Promoting Local IT Industry vs. Government Competition: CAN Federation Acting President Chiranjibi Adhikari Demands Policy Rethink

27th June 2026, Kathmandu

The Government of Nepal is in its final stages of establishing a centralized Software Development and Operations Center under the Office of the Prime Minister and Council of Ministers.

Promoting Local IT Industry

Tasked with developing all necessary software solutions internally for government offices nationwide, the center is scheduled to launch its operations this coming Shrawan. Officials claim that this strategic move will significantly curb the state’s soaring software procurement and licensing expenditures, which currently drain over Rs. 20 billion annually.

While reducing public expenditure and striving for digital self-reliance appear positive on the surface, this looming policy shift has triggered severe anxieties and widespread debate within Nepal’s rapidly expanding Information Technology (IT) sector.

Weighing in on the matter, Chiranjibi Adhikari, Acting President of the Computer Association of Nepal (CAN) Federation and a prominent tech industry leader, has raised a red flag, warning that this policy could fundamentally weaken the very foundations of a “Digital Nepal.”

The Core Concern: Government Must Foster, Not Compete with Private Sector

Representing the collective voice of domestic software enterprises and the tech ecosystem, CAN Federation Acting President Chiranjibi Adhikari expressed deep concern:

“The government’s policy to establish its own software development company to independently build software for state offices worries me deeply. If this policy is implemented over the long term, it risks completely dismantling the domestic software industry and the entire IT ecosystem.”

According to Adhikari, the primary mandate of a sovereign state is not to act as a commercial vendor or directly compete with private enterprises. Instead, the government’s true responsibility lies in crafting a nurturing ecosystem where homegrown software firms can build up their capacities, foster research and innovation (R&D), and successfully scale up to compete in the global marketplace.

Global Precedents: Learning from Estonia, Singapore, and India

Drawing from the history of successful digital economies, the CAN Federation leader pointed out that no country has ever achieved digital prosperity by keeping technology development exclusively within state walls.

Global digital frontrunners like Estonia, Singapore, and India have dramatically modernized their governance systems precisely by empowering their private technology sectors.

Highlighting the policies adopted by these tech giants, Adhikari listed the following global best practices:

Strategic Collaboration: Opting to partner extensively with private companies rather than building isolated in-house government solutions.

Transparent Procurement: Relying on open, competitive, and merit-based public bidding processes to acquire high-quality private sector tech.

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Startup Ecosystem Support: Channeling massive state grants, subsidies, and incentives into private Research and Development (R&D) and tech startups.

Tech Export Promotion: Deploying diplomatic and economic state machinery to help domestic tech businesses export their software solutions globally.

This robust Public-Private Partnership (PPP) model is precisely why the IT industries in India, Estonia, and Singapore have grown into multi-billion-dollar global powerhouses.

The Threat of Accelerated ‘Brain Drain’ and Stifled Innovation

The CAN Federation firmly believes that if state machineries begin developing major applications entirely in-house, Nepal’s domestic tech marketplace will shrink dramatically. Denied access to public projects, private software vendors will lose critical opportunities to showcase their engineering capabilities, invest in emerging next-gen tech, or scale their business operations beyond borders.

The economic fallout will hit job creation and talent retention first. When local tech companies are excluded from prestigious national projects, they cannot sustain competitive compensation models for top-tier professionals. Consequently, this policy shift risks accelerating a massive wave of brain drain, driving Nepal’s best software developers, data scientists, and cybersecurity experts to seek greener pastures abroad.

The Way Forward: Chiranjibi Adhikari’s Strategic Roadmap

“In my view, the government should not compete with the private sector; it should adopt policies that empower it,” Adhikari asserted. To transform Nepal into a genuine regional IT hub, he proposed a three-pronged roadmap for policymakers:

Transparent and Accountable Procurement: Government projects must prioritize fair competition, highly transparent public procurement mechanisms, and strict technical benchmarks, allowing local private firms to earn contract commissions based solely on merit.

Strategic Public-Private Partnerships (PPP): The core development, deployment, and operational handling of software should be outsourced to private enterprises, while the state retains stringent control over data sovereignty, strict cybersecurity audits, and overall regulatory compliance.

Viewing the Rs. 20 Billion Market as an Investment: The government should view its Rs. 20 billion procurement pool not as a cost center, but as a direct investment into the capabilities of domestic tech. Local companies require a robust portfolio of domestic “case studies” before they can confidently bid for and win multi-million-dollar international tenders.

Conclusion: Prioritizing Long-Term National Interest

Ultimately, as CAN Federation Acting President Chiranjibi Adhikari rightly points out, this is not merely a debate over an isolated government software facility; it is a profound policy decision that will outline Nepal’s entire digital future.

Before rushing into such long-term structural shifts, the government must engage in rigorous, comprehensive consultations with private tech operators, industry watchdogs like the CAN Federation, academic institutions, and digital security experts.

Aligning this policy with long-term national growth, high-value youth employment, and technology exports is critical to ensuring a prosperous, self-sustaining digital economy.

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