Nepal’s income from the export of information technology (IT) service increased by 20.28 percent in the four months of the current fiscal year 2024/25 compared to the earnings in the corresponding period of last FY.

According to the data released by Nepal Rastra Bank (NRB) up to mid-November, there has been an increase in the income from the export of IT services. By the end of mid-November last year, the country had earned a total of Rs 5.56 billion from the export of IT services.

As of mid-November of the current fiscal year, the country earned Rs 6.69 billion from the export of IT services including Rs 1.72 billion from tele-communication, followed by Rs 4.96 billion from computer services and Rs 9.3 from information services.

During the review period, Nepal imported IT services worth Rs 1.19 billion. As a result, the country has a surplus of Rs 5.50 billion from the import and export of IT services. As of mid-November, Nepal imported telecommunication services was Rs 456.8 million, followed by the import of computer services worth Rs 684.1 million and the import of information services worth Rs 52.1 million.

Of late, Nepal has been exporting various software products, apps and other services related to information technology. The demand for Nepal’s IT services in the world market is increasing. The actual income from export of IT services is much more than the income documented in government records as the service providers receive most of their payments through informal channels.

Some individuals have been reportedly keeping the money earned in such a manner abroad. Government authorities suspect that some of this money is being brought into the country through informal channels like hundi. Due to the compliance to pay taxes on top of bureaucratic hurdles, the exporters do not formally report much of their earnings. Additionally, in some cases, these earnings come from personal, informal, or outsourcing sources, making it challenging to bring such income through official channels.

Hence, this kind of money mostly comes informally. The data of the NRB nevertheless shows that the income is increasing.

Earlier, a study conducted by the Institute for Integrated Development Studies (IIDS) showed that Nepal received USD 515 million from IT service exports. The study report mentioned the country receives roughly equal amounts from the exports of IT services through informal and formal means.

The study showed that 66,500 IT personnel living in Nepal are exporting information technology related services to foreign countries. However, it was observed that almost half of the amounts were coming through informal channels rather than formal ones. Stakeholders said that if these amounts could be brought into the formal system, it would significantly contribute to Nepal’s economy.