectors expect automation within five
years (IIMA 2024). Nepal's emerging IT outsourcing sector
could similarly leverage AI for advanced services, but this may
also lead to pressure on entry-level data processing roles.
Globally and in India, McKinsey projects that up to 60 million
manufacturing jobs could be displaced by 2030.
Nepal's heavy reliance on remittances from a largely unskilled
labour force makes its economy particularly vulnerable to
global shifts in labour demand driven by AI. If AI automates
jobs abroad that Nepalis traditionally fill, it could severely
impact remittance inflows, which are a cornerstone of the
nation's economy. This situation creates an urgent imperative
for upskilling the migrant workforce and diversifying the
domestic economy to mitigate this macroeconomic risk, which
extends beyond domestic job displacement.
The absence of a concrete strategy within the National AI
Policy 2081 to address job displacement represents a critical
policy gap. While the policy emphasizes AI for economic
growth, a failure to proactively manage the socio-economic
consequences of labour transformation could lead to increased
inequality and social unrest. This could potentially undermine
the very developmental benefits that AI is intended to foster,
suggesting that a purely growth-focused AI strategy without
robust social considerations carries inherent risks and may not
be sustainable in its positive impacts. Experts have noted the
need for reskilling projects in Nepal to address these labour
market transitions.

The New Skill Frontier & Narrowing Entry Paths:

A Challenge for South Asian Youth
The AI era is creating new demands for specialists in
AI/Machine Learning, Big Data, and Cybersecurity. However,
the skills required for these new roles are vastly different from
those associated with jobs that are being displaced, leading to
a significant reskilling challenge in both India and Nepal. This
skills mismatch risks structural unemployment and increased
inequality.
Nepal faces a substantial challenge in bridging its digital skills
gap. The National AI Policy 2081 acknowledges a shortage of
skilled professionals as a key weakness and an impediment to
AI adoption. A 2022 report on IT service exports identified the
limited skills and competence of the IT workforce as a
significant challenge. Furthermore, a study on AI adoption in
Nepalese industries, published in February 2022, found that
56% of participating industries cited a lack of skilled
manpower as a major obstacle to AI adoption. Discussions by
the NAS-IT (Federation of Nepal ICT Industries and
Associations) in January 2025 also confirmed this shortage of
AI talent.
In response, the National AI Policy 2081 promotes AI skill
development, aiming to cultivate AI literacy, data science
expertise, and programming skills among the workforce. The
Digital Nepal Framework 2.0 also emphasizes "Skills and
Digital Literacy" as one of its strategic enablers. These data
points confirm a critical skills deficit that could hamper AI
adoption and exacerbate unemployment if not addressed
through targeted education and training reforms.
A critical issue is the narrowing of pathways for graduates into
entry-level white-collar jobs, as tasks such as data analysis and
report drafting are increasingly being automated by AI. This
trend particularly impacts social mobility and raises concerns
for Generation Z across the region.
The "lack of skilled manpower" cited by 56% of industries is
not solely an education system deficiency but may also reflect
insufficient investment by industries in on-the-job training or
in clearly signalling evolving skill demands to educational
institutions. This points to a need for stronger, more dynamic
collaboration between industry and academia to ensure
curricula align with market needs and to provide practical
learning opportunities.
The shrinking of traditional entry-level white-collar jobs due to
AI automation could disproportionately affect Nepal's youth,
who constitute a significant demographic segment (as
indicated by population statistics showing a large youth
cohort). If these conventional entry points into the formal
economy diminish without the concurrent creation and
widespread accessibility of new AI-economy pathways, it could
lead to significant youth disillusionment. This, in turn, might
exacerbate the "brain drain" phenomenon, a known challenge
for Nepal where skilled individuals seek opportunities abroad.
Therefore, creating accessible AI-related job pathways and
relevant skill development programs is crucial for retaining
talent and ensuring inclusive economic growth.

Part 2: AI's Impact Across Nepal's Employability

Sectors
AI's Footprint: Sector-Specific Impacts in India & Nepal
AI Across the Economic Landscape: India & Nepal
In India, AI's impact varies significantly across different
segments of the economy, including Multinational
Corporations (MNCs), domestic large businesses, Micro,
Small, and Medium Enterprises (MSMEs), the unorganized
sector, and the entrepreneurship ecosystem.
In Nepal, AI's influence and potential are being closely
watched across several key sectors, many of which are
targeted by the National AI Policy 2081. These include:
 Tourism: AI applications focus on personalization of
services, operational efficiency, promoting sustainable
tourism practices, enhancing visitor engagement,
improving safety measures, and optimizing destination
management.
 Agriculture: AI is seen as a tool for precision farming,
crop monitoring, yield prediction, pest management,
improving market access for farmers, and generally
optimizing farming practices to boost productivity.
 Hydropower: Identified as a key economic driver, AI
offers potential for optimizing energy generation,
distribution, and grid management. The Digital Nepal
Framework 2.0 specifically includes initiatives for
optimizing electricity planning and distribution using AI.
  MSME & Unorganized Sectors: These sectors form a
substantial part of Nepal's economy. AI can provide
benefits such as expanded market reach, improved
customer engagement (e.g., through chatbots), enhanced
operational efficiency, increased worker visibility in the
informal economy, and better job matching services.
 IT and Startup Ecosystem: This nascent but growing
ecosystem presents opportunities for AI-driven
innovation, particularly in areas like fintech, agritech, and
edtech.
 Healthcare: AI applications include improving diagnostic
capabilities (especially in remote areas), facilitating
telemedicine, enabling personalized treatment plans, and
optimizing resource management within the health
system.
 Finance: The financial sector is exploring AI for fraud
detection, enhancing credit scoring models, and
improving customer service through tools like AI-powered
chatbots.
The broad applicability of AI across these vital sectors, as
outlined in national policy documents like the National AI
Policy 2081 and the Digital Nepal Framework 2.0, underscores
a strategic intent to utilize AI as a cross-cutting enabler for
national development. However, given that AI adoption is still
in its early stages ("nascent"), realizing this widespread
potential necessitates overcoming systemic challenges—such
as deficiencies in skills, infrastructure, and awareness—that
are common across all sectors. Therefore, sector-specific AI
strategies must be supported by foundational, cross-sectoral
enhancements in these enabling factors.
Furthermore, the emphasis on AI in sectors like agriculture
and tourism, which have strong rural and community linkages
in Nepal, suggests a significant opportunity for AI to drive
inclusive growth, provided that solutions are designed and
implemented appropriately. There is, however, a corresponding
risk: if AI solutions are overly complex, expensive, or
inaccessible to smaller players, they could primarily benefit
larger, more capitalized entities. This could inadvertently
widen existing inequalities within these sectors, undermining
inclusive development goals. This highlights the importance of
ensuring that AI deployment considers accessibility and
affordability for all stakeholders.
MNCs in India & Nepal: Spearheading AI Adoption
Direct and specific data on Multinational Corporations (MNCs)
pioneering AI adoption within Nepal for its domestic market is
limited in the available information. However, Nepal's
engagement with the global AI landscape through MNCs is
evident in other ways. For example, Verisk Nepal, a subsidiary
of the global data analytics firm Verisk Analytics, provides
software development and data management services that
support its parent company's worldwide operations. This
implies engagement with advanced data analytics, potentially
including AI-driven processes. Similarly, CloudFactory, a global
company with a significant operational presence in Nepal,
offers AI-related data services—such as data labelling and
model oversight—to major international clients, including
Microsoft. This positions Nepal as a contributor to the global
AI value chain, often through an outsourcing model where
Nepali talent supports MNCs' AI initiatives.
For AI adoption with a direct impact on Nepal, the focus might
shift towards international development organizations
supporting AI projects or larger international tourism and
hospitality chains implementing AI for customer service
enhancements or operational efficiencies. The provided
information does indicate collaborations with international
organizations like UNESCO for AI policy development,
knowledge sharing, and ethical guideline formulation.
The presence of companies like CloudFactory and Verisk Nepal
performing AI-related work for global markets signifies
Nepal's integration into the international AI ecosystem,
primarily as a service provider and a hub for data-related
talent. This points towards "AI services export" as a viable and
growing area for the Nepali economy. This model is distinct
from MNCs deploying AI solutions specifically for Nepal's
domestic market.
The limited evidence of MNCs deploying advanced AI for the
Nepali domestic market could reflect various factors, including
perceptions of the current market size, the state of digital
readiness, or the evolving regulatory environment. This may
imply that for AI to be widely adopted within Nepal by large
international players for local purposes, further improvements
in these domestic conditions are necessary. Alternatively, it
suggests that domestic large businesses and government-led
initiatives will be the primary drivers of AI adoption tailored to
meet local needs and address specific national challenges.
Domestic Large Businesses: The AI Adoption Journey
Indian Giants & Leading Nepali Firms: Embracing AI for
Competitiveness
In India, adoption drivers for large businesses include
operational efficiency, enhanced customer experience, and
data-driven decision-making, with over 50% planning rapid AI
expansion (CII-Protiviti).
Leading Nepali firms, particularly in the banking and
telecommunications sectors, are beginning to embrace AI to
enhance competitiveness and service delivery.
 Banking Sector: Several prominent commercial banks in
Nepal are actively exploring and implementing AI
solutions.
o Nabil Bank has reported using AI in some of its
banking services and is further exploring its
application in areas like credit underwriting and
credit monitoring. The bank also utilizes business
intelligence software for real-time data analytics.
o NIC Asia Bank employs AI-enhanced solutions,
such as Freshworks' platform (which incorporates AI
capabilities), for its customer support operations.
This has reportedly led to an 82% first-contact
resolution rate for customer queries handled via
chat.
 o Overall, the financial sector, with commercial banks
leading at a 45% adoption rate of AI/ML
technologies, is utilizing these tools for credit
scoring, fraud detection, and customer service
enhancements, including AI-powered chatbots.
o Paaila Technology, a Nepali tech company, has also
contributed by providing AI-based automation
solutions to the financial services sector.
 Telecommunications Sector:
o Ncell launched 'MAYA,' an AI-powered chatbot, to
handle customer service inquiries, facilitate pack
purchases, and manage complaints. Ncell positions
itself as an enabler of next-generation technologies,
including AI. Furthermore, Ncell has partnered with
Dlytica, a data analytics firm, to utilize Dlytica's
"DataNature" big data platform for generating AI-
driven business insights.
o Nepal Telecom has the potential to leverage Large
Language Models (LLMs) for various applications,
including automated customer interactions,
sentiment analysis of customer feedback, voice-
based assistance systems, and predictive
maintenance for its network infrastructure.
 Other Sectors: Paaila Technology has also delivered
robotics and AI-integrated products and services to other
large enterprises, including SBI Nepal Limited and
nLocate.
The primary drivers for AI adoption among these larger Nepali
firms appear to be the pursuit of improved service delivery,
greater operational efficiency, enhanced customer
engagement, more effective resource management, and the
enablement of data-driven decision-making. The National AI
Policy 2081 supports this trend by aiming to modernize
industries and enhance national productivity through AI.
The current AI adoption by large Nepali firms, as documented,
is predominantly focused on customer-facing applications (like
chatbots and service personalization) and achieving
operational efficiencies. This pattern represents a common
initial phase of AI adoption observed globally, where
businesses target immediate returns on investment through
cost savings and improved customer interactions.
While these operational AI applications are beneficial, deeper
and more transformative uses of AI—such as in core product
research and development, complex strategic forecasting, or
advanced risk modelling beyond initial credit assessments—
appear less prevalent in the provided examples for Nepali
firms. This could indicate that while operational AI is being
embraced, the adoption of AI for strategic, enterprise-wide
transformation might still be in its early stages. This may be
due to factors such as the maturity of available data,
constraints in specialized AI talent required for more complex
implementations, or a more cautious investment approach
towards higher-risk, higher-reward AI projects. The journey
towards deep, strategic AI integration across these enterprises
is likely the next significant phase and challenge.
 Nabil Bank: Actively exploring AI for credit underwriting
and monitoring; utilizes Business Intelligence for real-
time data analytics.
 Ncell: Launched 'MAYA' AI chatbot for customer service ;
partnered with Dlytica for AI applications on its big data
platform.
 NIC Asia Bank: Leveraging AI-enhanced Freshdesk for
customer support, achieving an 82% first contact
resolution rate via chat.

Domestic Large Businesses: Overcoming Hurdles

Challenges for Large Domestic Firms in India & Nepal:
Bridging the Gap
Key hurdles for large domestic firms in India include a
significant skills gap (97% of executives cite this for GenAI -
EY), data governance issues (28% identify it as a roadblock),
trust deficits, and stalled AI projects.
Large domestic firms in Nepal face similar hurdles, often with
greater acuity due to the specific national context. These
include:
 Skills Gap and Talent Shortage: This is a primary and
frequently cited concern. The National AI Policy 2081
explicitly identifies a shortage of skilled professionals as a
systemic weakness. Studies and industry discussions
reinforce this, with 56% of industries noting a lack of
skilled manpower as a major challenge for AI adoption,
and NAS-IT discussions in January 2025 confirming an AI
talent shortage. A survey in the financial sector found
that 55% of institutions reported a shortage of skilled
professionals as a barrier to AI/ML adoption.
 Data Governance and Quality: The National AI Policy
has flagged outdated data governance laws as a
weakness. The absence of robust data protection laws
and comprehensive cybersecurity frameworks makes
Nepal’s digital ecosystem potentially vulnerable. In the
financial sector, 45% of institutions surveyed cited data
privacy and cybersecurity concerns as significant issues.
 Digital Infrastructure: Limited digital infrastructure is
a well-documented challenge for AI adoption in Nepal.
For instance, 60% of financial institutions identified the
lack of robust digital infrastructure as a key barrier.
 Investment Constraints and Cost of AI: Nepal's AI
ecosystem is generally considered underfunded. High
implementation costs were cited as a barrier by 40% of
financial institutions.
 Low Awareness and Understanding (Management
and General): Persistent low AI awareness across
various stakeholder groups, including potentially within
business management, is a challenge. Resistance to AI
adoption can stem from digital illiteracy and a fear of
change.
 Lack of Clear Implementation Roadmap/Strategy:
The National AI Policy has been critiqued for lacking a
 detailed implementation roadmap. Many organizations in
Nepal currently lack the readiness and strategic clarity to
implement AI solutions effectively beyond basic
applications.
 Regulatory Uncertainty: In the financial sector, 50% of
institutions surveyed pointed to regulatory uncertainty as
a hurdle for AI/ML adoption.
These interconnected hurdles—skills gaps, infrastructure
limitations, and investment constraints—create a challenging
cycle for Nepali businesses. For example, inadequate
infrastructure can hinder the generation and utilization of
quality data, which in turn limits opportunities for developing
AI skills and demonstrating a clear return on AI investments.
This cycle can be difficult to break without concerted efforts.
Furthermore, low awareness or support from top management
can be a critical, though often underestimated, barrier. Even if
technical talent and tools become available, transformative AI
adoption requires strong leadership vision, commitment to
organizational change, and strategic investment. Without this,
AI adoption is likely to remain piecemeal and tactical rather
than strategic and impactful. This highlights a pressing need
for executive education programs in Nepal focused on the
strategic implications and opportunities of AI.
A comprehensive approach involving clear AI strategies,
demonstrable ROI, and robust governance frameworks is
essential. In India, only 23% of enterprises report having
formal AI ethics frameworks; the gap is likely similar or even
wider in Nepal, where the national AI policy itself is relatively
new and its full implementation is pending.

MSMEs: AI for Growth - Opportunities

MSMEs in India & Nepal: AI as a Growth Engine
– Untapped Potential
Micro, Small, and Medium Enterprises (MSMEs) can leverage
AI for better decision-making through data analytics, increased
efficiency via automation, cost reduction, and improved
customer interaction. Globally and in India, Salesforce data
indicates that 78% of SMBs using AI report revenue growth.
Accessible AI tools like Zoho Analytics, Haptik chatbots, Locus
for logistics, and HubSpot for marketing are empowering
MSMEs.
Nepal's economy is significantly driven by MSMEs, which are
crucial for employment and local economic vitality. Affordable
and accessible AI tools, often cloud-based or open-source,
present substantial opportunities for these enterprises:
 Tourism Services: AI-powered chatbots can handle
tourist inquiries and provide information 24/7. AI can also
assist with personalized recommendations for activities
and itineraries, and automate booking processes for small
tour operators or guesthouses.
 Handicrafts and Artisans: AI can enhance market
reach through e-commerce platforms, potentially using AI
for personalized product recommendations. Customer
engagement tools, such as automated responses or
targeted marketing, can also be beneficial.
 Small-Scale Agriculture: Simplified and localized AI
tools could provide smallholder farmers with access to
crucial information on weather patterns, market prices,
and basic crop management or pest identification advice.
 Retail and Local Shops: Cloud-based AI solutions can
offer simple inventory management, basic accounting
functionalities, and tools for improved customer
interaction, such as chatbots for handling common
queries.
The "democratization of AI," facilitated by open-source tools
and more affordable solutions, is particularly key for this
segment of Nepal's economy. For a large number of Nepali
MSMEs, even basic AI tools could be transformative if the
existing barriers to adoption are effectively addressed.
The untapped potential for AI within Nepali MSMEs is vast.
However, realizing this potential requires more than just the
availability of tools. It necessitates targeted support programs
focusing on enhancing digital literacy, raising AI awareness
specifically tailored to MSME needs, and ensuring access to
affordable, localized AI solutions and relevant consultancy
services. Without these supportive measures, the gap between
AI's potential and its actual adoption by MSMEs will likely
persist.
If AI adoption by MSMEs is successfully fostered, it could lead
to a more resilient and diversified economic base in Nepal,
reducing over-reliance on a few large industries or remittance
inflows. Furthermore, it could stimulate grassroots innovation
and entrepreneurship, potentially leading to the creation of
new, locally relevant products and services that cater to
specific Nepali market needs. This, in turn, can contribute to
broader and more inclusive economic development.
MSMEs: AI Adoption - Barriers to Overcome
MSMEs in India & Nepal: Hurdles on the AI Adoption
Path
In India, barriers identified by NITI Aayog and other data
sources include financial constraints (59% face investment
challenges), lack of a skilled workforce (74% lack in-house
expertise), inadequate digital infrastructure, uncertainty
regarding ROI, and low awareness or support from top
management.
Nepali MSMEs face similar, and often more acute, hurdles in
adopting AI:
 Financial Constraints: Limited financial resources for
AI investment represent a major impediment. A study on
AI adoption in Nepalese industries (which includes
MSMEs) indicated that "small market size" and the need
for government support imply financial challenges.
 Skilled Workforce/Expertise: There is a significant lack
of in-house AI expertise within MSMEs, compounded by a
general shortage of AI-skilled manpower in the country.
 Digital Infrastructure: Unreliable or unaffordable
internet connectivity, particularly in non-urban areas,
remains a barrier.
  ROI Uncertainty: MSMEs often find it difficult to
quantify the potential benefits and return on investment
for AI solutions, especially for smaller-scale operations.
 Low Owner/Management Awareness: A critical barrier
is the lack of awareness and understanding of AI's
benefits and implementation pathways among MSME
owners and managers. General low AI awareness in the
country contributes to this.
 Lack of Locally Relevant AI Solutions and Support:
Generic global AI tools may not adequately address local
business needs, language requirements, or integrate well
with existing MSME processes.
 Digital Literacy: Basic digital literacy itself can be a
precursor barrier before MSMEs can even consider
adopting more advanced AI tools. The Digital Nepal
Framework's emphasis on improving digital literacy
across the population underscores this foundational need.
The 'Digital Nepal Framework' aims to tackle some of these
infrastructural and literacy gaps. However, specific, targeted
support for MSME AI adoption is crucial. The National AI
Policy 2081 also recognizes the importance of supporting AI
entrepreneurship, which can benefit the MSME ecosystem. A
study focusing on AI adoption in Nepalese industries found
that 56% of respondents identified small market size and lack
of skilled manpower as major challenges, while 44% indicated
that adequate government support would facilitate their AI
adoption efforts. These barriers collectively explain why,
despite the potential benefits and increasing availability of
some AI tools, MSME adoption of AI in Nepal is likely to be
very low without strategic interventions.
The "small market size" barrier, as mentioned by industries,
poses a particular challenge for MSMEs. It might
disincentivize AI solution providers from developing tailored,
affordable products specifically for the Nepali MSME segment,
thereby further limiting adoption. This situation suggests a
potential role for government or donor-supported initiatives to
catalyse the development of such localized solutions or to
support MSMEs in accessing existing tools.
The risk of a "Dual AI Economy"—where large enterprises
advance rapidly with AI while MSMEs are left behind due to
these persistent barriers—is highly pertinent for Nepal. If this
gap widens, it could significantly worsen economic inequality,
concentrate market power in the hands of a few, and stifle the
broad-based, inclusive economic growth that AI potentially
offers. This makes MSME-focused AI policies and support
mechanisms not just desirable but essential for equitable
national development.
The Unorganized Sector: AI for Empowerment &
Inclusion
AI for the Backbone: The Unorganized Sector in India &
Nepal
In India, AI shows potential to enhance worker visibility, create
verifiable digital reputations, overcome language barriers
through voice-based AI (e.g., Bhashini), and improve job
matching via Machine Learning.
Nepal's unorganized sector is vast, employing a significant
majority of the workforce. Over 70% of workers are engaged in
informal jobs, and agriculture, a large component of this
sector, employs over 60% of the population. AI offers several
avenues for empowerment and inclusion for this segment:
 Voice-based AI in Local Languages: This technology
could be a game-changer, helping to overcome literacy
and language barriers prevalent in the unorganized
sector.
o Potential Applications: Accessing vital agricultural
information (such as weather forecasts, market
prices, pest control advice), utilizing financial
services (like mobile payments or information on
micro-credit schemes), and learning about
government schemes and public services.
o Enabling Initiatives: The "National Language
Computational Resource Pack," an initiative under
 the Digital Nepal Framework, aims to develop
foundational resources for computing in various
Nepali languages. This is crucial for developing
effective local-language AI. Furthermore, existing
tools like the "Hamro Nepali Keyboard" already
support Nepali voice input, demonstrating existing
capabilities that can be built upon.
 Improved Job Matching and Market Access: AI-
powered platforms have the potential to enhance job
matching for daily wage earners. They could also connect
small agricultural producers and artisans directly to
markets, potentially bypassing intermediaries and
improving their income.
AI tools designed with inclusivity at their core—especially
those incorporating voice capabilities and local language
support—hold immense potential to empower this large but
often marginalized segment of Nepal's workforce.
The success of AI applications for Nepal's unorganized sector
is critically dependent on the progress of foundational
initiatives like the "National Language Computational
Resource Pack". Without robust local language processing
capabilities, the reach and impact of voice-based AI and other
tailored solutions will be severely limited. Developing these
NLP capabilities requires significant linguistic data and
computational resources (corpora, dictionaries, models), which
this initiative aims to build. Therefore, the practical
empowerment of the unorganized sector through AI is directly
linked to the successful development and dissemination of
these language resources.
While AI offers empowerment, challenges related to
algorithmic precarity, worker surveillance, and data ownership
are particularly acute for the unorganized sector in Nepal.
This sector often lacks formal protections and has limited
bargaining power. Without strong ethical guidelines and data
rights frameworks that specifically consider the vulnerabilities
of this group, AI could inadvertently lead to new forms of
exploitation or exclusion. If algorithms used for job matching
or performance monitoring are biased or opaque, or if data is
misused, workers in the unorganized sector may have little
recourse. This could shift power further towards platform
owners or employers, creating new vulnerabilities.
Consequently, responsible AI governance for the unorganized
sector must extend beyond merely providing access to tools; it
must include robust safeguards for worker rights, data privacy,
and ethical AI deployment.
Nepal Context Case Snippets:
 Krishi Ghar: An e-agriculture framework developed by
Co-founders including Anish Shrestha, which has
collaborated with government agencies and UNDP on
information systems and climate change forecasts
delivered via mobile platforms. While not explicitly
detailed as using AI currently, such platforms have strong
potential for future AI integration to provide more
sophisticated advisory services.
 Dlytica's "DataNature" Platform: While primarily a
B2B big data platform, its aim to help businesses leverage
data for insights could indirectly benefit the unorganized
sector if businesses within relevant supply chains (e.g.,
agriculture) use it to improve efficiencies that positively
impact small producers or workers.
 General AI in Agriculture/Healthcare: Broader
applications of AI tools for agricultural advice or remote
health diagnostics could reach individuals in the
unorganized sector if these tools are made accessible,
affordable, and available in local languages.

Entrepreneurship in the AI Age: India's Startup Boom &

Nepal's Emerging Scene
AI-Powered Entrepreneurship: India's Innovation Wave &
Nepal's Aspirations
India has a vibrant AI startup ecosystem, with over 1,600 AI
startups reported by NASSCOM in 2023, supported by
government initiatives like the IndiaAI Mission and Startup
India. These startups are impacting various sectors, often
focusing on homegrown, open-source, and sector-specific
"frugal AI innovation."
Nepal's startup ecosystem is in a phase of growth, with an
increasing interest in technology-based solutions. The National
AI Policy 2081 actively encourages investment in AI
entrepreneurship.
 AI Startups in Nepal: While the number of dedicated AI
startups is fewer compared to India, there is clear
potential for AI-enabled startups in key Nepali sectors
such as fintech, agritech, edtech, and tourism. Several
companies are already making strides:
o Fusemachines Nepal and Paaila Technology are
known for working on AI-driven solutions and
robotics.
o SecurityPal, an AI-augmented service company with
major operations in Nepal, serves global tech clients.
o Dlytica recently launched "DataNature," an AI-
powered Big Data platform in Nepal.
 Support Initiatives:
o Government Support: The National AI Policy 2081
plans to establish AI Incubation Hubs in
collaboration with academic institutions and
industries to nurture AI startups and innovation. The
policy also proposes financial incentives like tax
benefits and grants to encourage AI startups.
Amendments to the Industrial Enterprises Act now
recognize startups as distinct entities, aiming to
foster innovation, which aligns with the broader
"Startup Nepal" policy direction.
o Private Sector and NGO Involvement: Incubators
and accelerators such as Idea Studio Nepal and
Biruwa Advisors play a role in supporting tech
startups, although their focus is not exclusively on
AI.
  Focus on "Frugal AI": Given resource constraints,
Nepali AI entrepreneurs have an opportunity to focus on
developing context-specific solutions tailored to local
problems. This could involve leveraging open-source tools
to create "frugal AI" for sectors like agriculture, disaster
management, accessibility, and cultural heritage
preservation.
The success of companies like SecurityPal, which leverages
Nepali talent to provide AI-augmented services to global
clients, suggests a viable model for Nepali entrepreneurship.
This model focuses on addressing niche global service
demands where Nepal can offer a cost-effective yet skilled
workforce, rather than attempting to build globally
competitive AI products from scratch immediately. This
approach capitalizes on Nepal's young, tech-savvy population
and cost advantages, indicating that other Nepali startups
could find success by identifying specific global service needs
that can be met with a blend of AI and skilled local human
resources.
The emphasis in the National AI Policy 2081 on establishing AI
Incubation Hubs and providing support for AI startups is a
crucial step. However, the effectiveness of these hubs will
depend not merely on physical infrastructure or funding
availability. Critical success factors will include creating strong
linkages with global markets, providing mentorship from
experienced AI entrepreneurs (perhaps drawing from the
leadership of successful ventures like SecurityPal), and
fostering a regulatory environment that is genuinely
supportive of innovation, such as through the implementation
of regulatory sandboxes for AI experimentation. A holistic
ecosystem approach, rather than isolated interventions, will be
necessary for these policy initiatives to yield significant
results.
Nepal Context Case Snippets:
 SecurityPal: Founded by Pukar Hamal, this company
utilizes a combination of AI and human analysts based in
Kathmandu to efficiently handle complex security
 questionnaires for major global technology companies,
including OpenAI and Figma. It has achieved a valuation
of $105 million, generates over $10 million in revenue,
and employs 180 individuals in Nepal.
 Fusemachines: A provider of enterprise AI products and
services, Fusemachines also runs an AI Fellowship
program in Nepal aimed at developing local AI talent.
 Paaila Technology: This company focuses on robotics
and AI, with a mission to help Nepali companies integrate
AI into their operations. Its client roster includes notable
names like SBI Nepal Limited.
 Dlytica: Launched "DataNature," described as Nepal's
first AI-powered Big Data Platform, and has partnered
with Ncell to leverage this platform for business insights.
AI Startups: Challenges & Strategic Imperatives
Indian & Nepali AI Startups: Navigating Growth & Global
Competition
Challenges for AI startups in India include access to top-tier
talent, securing early-stage funding (especially for deep-tech
ventures), market access, and navigating complex regulatory
landscapes. Job creation by these startups is often nuanced,
with AI-native companies potentially scaling with leaner
teams.
Nepali AI startups face a similar set of challenges, often
intensified by local conditions:
 Access to Top-Tier Talent: A pronounced "brain drain"
of tech talent from Nepal is a significant issue. This is
compounded by a general shortage of AI-skilled
professionals within the country.
 Early-Stage Funding: Access to venture capital and
seed funding, particularly for research-intensive deep-
tech AI projects, is limited. The overall AI ecosystem in
Nepal remains underfunded.
  Market Access: The domestic market in Nepal is
relatively small, and accessing international markets can
be a considerable challenge for new startups.
 Regulatory Navigation: AI policy formulation is still in
its nascent stages, and current efforts may lack clarity
regarding implementation plans and international
cooperation. There is a recognized need for a more
supportive regulatory environment, potentially including
regulatory sandboxes for AI innovation.
 Data Availability and Quality: High-quality, relevant
data is crucial for AI development, but data governance
has been identified as an area of weakness in Nepal's AI
policy framework.
 Digital Infrastructure: While improving, Nepal's digital
infrastructure still presents challenges compared to more
developed AI ecosystems.
These challenges underscore the uphill battle for Nepali AI
startups and highlight the critical need for targeted policy
interventions and robust ecosystem support. Strategic
imperatives for both India and Nepal include strengthening
domestic AI education and research capabilities, and
implementing measures to attract and retain vital AI talent.
The "brain drain" of tech talent acts as a critical constraint
multiplier for Nepali AI startups. It not only limits the
immediate pool of potential founders and skilled employees
but also reduces the availability of experienced mentors and
angel investors who might have otherwise emerged from this
talent pool had they remained in or returned to Nepal. This
has both an immediate impact on talent availability and a
longer-term stunting effect on the growth and maturity of the
local AI ecosystem.
For Nepali AI startups to thrive in this challenging
environment, a phased or strategic approach to market focus
may be necessary. Initially, concentrating on AI-augmented
services for global clients (following models like SecurityPal)
or addressing highly specific local niches with "frugal AI"
solutions (e.g., for agriculture) could be more viable than
attempting to compete directly with global giants in product-
based AI. As the domestic ecosystem matures—in terms of
talent availability, funding mechanisms, and data
infrastructure—a gradual shift towards more ambitious AI
product development could become feasible. This implies that
policy support should also be nuanced, catering to the
different stages and models of startup development, rather
than a one-size-fits-all approach.

Part 3: Navigating the AI Transition: Challenges

and Opportunities
The Great Re-Skilling Imperative: A National Challenge
for India & Nepal
The Reskilling Revolution: Equipping India & Nepal for
an AI Future
In India, it's estimated that 91.5% of ICT jobs will transform
due to AI, with 31% of businesses lacking AI talent and 97% of
executives citing a GenAI talent gap. Globally, the WEF
projects a potential 23 million worker skill deficit by 2030. This
necessitates massive upskilling and reskilling efforts, focusing
on both advanced technical AI capabilities and uniquely
human-centric skills.
Nepal faces an urgent and substantial need for widespread
digital literacy programs and AI-specific reskilling initiatives.
The National AI Policy 2081 emphasizes the importance of AI
skill development, including fostering AI literacy, data science
expertise, and programming capabilities across the workforce.
Similarly, the Digital Nepal Framework 2.0 identifies "Skills
and Digital Literacy" as a key strategic enabler for the
country's digital transformation.
The current composition of Nepal's workforce makes this
challenge particularly acute. Over 70% of workers are
engaged in informal jobs, and a significant portion of the
migrant workforce is classified as unskilled. These
demographic groups are especially vulnerable to AI-driven
labour market disruptions and require targeted upskilling and
reskilling interventions.
Several policy and institutional efforts are underway or
envisioned:
 The National Education Policy 2019 aims to provide
"technical education for all," laying a broader foundation
for skill development.
 The National AI Policy 2081 advocates for the integration
of AI curricula into university and vocational training
programs and supports the establishment of dedicated AI
training centers.
 Key government bodies like the Ministry of
Communication and Information Technology (MoCIT) and
the Council for Technical Education and Vocational
Training (CTEVT) are involved in skill development. The
Digital Nepal Framework tasks MoCIT with capacity
building for AI, while CTEVT is working to produce a
skilled workforce and adapt its programs to technological
changes like AI.
 Industry associations like NAS-IT are also contributing,
for instance, by launching courses such as "DevOps
Fundamentals" and "Mastering Web Application
Development" with support from international agencies
like USAID.
The scale of the reskilling challenge in Nepal is immense,
considering the existing skill base of the population and the
profoundly transformative nature of Artificial Intelligence. The
reskilling imperative extends beyond just advanced technical
AI skills; it also encompasses the need for foundational digital
literacy for the vast majority of the population engaged in the
informal sector and residing in rural areas. Without this
fundamental digital literacy base, advanced AI training
programs will only benefit a small segment of the population,
potentially exacerbating the existing digital divide and
inequalities. Therefore, a two-tiered approach to reskilling is
essential: broad-based digital literacy initiatives for all,
coupled with specialized AI skills training for a segment of the
workforce aiming for specific AI-related roles.
The effectiveness of various reskilling initiatives, whether
governmental like those by CTEVT or from private training
institutes, will critically depend on their agility, direct
relevance to actual job market demands, and their ability to
scale. Traditional, slow-moving curriculum update cycles may
prove insufficient to keep pace with the fast-evolving AI
landscape. Consequently, robust partnerships with industry for
curriculum design and delivery, along with the strategic
leveraging of online learning platforms to expand reach and
accessibility, will be crucial for the success of these national
skilling efforts. The observation that CTEVT is still governed
by an older legislative act highlights the potential need for
modernizing institutional frameworks to ensure
responsiveness.
Beyond Skills: The Crucial "Learning Attitude"
In the rapidly evolving job market shaped by AI, Human
Resources leaders increasingly prize a "learning attitude" – the
inherent curiosity, adaptability, and willingness to continuously
acquire new knowledge and skills – often valuing it even more
than specific, existing technical skills.
In a country like Nepal, where formal educational curricula
may sometimes lag behind the swift pace of technological
shifts (as suggested by critiques of existing vocational training
frameworks like CTEVT being governed by older laws), and
where the AI ecosystem itself is still in a developmental phase,
fostering a culture of continuous learning is paramount.
Cultivating adaptability and a proactive "learning attitude"
among the youth and the broader workforce is even more
critical. This mindset is essential for navigating the inherent
uncertainties of the AI era and for building both individual and
national resilience in the face of ongoing change.
The cultivation of such a "learning attitude" in Nepal
necessitates a significant shift in pedagogical approaches
within the education system. This involves moving away from
traditional rote learning methodologies towards educational
practices that actively encourage and develop problem-solving
abilities, critical thinking, and self-directed learning. This
represents a deeper educational reform than simply adding
new AI-specific courses to existing curricula.
For Nepal, a strong "learning attitude" embedded within its
workforce could evolve into a distinct competitive advantage,
particularly in the burgeoning AI services export sector. If
Nepali professionals become known for their adaptability and
capacity for rapid learning, they will be better positioned to
pivot to new AI tools, techniques, and evolving client demands.
This adaptability would make the Nepali talent pool more
attractive and competitive in the global market, enabling the
nation to more effectively capitalize on opportunities within
the international AI economy.
Ethical Frontiers: Bias, Privacy, and Surveillance
The Ethical Maze: Navigating AI's Societal Impact in
India & Nepal
The advancement of AI brings forth critical ethical
considerations that societies must navigate. Key concerns
include:
 Algorithmic Bias: AI systems, if trained on biased data
or designed without careful consideration, can perpetuate
and even amplify existing societal inequalities related to
caste, gender, ethnicity, or regional disparities. This is a
significant concern for diverse societies like India and
Nepal.
o Nepal Context: The National AI Policy 2081
acknowledges the need for AI fairness and ethical
safeguards. However, it is also noted that Nepal
currently lacks a fully robust AI governance
framework to effectively regulate biased AI models
and ensure their ethical deployment. If AI systems
are not meticulously monitored and audited, they
risk reinforcing existing societal inequalities.
Ongoing discussions surrounding AI governance in
Nepal, often involving international partners like
 UNESCO, emphasize core values such as equality,
non-discrimination, and fairness in the development
and use of AI.
 Data Privacy: The voracious data requirements of many
AI systems create inherent tensions with the need to
protect personal data from misuse and to mitigate risks
associated with surveillance.
o Nepal Context: Nepal has established foundational
legal instruments for data privacy, including the
Individual Privacy Act, 2018 (2075). Additionally, the
revised draft of the Information Technology and
Cyber Security Bill, 2024, includes specific
provisions relating to the use of personal data,
requirements for consent, and mandates for data
destruction after its purpose is fulfilled. The Social
Media (Use and Regulation) Management Bill, 2024,
also contains clauses aimed at protecting user
privacy. Despite these legislative efforts, the
National AI Policy 2081 itself identifies "outdated
data governance laws" as a weakness. Concerns
persist that the lack of strong, modern data
protection laws and comprehensive cybersecurity
frameworks makes Nepal potentially susceptible to
AI-driven cyberattacks and privacy violations.
Ensuring data sovereignty and robust citizen privacy
is therefore paramount as AI adoption expands in
the country. A survey in the financial sector
indicated that 45% of institutions view data privacy
and cybersecurity as significant concerns.
 Workplace Surveillance: The use of AI in workplace
contexts raises questions about balancing productivity
monitoring with employee rights, privacy, and the
maintenance of trust.
The existence of the Privacy Act (2018) and various upcoming
IT and Cybersecurity bills provides a basic legal framework for
data protection in Nepal. However, the ultimate effectiveness
of these laws in the context of rapidly advancing AI will
depend significantly on their interpretation, the robustness of
enforcement mechanisms, and their capacity to adapt to new
AI technologies and evolving data practices. The AI policy's
own acknowledgment of "outdated data governance laws"
suggests that existing legal structures may not be fully
equipped to address all AI-specific challenges.
In Nepal's highly diverse social context—characterized by
multiple ethnic, caste, regional, and linguistic variations—the
risk of AI bias perpetuating or even amplifying existing
inequalities is particularly pronounced. This risk materializes if
training data for AI models is not representative of this
diversity or if algorithms are not meticulously designed and
audited for fairness. Such biases could lead to discriminatory
outcomes in critical areas like loan applications, job
recruitment, or even law enforcement, potentially undermining
social cohesion and the inclusive development goals frequently
articulated in national plans. The call for "local data collection
to enhance AI research relevance" is therefore critically
important to mitigate these risks and ensure that AI
development is sensitive to Nepal's unique societal fabric.

Responsible AI Governance in India: Policy & Practice

Building Trust: The Push for Responsible AI Governance
in India & Steps in Nepal
India has been proactive in developing AI governance
frameworks, with initiatives like NITI Aayog's "Responsible AI
for All" and state-level policies such as the Tamil Nadu AI
Policy.
Nepal is actively working to establish its framework for
responsible AI governance, primarily through its National AI
Policy 2081 (also referred to as 2025 by English
calendar). This policy serves as the country's principal
strategic document for guiding AI development, deployment,
and ethical oversight.
 Vision and Objectives: The policy envisions an AI-driven
digital transformation that modernizes industries and
 enhances national productivity. It focuses on key sectors
including agriculture, healthcare, tourism, education, and
governance.
 Ethical Emphasis: A strong emphasis is placed on
promoting ethical AI governance, ensuring fairness, and
implementing safeguards. The policy aims to align
Nepal's AI practices with international standards,
referencing organizations like the OECD and UNESCO.
 Proposed Institutional Bodies:
o AI Regulatory Council: This council, to be chaired
by the Minister of Communication and Information
Technology (MoCIT), is tasked with developing the
legal framework and ethical guidelines for AI.
o National AI Centre: Envisioned as the primary
coordinating body for all AI-related initiatives,
including research, innovation, and policy
enforcement.
o AI Excellence Centres: To be established in
universities and research institutions, these centres
will focus on AI research and development, with
particular attention to data privacy and ethical AI
practices.
o AI Incubation Hubs: Designed to support AI
startups and foster innovation within the
entrepreneurial ecosystem.
The Digital Nepal Framework (DNF), with its initial version
in 2019 and a draft for DNF 2.0 released in April 2025,
provides the broader context for Nepal's digital transformation
goals. DNF 2.0 explicitly integrates emerging technologies like
AI, blockchain, and IoT. A key component of DNF 2.0 is the
development of a national AI policy that ensures the safe,
ethical, and regulated use of AI.
The Ministry of Communication and Information
Technology (MoCIT) is the lead ministry responsible for AI
policy development, coordination, and oversight.
Nepal has also engaged in collaboration with UNESCO.
MoCIT and UNESCO jointly organized a multistakeholder
dialogue on AI governance in November 2023. This event
aimed to discuss AI regulation in Nepal and reintroduce
UNESCO's 2021 Global Recommendation on the Ethics of AI.
Furthermore, Nepal's Judiciary has contributed to the
development of UNESCO's guidelines for the use of AI in
judicial systems.
The current status is that the National AI Policy is in a draft or
recently formulated stage. Key challenges ahead include
developing a detailed implementation roadmap and effectively
addressing the socio-economic gaps that could hinder
equitable AI adoption.
While in India, only 23% of enterprises are reported to have
formal AI ethics frameworks, the gap is likely similar or
potentially wider in Nepal, given the nascent stage of its AI
policy and ecosystem.
Table: Key Pillars of Nepal's National AI Policy 2081 &
Proposed Institutions
Policy Aspect Details from National AI Policy 2081
AI-driven digital transformation for national
Vision growth, modernizing industries, enhancing
national productivity.
Promote AI research & development, foster
innovation and entrepreneurship, improve
Key Objectives good governance and public service, create
new business opportunities, contribute to
GDP.
Promote responsible and ethical AI, ensure
Ethical Focus AI fairness, establish safeguards, align with
international standards (OECD, UNESCO).
Institutional
Framework
(Proposed)
 AI Regulatory Council: Develop legal
framework & ethical guidelines; chaired by
MoCIT Minister.
National AI Center: Primary coordinating
body for AI initiatives, research, policy
enforcement.
AI Excellence Centers: In universities for
R&D, focusing on data privacy, ethics.
AI Incubation Hubs: To support AI
startups and innovation.

Nepal's ambitious approach to AI governance, featuring a

multi-tiered institutional framework, is noteworthy for a
developing nation. The successful realization of this vision will
heavily depend on securing adequate and sustained funding,
staffing these new bodies with individuals possessing genuine
expertise, ensuring their operational autonomy, and fostering
effective coordination among them. These are all significant
undertakings, particularly in resource-constrained
environments.
The active engagement with international bodies like UNESCO
and the stated intention to align with global standards are
positive indicators for Nepal's AI governance strategy.
However, a potential tension exists between adopting
international best practices and ensuring that these
governance frameworks are contextually relevant and
effectively address Nepal's specific socio-economic conditions,
cultural nuances, and developmental priorities. A simple "copy-
paste" approach to international models may not be optimal.
Therefore, Nepal will need to thoughtfully adapt, rather than
merely adopt, international guidelines to create a national AI
governance framework that is both robust and appropriate for
its unique circumstances. This aligns with calls for local data
collection and context-specific strategies to ensure AI's
relevance and responsible deployment.
Bridging the Digital Divide for Inclusive AI Adoption
AI for Every Citizen: Ensuring Inclusive Adoption in
India & Nepal
India faces a significant digital divide based on economic
status, geography, and social factors, impacting access to
technology, digital literacy, and infrastructure. This poses a
risk of AI exacerbating existing inequities, for example, in
education, where only 34% of schools had internet in India
(UDISE 2021-22).
Nepal confronts a stark digital divide, which presents a major
challenge to inclusive AI adoption:
 Urban-Rural and Socio-Economic Disparities in
Internet Access:
o While NTA data from January 2025 indicated a
55.8% internet penetration rate, the Nepal Living
Standard Survey (NLSS) 2022/23 (published in
2024) reported a lower overall figure of 39.7%. This
survey highlighted significant disparities: urban
areas like Kathmandu Valley had 79.3% connectivity,
whereas rural areas lagged at 17.4%.
o Critically, only 9.5% of households below the poverty
line reported having internet access.
o Regional imbalances are also pronounced, with
Bagmati province showing 59.8% household internet
access compared to only 14% in Karnali province.
 Infrastructure Challenges: Nepal's challenging
mountainous terrain significantly affects the rollout and
maintenance of digital infrastructure, particularly in
remote regions. This lack of robust digital infrastructure,
especially in rural areas, is a key barrier to AI/ML
adoption in sectors like finance and poses a general
challenge for widespread AI deployment.
 Digital Literacy Gaps: Low AI awareness and broader
digital illiteracy remain persistent challenges across the
population.
  Connectivity in Educational Institutions: Data from
the Ministry of Finance Economic Survey 2019-20
indicated that only 12% of public schools in Nepal had the
capacity for ICT-based learning. While the FY 2081/82
budget includes plans to expand broadband connectivity
to schools, more recent comprehensive data on current
internet penetration in schools is not detailed in the
provided snippets beyond this 2019/20 figure.

Table: Nepal's Digital Divide: Key Statistics

Metric Statistic Source(s)
55.8% (Active Users, Jan
Overall Internet (NTA);
2025) 39.7% (Household
Penetration (NLSS)
Access, 2022/23)
Urban Internet Access 79.3% (Household Access,
(NLSS)
(Kathmandu Valley) 2022/23)
17.4% (Household Access,
Rural Internet Access (NLSS)
2022/23)
Internet Access for
9.5% (Household Access,
Households Below (NLSS)
2022/23)
Poverty Line
Provincial Disparities
Bagmati: 59.8% vs.
(Household Access, (NLSS)
Karnali: 14%
2022/23)
Public Schools with ICT-
(MoF
based Learning Capacity 12%
Survey)
(2019-20)

Solutions being pursued in Nepal include:

 Strengthening Public Digital Infrastructure (PDI):
Nepal's Digital Nepal Framework (both DNF 1.0 and the
draft DNF 2.0) aims to significantly enhance PDI, expand
digital access nationwide, and improve digital literacy
 levels. Key enablers under DNF 2.0 include "Expanding
Digital Access" and "Building Resilient Infrastructure".
The National AI Policy 2081 also emphasizes the
development of AI-supportive infrastructure, such as
cloud computing platforms and national AI databases.
 Context-Aware and Inclusive AI:
o Nepal Context - Local Language Enablement:
Initiatives promoting Nepali language processing
and the development of AI applications in local
languages are considered vital for inclusivity. The
"National Language Computational Resource Pack"
is a key initiative under the Digital Nepal
Framework designed to create foundational
resources for computing in Nepali and other
recognized national languages. Existing tools like
the "Hamro Nepali Keyboard" already offer Nepali
voice input capabilities. The AI Policy 2081 also
mentions facilitating easy access to data, building a
comprehensive data ecosystem, and increasing AI
literacy as important goals.
o Nepal Context - Community Programs:
Supporting community-led digital literacy programs,
with a particular focus on reaching women and
marginalized groups, is recognized as key to
ensuring broader participation in the digital
economy.
The success of the Digital Nepal Framework in substantially
bridging the digital divide is a critical precursor to achieving
genuinely inclusive AI adoption across the nation. If the DNF
initiatives fail to significantly improve rural connectivity,
affordability, and digital literacy, the benefits of AI will likely
become concentrated in urban centers and among already
privileged segments of society. This outcome would directly
contradict the aspiration of "AI for Every Citizen" and could
exacerbate existing socio-economic disparities.
The strategic focus on a "National Language Computational
Resource Pack" is a highly important step for fostering
inclusivity in Nepal, given its rich linguistic diversity. However,
the creation of these computational linguistic resources is only
the first step. To achieve meaningful impact, it is crucial to
ensure that these resources are subsequently integrated into
user-friendly AI applications that are accessible to the general
populace. Furthermore, widespread awareness campaigns and
targeted training programs on how to use these local-language
AI tools will be essential for actual adoption and realizing their
benefits, especially within the unorganized sector and rural
communities. The journey from resource development to
deployment and finally to widespread adoption requires a
comprehensive and sustained effort.

Economic & Productivity Impact: Realizing AI's Potential

Fuelling Growth: AI's Economic & Productivity Promise
for India & Nepal
Projections for India suggest AI could add approximately $500
billion to its GDP by 2025. Globally, McKinsey estimates a
potential $4.4 trillion annual productivity growth driven by AI.
The primary drivers for this economic impact are increased
efficiency, data-driven decision-making, and enhanced
customer experiences.
While specific, quantitative GDP contribution projections for AI
in Nepal are not readily available in the provided information,
the national policy direction and sectoral analyses strongly
indicate that AI is viewed as a key future contributor to
economic growth and productivity.
 Qualitative Projections and Policy Aims: The National
AI Policy 2081 envisions AI as a pivotal tool to accelerate
economic development and enhance national productivity.
A core aim of the policy is to contribute to the Gross
Domestic Product (GDP) through fostering AI-driven
innovation and entrepreneurship.
 Potential for Sectoral Productivity Boosts:
o Agriculture: AI applications in precision farming,
crop optimization, and pest management are
 expected to lead to increased agricultural
productivity.
o Tourism: AI can drive productivity through
enhanced services, operational efficiencies, and
expanded global reach for tourism enterprises.
o Financial Services: The finance sector can see
productivity gains from broader financial inclusion,
increased operational efficiency, and improved fraud
reduction mechanisms powered by AI.
o Manufacturing and Services: The integration of
AI into manufacturing and service industries is
anticipated to increase automation, leading to
greater efficiency and innovation.
o Public Services: AI can enhance efficiency in e-
governance and public service delivery.
 General Economic Growth Driver: The AI policy aims
to promote AI-driven startups, research initiatives, and
AI-based industries as means to enhance overall
productivity, reduce operational costs, and generate new
employment opportunities. A general study by Bughin et
al. (2018), cited in analyses of Nepal's AI landscape,
suggests that AI-driven economies globally could
experience up to a 14% increase in GDP by 2030 (it is
important to note this is a general global projection, not
specific to Nepal). The Asian Development Bank (ADB)
projects Nepal's overall economy to grow by 4.4% in
FY2025, partly attributed to growth in the services sector
(which AI can enhance), although AI is not singled out as
the primary driver in this general economic forecast.
Realizing AI's economic potential is contingent upon
overcoming significant challenges, including addressing skill
shortages, improving data readiness and governance, and
managing implementation costs – all of which are highly
relevant for Nepal. A holistic and strategic approach is
therefore needed.
The absence of specific, Nepal-focused quantitative projections
on AI's economic impact (in contrast to those available for
India) underscores the nascent stage of AI adoption and
related economic modeling in Nepal. This data gap can itself
pose a challenge when advocating for strategic policy
decisions and securing necessary investments in the AI
ecosystem. Without concrete national projections, it can be
more difficult to build strong, evidence-based arguments for
prioritizing AI initiatives and allocating resources effectively.
For Nepal to fully realize the "productivity promise" of AI,
particularly in vital sectors such as agriculture and among its
numerous MSMEs, the strategic focus must be on developing
and deploying AI solutions that are not merely technologically
advanced but are also affordable, accessible, and adaptable to
local contexts and existing skill levels—often referred to as
"frugal AI." A top-down imposition of complex and expensive AI
systems might not yield the desired broad-based productivity
gains across these diverse and resource-sensitive segments of
the economy. This reinforces the importance of fostering local
innovation, leveraging open-source AI tools, and ensuring that
AI solutions are designed with the specific needs and
capacities of Nepali users in mind.

Part 4: Equipping for the Future: Strategies for Learners

and Institutions (India & Nepal)
Future-Proof Skills: Essential Competencies for the AI
Era
The AI Era Skillset: Blending Technical Prowess with
Human Ingenuity in South Asia
The AI era demands a new blend of competencies, integrating
strong technical skills with uniquely human attributes such as
critical thinking, creativity, emotional intelligence, and
complex problem-solving. This combination is essential for
individuals to thrive alongside increasingly capable AI systems.
Nepal Context - Implied Need
Given Nepal's identified skill gaps in digital and AI-related
fields and the profoundly transformative nature of Artificial
Intelligence, developing this multifaceted skillset is of
paramount importance for its workforce. This is especially
crucial for the nation's youth, enabling them to remain
relevant, competitive, and capable of harnessing AI for
individual and national advancement.
For Nepal, effectively "blending technical prowess with human
ingenuity" involves more than just incorporating coding and
data analysis into educational programs. It necessitates a
broader strengthening of the educational foundation in areas
like critical thinking, creativity, effective communication, and
collaborative problem-solving. These are precisely the "human-
centric" skills that AI cannot easily replicate (as highlighted in
Slide 26) and may be underdeveloped if the education system
has historically placed greater emphasis on rote learning and
memorization rather than on the cultivation of these higher-
order cognitive abilities.
The emphasis on "human ingenuity" is particularly significant
for Nepal in the context of identifying and developing niche AI
applications. While technical skills are required to build and
implement AI systems, uniquely human capabilities—such as a
deep contextual understanding of local problems, empathy
towards community needs, and sound ethical reasoning—are
crucial for designing AI solutions that genuinely benefit Nepali
society. These skills will enable the development of AI
applications that effectively address Nepal's specific
challenges, for example, in tailoring agritech for mountainous
regions, improving healthcare access in remote areas, or using
AI to preserve and promote Nepal's rich cultural heritage.
Thus, fostering these human skills alongside technical AI
competencies will empower Nepalis to develop more impactful
and appropriate AI solutions for their own country.

Technical Prowess: In-Demand Hard Skills for the AI Era

in South Asia
The evolving technological landscape driven by AI necessitates
a workforce proficient in a range of specialized hard skills. Key
technical competencies in high demand include:
 AI & Machine Learning (ML) Development: Skills in
creating, training, and deploying AI/ML models.
 Data Science & Analytics: Expertise in collecting,
cleaning, analysing, and interpreting large datasets to
derive actionable insights. This includes proficiency in
statistical analysis and data visualization.
 Big Data Technologies: Competence in handling and
processing massive volumes of data using frameworks
like Hadoop and Spark.
 Cybersecurity: Skills to protect AI systems, data, and
digital infrastructure from evolving cyber threats.
 Cloud Computing: Proficiency in utilizing cloud
platforms (AWS, Azure, GCP) for scalable AI development,
deployment, and data storage.
 Programming Languages: Strong command of
languages essential for AI/ML, such as Python and R.
 Natural Language Processing (NLP): Expertise in
developing systems that can understand, interpret, and
generate human language.
 Computer Vision: Skills in creating systems that can
interpret and understand visual information from the
world, such as images and videos.
 Robotics & Automation: Competence in designing,
building, and programming robotic systems and
automating processes.
 IoT (Internet of Things): Understanding how to
integrate AI with IoT devices and manage the data
generated.
Efforts are underway in Nepal to promote these critical
technical skills, although the development of a sufficiently
large talent pool remains a significant challenge.
  Higher Education Initiatives: Universities in Nepal,
such as Kathmandu University and Tribhuvan University
(particularly its Institute of Engineering), are increasingly
incorporating data science, AI, and ML modules and
courses into their engineering and IT curricula. For
instance, Tribhuvan University's Department of
Electronics and Computer Engineering has an AI and
Machine Learning Lab Cluster focusing on research in AI,
ML/DL, algorithms, and robotics. Kathmandu University
has introduced Bachelor and Master degrees in Artificial
Intelligence and is involved in AI research projects.
 Private Training Institutes: Private sector initiatives
are also contributing to building the AI talent pool.
Organizations like Fusemachines Academy (part of
Fusemachines), within Nepal Leadership Academy, offer
specialized AI/ML training programs, including their AI
Fellowship, designed to equip individuals with job-ready
AI skills. Skill Training Nepal is another private institute
offering AI training courses in Kathmandu, covering
Python for AI, ML fundamentals, AI applications, and
ethical AI, with both online and offline classes.
 Industry Association Efforts: The Federation of
Computer Association Nepal (CAN Federation) partners
with institutions like Madan Bhandari University of
Science and Technology (MBUST) to promote ICT and
develop skilled manpower, including offering scholarships
for postgraduate programs in AI and Data Science. NAS-
IT also launches skill enhancement courses, sometimes
with international support.
 Government Focus: The National AI Policy 2081 and the
Digital Nepal Framework 2.0 both emphasize AI skill
development, AI literacy, and capacity building as
national priorities. The policy advocates for integrating AI
curricula in universities and vocational training
institutions and establishing AI training centers.
Despite these efforts, a considerable gap persists between the
demand for advanced technical AI skills and the available
domestic talent. The "dearth of skilled human capital" and
"lack of AI expertise" are frequently cited as major challenges
for AI development and adoption in Nepal. This underscores
the need for scaling up quality AI education and training,
ensuring curricula remain relevant to industry needs, and
fostering stronger linkages between academia and the private
sector to create a sustainable pipeline of AI professionals.
The Human Edge: Cultivating Skills AI Can't (Yet)
Replicate in South Asia
While AI excels at data processing, pattern recognition, and
automation of routine tasks, there remains a crucial set of
human skills that AI systems currently cannot replicate
effectively. Cultivating these "human-edge" skills is essential
for individuals to complement AI and thrive in the future
workplace. These skills include:
 Critical Thinking & Complex Problem-Solving: The
ability to analyse complex situations, evaluate information
from multiple perspectives, and devise innovative
solutions to non-routine problems.
 Creativity & Innovation: The capacity for original
thought, generating novel ideas, and developing
imaginative approaches to challenges.
 Emotional Intelligence & Empathy: Understanding
and managing one's own emotions and perceiving and
influencing the emotions of others; the ability to connect
with and understand others' perspectives and feelings.
 Communication & Interpersonal Skills: Effectively
conveying information, listening actively, collaborating
with diverse teams, and building strong working
relationships.
 Leadership & People Management: Inspiring and
guiding teams, fostering collabouration, mentoring
others, and managing human dynamics within an
organization.
  Adaptability & Cognitive Flexibility: The ability to
adjust to new situations, learn new things quickly, and
switch between different concepts or perspectives.
 Ethical Judgment & Responsible Decision-Making:
Applying ethical principles to complex situations,
considering the societal impact of decisions, and
navigating moral dilemmas, especially relevant in the
context of AI deployment.
 Cultural Sensitivity & Cross-Cultural Collaboration:
Understanding and respecting diverse cultural
backgrounds and effectively working with people from
different cultures, increasingly important in a globalized
AI-driven economy.
Nepal Context
For Nepal, the development of these human-centric skills
within its education system and workforce training programs
is as vital as fostering technical AI proficiency. As Nepal
navigates its path towards greater AI adoption, these skills will
be crucial for:
 Designing Contextually Relevant AI: Applying
creativity and critical thinking to develop AI solutions
that address Nepal's unique socio-economic and
environmental challenges.
 Ensuring Ethical AI Deployment: Using ethical
judgment and cultural sensitivity to guide the responsible
implementation of AI, mitigating bias and negative
societal impacts.
 Managing AI-Driven Change: Employing leadership,
communication, and emotional intelligence to help
organizations and communities adapt to AI-induced
transformations in work and society.
 Complementing AI in the Workplace: Focusing human
efforts on tasks requiring these uniquely human skills,
working alongside AI systems to achieve better outcomes.
The emphasis on these skills is particularly important in a
context where educational reforms are ongoing and the aim is
to produce a workforce capable not just of using technology,
but of innovating with it and guiding its development
responsibly.

AI Literacy: A Universal Prerequisite in the Age of

Intelligent Systems – Perspectives from South Asia
AI literacy—a basic understanding of what AI is, how it works,
its capabilities, limitations, and ethical implications—is rapidly
becoming a foundational skill, not just for technical
professionals but for individuals across all business functions
and non-tech roles. It empowers employees to:
 Identify opportunities for AI application within their work.
 Collaborate effectively with technical teams on AI
projects.
 Use AI-powered tools more efficiently and responsibly.
 Understand the ethical considerations and potential
biases of AI systems they interact with.
 Contribute to the development of human-centric AI
strategies within their organizations.
Nepal Context
Given Nepal's current low levels of AI awareness and digital
literacy across various segments of the population, fostering
widespread AI literacy is a critical national priority. This is
essential for facilitating broader AI adoption, ensuring that
citizens can make informed decisions about AI's role in their
lives and work, and mitigating potential risks associated with
the technology.
 Importance for MSMEs: For Nepal's large MSME
sector, AI literacy among owners and employees is crucial
for them to recognize how AI can enhance their
businesses, even with simple, accessible tools. It can help
 demystify the technology and overcome resistance to
adoption.
 Importance for Public Sector Employees: AI literacy
within the public sector is vital for the effective
implementation of e-governance initiatives and for
leveraging AI to improve public service delivery, as
envisioned in the National AI Policy and Digital Nepal
Framework.
 Policy Emphasis: The National AI Policy 2081 explicitly
aims to increase AI literacy and efficiency and promotes
AI awareness and literacy programs. The Digital Nepal
Framework 2.0 also has "Skills and Digital Literacy" as a
core enabler.
Achieving broad AI literacy in Nepal will require concerted
efforts, including integrating AI concepts into general
education curricula, launching public awareness campaigns,
and providing accessible training resources tailored to
different audiences, including those in non-technical fields and
the informal sector. The success of such programs will be a key
determinant in Nepal's ability to harness AI inclusively and
effectively.

Pathways for STEM & Tech Learners: Adapting to

Evolving Roles in South Asia
For students and professionals in Science, Technology,
Engineering, and Mathematics (STEM) fields, the AI revolution
presents both significant opportunities and the need for
continuous adaptation. Evolving roles require:
 Deep Specialization: Developing expertise in specific AI
sub-fields like NLP, computer vision, or reinforcement
learning.
 Interdisciplinary Knowledge: Combining AI skills with
domain knowledge in sectors like healthcare, finance, or
agriculture to create impactful solutions.
  Focus on Applied AI: Moving beyond theoretical
knowledge to practical application and problem-solving
using AI tools and techniques.
 Lifelong Learning: Committing to continuous upskilling
and reskilling to keep pace with rapid advancements in
AI.
 Understanding AI Ethics and Governance: Integrating
ethical considerations into the design and deployment of
AI systems.
Nepal Context
For Nepali STEM and tech learners and graduates, adapting to
these evolving roles is crucial for their career prospects and
for contributing to Nepal's technological advancement.
 Opportunities:
o Global Outsourcing Market: With the right AI
skills, Nepali tech graduates can tap into the global
demand for AI talent by working on projects for
international clients. Companies like SecurityPal and
CloudFactory already employ Nepali talent for AI-
related services for global markets. This "AI services
export" model offers significant opportunities.
o Local Innovation: There is a growing need for tech
professionals who can develop AI-powered solutions
tailored to address Nepal's specific local problems in
agriculture, healthcare, disaster management,
education, and sustainable tourism.
o Entrepreneurship: STEM graduates with AI skills
are well-positioned to launch AI-driven startups, as
discussed in Slide 16 and 29.
 Challenges & Needs:
o Curriculum Modernization: Ensuring that
university and college curricula in STEM fields are
updated regularly to include the latest AI concepts,
tools, and ethical considerations is vital.
 o Practical Experience: Providing students with
more opportunities for hands-on projects,
internships, and industry collaborations to gain
practical AI experience.
o Faculty Development: Investing in training and
development for faculty members to ensure they are
equipped to teach cutting-edge AI topics effectively.
o Bridging the Skill Gap: Addressing the existing
skill gap between academic qualifications and
industry requirements in AI-related fields.
By focusing on these areas, Nepal can better equip its STEM
and tech learners to seize the opportunities presented by the
AI era, both domestically and internationally.
The AI Entrepreneur: Identifying Opportunities &
Building Ventures in South Asia
The AI age is unlocking a new wave of entrepreneurial
opportunities. AI entrepreneurs can create value by:
 Developing AI-native solutions that address previously
intractable problems.
 Building industry-specific AI tools for sectors like agri-
tech, health-tech, fintech, and ed-tech.
 Offering AI consultancy services to help businesses adopt
and integrate AI. The lowered barriers to entry, due to
open-source AI tools and cloud computing, enable
startups to scale with leaner teams and potentially
different funding dynamics. Key success factors include a
strong technical team, deep domain expertise, access to
quality data, a clear value proposition, and an agile
approach.
Nepal Context
For aspiring AI entrepreneurs in Nepal, there are unique
opportunities to innovate and address specific national and
local needs:
  Sustainable Tourism Management: Developing AI
tools for personalized tourist experiences, efficient
resource management in tourism hotspots, crowd
management, or promoting eco-tourism practices.
 Agritech for Mountain Farming: Creating AI solutions
tailored to the specific challenges of agriculture in
Nepal's diverse topography, such as optimizing irrigation
for terraced farms, predicting yields for local crop
varieties, or providing localized pest and disease
advisories.
 Disaster Risk Reduction and Management:
Leveraging AI for improved early warning systems for
floods, landslides, and earthquakes; optimizing resource
allocation during disaster response; or using AI for
damage assessment.
 Preserving Cultural Heritage: Using AI for digitizing
and preserving ancient manuscripts, artifacts, or
traditional art forms; creating virtual museum
experiences; or developing AI tools for language
preservation. The National AI Policy identifies cultural
heritage preservation as a key area for AI application.
 Developing Tools in Nepali and Local Languages:
Creating NLP applications, translation tools, voice
assistants, and educational content in Nepali and other
national languages to enhance accessibility and
inclusivity.
 Improving Access to Education and Healthcare in
Remote Areas: Developing AI-powered telemedicine
platforms, diagnostic support tools for community health
workers, or personalized e-learning solutions for students
in underserved regions.
Nepali AI entrepreneurs can find distinctive niches by focusing
on these context-specific problems, leveraging open-source
tools to develop "frugal AI" solutions that are effective and
affordable for the local market. The success of ventures like
SecurityPal, which operates significantly from Nepal providing
AI-augmented services globally, also demonstrates the
potential for Nepali entrepreneurs to tap into international
markets with specialized AI services.
Nepal Context Case Snippet:
 SecurityPal: While serving global clients, its operational
model and success story originating with a Nepali
founder and significant Nepal-based team serves as an
inspiring example of entrepreneurial vision leveraging AI
and local talent to solve specific business problems
(security compliance).
 Other emerging Nepali tech companies like Paaila
Technology (robotics and AI solutions), Dlytica (AI-
powered big data platform), and Fusemachines
(enterprise AI and talent development) are also indicative
of the growing entrepreneurial activity in Nepal's AI
space.

Reimagining Education & Skilling: Modernizing

Curricula in South Asia
Educating for Tomorrow: AI in Engineering &
Management in India & Nepal
In India, initiatives like AICTE's declaration of a "Year of AI"
and business schools offering AI-powered MBAs signal a shift
towards integrating AI into mainstream higher education. The
goal is to treat AI not just as a specialized subject but as a
foundational literacy for future engineers and managers.
Nepali universities and engineering colleges are also
beginning to integrate AI and data science into their curricula,
though the process is in its earlier stages and faces challenges.

 Current Initiatives:
o Kathmandu University (KU): Has introduced
Bachelor and Master degrees in Artificial
 Intelligence and is involved in various AI-related
research projects and collaborations, including those
focused on applying AI in diverse fields and
understanding its ethical implications. KU's
Directorate of Research, Development & Innovation
(RDI) supports such initiatives.
o Tribhuvan University (TU) - Institute of
Engineering (IoE): The Department of Electronics
and Computer Engineering at Pulchowk Campus
(IoE) has an "Artificial Intelligence and Machine
Learning Lab Cluster" dedicated to advancing
knowledge and innovation in AI and ML, with
research areas including NLP, computer vision,
algorithms, and robotics.
o Madan Bhandari University of Science and
Technology (MBUST): Partners with CAN
Federation to promote ICT and develop skilled
manpower, offering scholarships for Master of
Applied Science (MAAS) programs in Artificial
Intelligence and Data Science.
 Policy Support: The National AI Policy 2081 advocates
for the integration of AI curricula in universities and
vocational training institutions and the establishment of
AI Excellence Centers in universities to foster study,
research, and development. The Digital Nepal Framework
2.0 also emphasizes curriculum updates for AI adoption.
 Challenges and Needs:
o Broader Modernization Effort: While pioneering
institutions are making progress, a broader and
more systematic modernization effort is needed
across all higher education institutions in Nepal to
meet future demands for AI skills.
o Faculty Development: A significant challenge is
the availability of qualified faculty with expertise in
applied AI. Comprehensive faculty development
programs are essential for both Nepal and India to
 ensure educators can effectively teach complex AI
concepts and their practical applications.
o Industry Collaboration: Stronger collaboration
between universities and the IT industry is key for
developing practical, industry-relevant AI education
programs, providing internships, and ensuring
graduates possess job-ready skills.
o Curriculum Relevance: Ensuring curricula are
continuously updated to reflect the rapid
advancements in AI and the evolving needs of the
job market is crucial.
The shift towards viewing AI as a foundational literacy for all
STEM and management professionals is a critical step.
However, overcoming the challenge of developing a sufficient
pool of qualified faculty and ensuring the practical relevance
of AI education will require sustained investment and strategic
partnerships in Nepal.

Effectiveness of Skilling Initiatives & Fostering

Continuous Learning in South Asia
Skilling India & Nepal for AI: Initiatives, Challenges &
Lifelong Learning
Both India and Nepal have recognized the critical need for
skilling their populations for the AI era, with various
government and corporate efforts underway. However,
ensuring the quality, relevance, scalability, and ultimate
effectiveness of these initiatives presents ongoing challenges.
A fundamental culture shift towards "lifelong learning" is
becoming a necessity for individuals to remain adaptable and
employable.
Nepal Context
Nepal's government, through frameworks like the 'Digital
Nepal Framework' (DNF) and institutions such as the Council
for Technical Education and Vocational Training (CTEVT), aims
to enhance digital literacy and technical skills. The National AI
Policy 2081 also strongly promotes AI skill development and
the establishment of training centres.
 Government Initiatives:
o Digital Nepal Framework (DNF 2.0): Includes
"Skills and Digital Literacy" as a strategic enabler,
with plans for capacity building around AI adoption,
curriculum updates, and upskilling/reskilling
programs across public and private sectors.
o CTEVT: This national body for Technical and
Vocational Education and Training aims to produce a
skilled workforce. It is acknowledged that CTEVT
needs to adapt to changes brought by AI and ensure
its curricula are relevant to modern job demands.
While CTEVT offers numerous technical diplomas
and TSLC programs in engineering, IT, and other
fields, specific, widely available AI-focused
certifications from CTEVT are not detailed as
extensively as traditional trades.
o Ministry of Communication and Information
Technology (MoCIT): Plays a lead role in AI policy
and skill development initiatives outlined in the DNF
and National AI Policy.
 Private Sector and Industry Body Efforts:
o Private training institutes like Fusemachines
Academy and Skill Training Nepal offer
specialized AI/ML training.
o Industry bodies like the CAN Federation
collaborate with universities (e.g., MBUST) to
develop skilled manpower and offer scholarships in
AI/Data Science.
o NAS-IT organizes focused group discussions on AI's
impact, highlights talent shortages, and launches
upskilling courses with support from partners like
USAID.
 Challenges in Skilling Initiatives:
 o Quality and Relevance: Ensuring that training
programs deliver high-quality education and that the
skills taught are directly relevant to the evolving
needs of the AI job market is a constant challenge.
o Scalability: Reaching a large enough portion of the
population with effective AI skilling programs,
especially in remote and underserved areas,
requires scalable solutions.
o Faculty and Trainer Expertise: Availability of
qualified trainers and educators with up-to-date AI
knowledge.
o Clear Pathways to Employment: Connecting
skilling initiatives directly to employment
opportunities and ensuring that certifications are
recognized by employers.
o Addressing the Informal Sector: Developing
appropriate skilling programs for the vast
unorganized sector, which often requires different
approaches and focuses (e.g., basic digital literacy,
use of simple AI tools in local languages).
A fundamental culture shift towards embracing "lifelong
learning" is essential for the Nepali workforce. In a rapidly
changing technological landscape like AI, skills acquired today
can quickly become outdated. Therefore, individuals must
cultivate a mindset of continuous learning and adaptation to
navigate their careers successfully. For skilling initiatives to be
truly effective, they must not only impart current knowledge
but also instil this crucial attitude of ongoing self-improvement
and adaptability.

Part 5: Charting Nepal's AI-Driven Future: Policy

and Strategic Imperatives
Strengthening the AI Ecosystem: Policy to Practice
Building AI Powerhouses: From Vision to Reality in India
& Aspirations for Nepal
India's AI strategy emphasizes "AI autonomy" and developing
homegrown solutions, built on key pillars such as research and
development, skilling, and responsible AI governance, aiming
to position India as a global AI hub. Success hinges on
sustained investment and effective public-private partnerships
(PPPs).
Nepal Context
For Nepal, developing a comprehensive national AI strategy is
a critical step towards harnessing AI for national development.
While the National AI Policy 2081 lays a foundational vision, its
translation into effective practice requires a clear roadmap
and concerted effort. A potential AI strategy for Nepal should
focus on:
 Leveraging AI for Inclusive Growth: Prioritizing AI
applications that contribute to equitable development and
benefit a wide range of the population.
 Addressing Key Developmental Challenges: Targeting
AI interventions towards solving pressing national issues
in sectors like agriculture (food security, climate
resilience), healthcare (access in remote areas, diagnostic
support), education (personalized learning, skill
development), and disaster management (early warning,
response coordination).
 Fostering a Local Innovation Ecosystem: Creating a
supportive environment for AI research, startups, and
local talent development. This includes establishing AI
research centres, AI-specific education programs, and
providing funding opportunities.
 Key Strategic Elements for Nepal's AI Strategy
could include:
o Investing in Digital Infrastructure: Ensuring
widespread, affordable, and reliable internet
connectivity, particularly in rural and underserved
areas, and developing robust data centre
capabilities. The National AI Policy draft includes
 plans for expanding high-speed internet (5G and
beyond) and developing world-class data centres.
o Developing AI Talent: Implementing
comprehensive programs for AI education,
reskilling, and upskilling at all levels, from basic AI
literacy to advanced specialization. This involves
modernizing university curricula, supporting teacher
training, and incentivizing private sector training
initiatives.
o Promoting Data Governance Frameworks:
Establishing clear, modern, and robust legal and
ethical frameworks for data collection, storage,
sharing, and privacy that build trust and enable AI
innovation while protecting citizens' rights.
o Encouraging Public-Private Partnerships
(PPPs): Fostering collaboration between
government, industry, and academia for AI
development, deployment, research, and startup
incubation.
o Learning from Regional and Global
Experiences: Drawing insights from India's IndiaAI
Mission and open-source initiatives like Bhashini
could be beneficial for Nepal in shaping its own
approach, particularly in areas like local language AI
development and building public digital goods.
The overarching goal for Nepal should be to strategically
integrate AI in a manner that aligns with its national priorities,
resource capacities, and socio-cultural context, aiming for
sustainable and equitable progress rather than merely
replicating models from larger economies. Sustained
investment, effective PPPs, and a clear implementation plan
for the National AI Policy are crucial success factors.

Title: The Imperative of Multi-Stakeholder Collaboration

for AI Success in South Asia
Achieving a successful and responsible AI transition requires
robust collaboration among various stakeholders. Each plays a
critical role:
 Government: Setting the national vision and strategy for
AI, developing enabling policies and regulations,
investing in public digital infrastructure and R&D,
promoting AI literacy and skilling, and ensuring ethical
oversight.
 Industry (Businesses of all sizes): Driving AI
innovation and adoption, investing in AI solutions and
talent, developing new AI-powered products and services,
collaborating with academia on research and skill
development, and adhering to ethical AI principles.
 Academia and Research Institutions: Conducting
cutting-edge AI research, developing AI talent through
updated curricula and training programs, fostering
innovation through university-led startups and
incubation, and providing expertise for policy
development and ethical guidance.
 Civil Society Organizations (CSOs) and NGOs:
Advocating for inclusive and ethical AI, raising public
awareness about AI's impacts, representing the interests
of marginalized communities, and contributing to digital
literacy and skill-building efforts.
 International Partners and Development
Organizations: Providing technical assistance, sharing
best practices, supporting capacity building, and
facilitating knowledge exchange and funding for AI
initiatives.
Nepal Context
For Nepal, where resources (financial, technical, human
capital) may be more constrained compared to larger
economies, effective multi-stakeholder collaboration is not just
beneficial but absolutely vital to build a cohesive and impactful
AI ecosystem. Fragmented efforts or working in silos will likely
lead to duplication, inefficiencies, and a failure to achieve
national AI goals.
 Government-Industry-Academia Linkages: Strong
partnerships between Nepal's government (led by MoCIT
and other relevant ministries), its growing IT industry and
broader business sector, and academic institutions (like
Kathmandu University, Tribhuvan University, MBUST) are
crucial for aligning AI education with industry needs,
fostering joint R&D projects, creating internship and
employment opportunities, and ensuring that policy
development is informed by practical realities and
technical expertise.
 Role of CSOs and Community Engagement: Involving
CSOs in AI discussions and initiatives can help ensure
that the voices of local communities and vulnerable
groups are heard, and that AI solutions are designed to
be inclusive and address real-world needs. This is
particularly important for initiatives targeting the
unorganized sector or rural development.
 International Collaboration: Nepal is already engaging
with international bodies like UNESCO for AI governance
and ethics. Expanding such collaborations to include
knowledge transfer, capacity building for AI skills, and
attracting foreign investment in the AI sector is important
for accelerating Nepal's AI journey.
A coordinated, collaborative approach will enable Nepal to
pool its resources effectively, leverage diverse expertise, and
create a synergistic environment for AI development and
adoption that serves the national interest.

Recommendations for Policymakers

Charting the Course: Policy Imperatives for an AI-Ready
India & Nepal
For India, key policy actions include accelerating skilling
initiatives, strengthening R&D, fostering responsible AI
governance, and bridging the digital divide.
Nepal Context - Tailored Recommendations for
Policymakers:
To effectively navigate the AI transition and harness its
potential for national development, policymakers in Nepal
should consider the following imperatives:
1. Develop and Implement a Comprehensive National
AI Strategy with a Clear Roadmap:
o Finalize and vigorously implement the National AI
Policy 2081, ensuring it clearly outlines Nepal's
vision for AI, identifies priority sectors for AI
intervention (e.g., agriculture, health, education,
tourism, disaster resilience), and details actionable
plans with specific timelines, allocated budgets, and
responsible agencies for each initiative. The current
lack of a detailed implementation roadmap is a noted
weakness.
2. Invest Critically in Digital Infrastructure and
Literacy:
o Prioritize and accelerate the expansion of affordable,
reliable, and high-speed internet access, particularly
in rural, remote, and underserved areas, to address
the stark digital divide. This includes supporting the
rollout of 5G and fibre-optic technologies.
o Launch widespread and sustained digital literacy
campaigns, including AI literacy, targeting all
segments of the population, including MSMEs, the
unorganized sector, and public sector employees.
3. Foster AI Talent Development at Scale:
o Systematically modernize educational curricula at all
levels (school, vocational, university) to integrate AI,
data science, and related digital skills.
 o Invest in comprehensive training and upskilling
programs for teachers and faculty to build their
capacity in AI.
o Incentivize and support private sector training
initiatives and public-private partnerships for AI skill
development.
o Consider offering scholarships and other incentives
for students pursuing higher education and research
in AI and related fields to build a robust domestic
talent pool.
4. Promote AI for Public Good and National
Challenges:
o Allocate dedicated funding for pilot projects and
scalable initiatives that utilize AI to address critical
national challenges in priority sectors such as
sustainable agriculture, accessible healthcare,
quality education, efficient public service delivery,
and disaster preparedness and resilience.
5. Establish Light-touch, Enabling, and Adaptive
Regulation for AI:
o Create clear, agile, and forward-looking guidelines
for data governance, data privacy, and AI ethics that
encourage innovation and investment while robustly
protecting citizens' rights and ensuring security.
These should align with international best practices
but be adapted to Nepal's context.
o Consider establishing regulatory sandboxes to allow
for experimentation and innovation in AI
development and deployment in a controlled
environment.
6. Support MSME AI Adoption and Digital
Transformation:
o Develop and implement targeted programs that
provide financial incentives (e.g., grants, subsidized
loans), technical assistance, and awareness
 campaigns to help MSMEs understand and leverage
the benefits of AI tools for productivity, market
access, and growth.
7. Encourage Development and Use of Nepali
Language AI Tools:
o Actively support and fund research and development
for AI applications, datasets, and computational
resources in Nepali and other major national
languages to ensure inclusivity and broader
accessibility of AI technologies. This is crucial for
reaching the unorganized sector and those with
limited English proficiency.
8. Strengthen Cybersecurity and Data Protection
Measures:
o Enhance national cybersecurity capabilities and
enforce data protection laws rigorously to build trust
in digital systems and protect against AI-driven
threats. The National AI Policy draft includes
provisions to regulate misinformation and enhance
security.

Recommendations for Businesses in South Asia

General recommendations for businesses include investing in
AI talent and skills, fostering a data-driven culture, starting
with clear use cases and pilots, prioritizing ethical AI and data
governance, and collaborating with startups and academia.
Nepal Context - Specific Considerations for Businesses:
 Large Domestic Businesses (Banks, Telcos, etc.):
o Move beyond customer-facing AI (chatbots) to
explore strategic AI applications in core operations,
risk management, product innovation, and supply
chain optimization.
 o Invest in data infrastructure and governance to
ensure high-quality data for more sophisticated AI
models.
o Actively partner with Nepali universities and
training institutes to co-develop relevant AI curricula
and provide internships, helping to build the local
talent pipeline they need.
o Champion AI literacy programs within their
organizations for all levels of employees.
 Micro, Small, and Medium Enterprises (MSMEs):
o Start small by exploring readily available and
affordable cloud-based AI tools for specific pain
points like marketing automation, customer service
(simple chatbots), basic data analytics for sales, or
inventory management.
o Focus on solutions that offer clear and quick ROI.
o Seek guidance and support from industry
associations (like FNCCI, CAN Federation),
government support programs (if available), and
local IT consultants who understand MSME needs.
o Prioritize digital literacy and basic AI awareness for
owners and key staff.
 All Businesses:
o Emphasize building a "learning attitude" within their
workforce to adapt to AI-driven changes.
o Pay close attention to data privacy regulations
(Privacy Act 2018, upcoming IT Bill) and ensure
ethical AI deployment, especially concerning
customer data.
o Collaborate with other businesses, where
appropriate, to share knowledge and best practices
on AI adoption, potentially through industry forums.
Recommendations for Educational Institutions in South
Asia
General recommendations for educational institutions include
modernizing curricula to integrate AI, fostering
interdisciplinary AI research, developing AI faculty capacity,
partnering with industry for relevance, and promoting AI
ethics education.
Nepal Context - Specific Considerations for Educational
Institutions:
 Universities and Colleges (e.g., KU, TU, MBUST):
o Continuously update engineering, IT, management,
and other relevant curricula to include foundational
AI concepts, advanced AI/ML topics, data science,
and AI ethics, ensuring alignment with global
standards and local industry needs.
o Actively seek and establish robust partnerships with
international universities and research institutions
to build AI faculty capacity through exchange
programs, joint research, and curriculum
development support.
o Strengthen collaborations with local and
international industries to provide students with
practical AI experience through internships,
capstone projects based on real-world problems, and
guest lectures from industry practitioners.
o Promote and fund interdisciplinary AI research that
focuses on addressing Nepal's specific
developmental challenges and contextual realities
(e.g., AI in sustainable agriculture, disaster
resilience, public health in remote areas,
preservation of cultural and linguistic heritage).
o Establish dedicated AI research labs and centres of
excellence, as envisioned in the National AI Policy,
and seek funding for these from both public and
private sources.
 o Offer specialized AI degree programs (Bachelor's,
Master's, PhD) as well as AI modules and
certifications for students in other disciplines to
promote broader AI literacy and skill development.
 Vocational Training Institutions (e.g., under
CTEVT):
o Develop and offer short-term, practical AI-related
skill development courses targeting specific job roles
that are emerging due to AI (e.g., data annotation,
AI system maintenance, AI tool operation for specific
industries).
o Ensure that CTEVT's framework and curricula are
modernized to incorporate digital and AI skills
relevant to the current and future job market,
moving beyond traditional trades where appropriate.
o Focus on making AI-related vocational training
accessible and affordable, potentially leveraging
online and blended learning models.

Recommendations for Individuals (Learners, Workers,

Entrepreneurs) in South Asia
General recommendations for individuals include embracing
lifelong learning, developing a blend of technical AI skills and
human-centric skills, cultivating AI literacy, seeking out AI-
related projects and experiences, and considering AI-driven
entrepreneurial opportunities.
Nepal Context - Specific Considerations for Individuals:
 Learners (Students):
o Proactively seek out courses and resources on AI,
data science, and programming, both within formal
education (if available) and through online
platforms.
 o Focus on developing strong foundational STEM skills
and complement them with critical thinking,
problem-solving, and communication abilities.
o Participate in coding clubs, hackathons, and AI-
related competitions to gain practical experience
and network with peers.
o Look for internship opportunities with companies
working on AI projects in Nepal.
 Workers (Across all sectors):
o Cultivate a "learning attitude" and be open to
acquiring new digital and AI-related skills relevant
to their current or future job roles.
o Take advantage of any upskilling or reskilling
programs offered by employers, government
initiatives (e.g., under DNF or CTEVT), or private
training providers.
o Develop AI literacy to understand how AI might
impact their industry and how they can use AI tools
effectively and ethically in their work.
o Focus on honing human-centric skills
(communication, collaboration, empathy, creativity)
that complement AI.
 Entrepreneurs (Aspiring and Existing):
o Focus on identifying specific problems or unmet
needs within the Nepali context (e.g., in tourism,
agriculture, healthcare access, education, local
language content, disaster management) where AI
can offer unique and impactful solutions.
o Leverage open-source AI tools and cloud platforms
to develop "frugal AI" solutions with lower initial
investment.
o Seek mentorship from experienced tech
entrepreneurs in Nepal and connect with the
 growing startup ecosystem, including incubators and
accelerators like Idea Studio Nepal.
o Explore opportunities in the AI services export
market, providing specialized AI-augmented services
to international clients, drawing inspiration from
successes like SecurityPal.
o Stay informed about government support for
startups, including initiatives under the National AI
Policy and Startup Nepal frameworks.

Conclusion
The AI Moment: A Pivotal Juncture for India & Nepal
The AI Opportunity: Shaping a Defining Decade for India
& Nepal
The AI transformation is no longer a distant prospect; it is
here, reshaping industries, economies, and societies globally.
India, with its unique strengths in technology, talent, and
market size, is poised to play a significant role in the global AI
landscape.
Nepal, too, stands at a crucial and pivotal juncture. With its
predominantly young population, growing digital adoption
(albeit with existing divides), and the inherent potential to
leapfrog traditional, slower development paths by strategically
embracing new technologies, the nation has a unique
opportunity. AI offers a pathway to drive sustainable and
inclusive growth, modernize key sectors, and enhance the
quality of life for its citizens.
For both India and Nepal, a key challenge lies in balancing the
immense potential of AI with the profound implications it holds
for the workforce, the ethical considerations it raises, and the
imperative to ensure social equity in its adoption and benefits.
The strategy of pursuing "AI autonomy" (developing
indigenous capabilities) and "AI for social good" offers a
distinctive path forward for India, and provides a valuable
model for Nepal to consider as it formulates and refines its
own national AI journey. The choices made in this defining
decade will significantly shape the future trajectory of both
nations in the algorithmic age.
The Path Forward: Decisive, Collaborative, Visionary
Action
The Imperative: Collaborative Action for an AI-Powered
Future in Our Region
The path forward in navigating the AI revolution requires
decisive, collaborative, and visionary action from all
stakeholders in both India and Nepal.
 Empowering Human Capital: This is paramount.
Investing in education, skilling, reskilling, and fostering a
culture of lifelong learning is the cornerstone of
preparing citizens for an AI-driven future. For Nepal,
addressing the skills gap and enhancing AI literacy across
the population are urgent priorities.
 Bridging the Digital Divide: This is an economic and
moral necessity for both nations. Ensuring equitable
access to digital infrastructure, technology, and AI-
powered services is crucial for inclusive growth and
preventing the exacerbation of inequalities. Nepal's
Digital Nepal Framework aims to address this, but
sustained effort is required.
 India's Potential: India has the potential to emerge as a
global leader in AI, leveraging its demographic dividend,
tech prowess, and vibrant startup ecosystem.
 (Nepal Context): Nepal has a distinct opportunity to
harness AI to achieve its national development goals,
improve the efficiency and reach of citizen services, and
create new economic avenues. This can be realized by
fostering a truly collaborative ecosystem involving
government, industry, academia, and civil society,
working in concert to implement its National AI Policy
and related strategies.
The time for incremental progress in adapting to technological
change is over. The current moment demands decisive policy
choices, deep collaboration across sectors, and visionary
leadership to steer both India and Nepal towards an AI-
powered future that is prosperous, equitable, and human-
centric.