Governments Should Build Platforms, Not Companies: The Looming Threat of a State-Owned IT Company to Digital Nepal

16th June 2026, Kathmandu

Finance Minister Dr. Swarnim Wagle’s recent announcement to establish a state-owned IT company under the Prime Minister’s Office, alongside the development of a secure government messaging platform, has sparked intense and critical debate across Nepal’s technology sector.

Governments Should Build Platforms

The government maintains that this move aims to centralize public software projects, fortify cybersecurity, eliminate duplication, and streamline the state’s digital transformation.

While the underlying intentions may sound constructive, a fundamental question arises: Is it practical or healthy for the state to step in as a commercial competitor in a market where a vibrant private sector and innovative startups are already thriving?

To unpack this policy shift, Chiranjibi Adhikari, Acting President of the Computer Association of Nepal Federation (CAN Federation), ICT Policy Coordinator, and prominent cybersecurity expert, shares his industry insights and strategic analysis on why this move could hinder rather than help Nepal’s digital ecosystem.

Governments Should Facilitate, Not Compete

From the perspective of an ICT industry leader and tech advocate, the principle is clear: “The government’s role is to cultivate a progressive policy ecosystem that enables business, not to become a business itself.”

When the state establishes its own tech enterprise to compete directly in the open market, it inadvertently undercuts local software companies and emerging startups that have invested heavily in building local capacity. Backed by public funding, administrative privilege, and state protection, a government-owned company naturally distorts healthy market competition.

Historical precedents consistently show that whenever the state enters commercial operations, market-driven innovation slows down, bureaucracy creeps in, and industry accountability suffers.

Nepal already possesses highly competent tech talents and software firms capable of building world-class digital platforms. The state should leverage this domestic capacity rather than attempting to displace or replicate it.

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The Imperative for Public-Private Partnership (PPP)

The vision of a truly ‘Digital Nepal’ cannot be achieved by bypassing the private sector or engineering a state-led monopoly. Building a secure, dynamic, and resilient digital ecosystem requires a robust Public-Private Partnership (PPP) model. Instead of developing software in-house, the government should focus on setting rigorous procurement standards to source cutting-edge, secure technologies from local enterprises.

To steer this debate toward sustainable economic growth, the industry suggests focusing on three foundational pillars:

Establishing National Standards: The government must focus its efforts on defining strict regulatory and quality parameters, such as a comprehensive ‘National Minimum Security Standard,’ to ensure that all public platforms meet high cybersecurity benchmarks.

Transparent Procurement & Secure Infrastructure: Reforming the bureaucratic bottlenecks within the Public Procurement Act is essential to make government tech sourcing agile, fast, and transparent. Furthermore, the state should prioritize establishing secure, sovereign national infrastructure (like data centers) rather than building end-user applications.

Prioritizing Domestic Innovation (Nepal-Made Software): Giving preference to local IT products and offering policy incentives to homegrown startups is crucial. This not only builds a sustainable domestic ecosystem but also helps Nepalese tech brands scale globally.

Conclusion: A Clearer Roadmap for Digital Nepal

Launching a state-owned tech corporation under the banner of digital transformation risks alienating the very industry driving Nepal’s digital economy. The government must step back from being a marketplace competitor and step up as an institutional facilitator.

True digital transformation occurs when the state leads with forward-thinking policy frameworks and relies on the competitive ingenuity of the private tech sector for execution. The foundation of ‘Digital Nepal’ belongs in the hands of its startups and software creators, not inside a state-owned enterprise.

For more: Governments Should Build Platforms