Nepal has introduced its first - ever Artificial Intelligence (AI) Policy, signaling the government’s recognition of AI as a transformative force in governance, economy, and society. The policy, endorsed after months of inter - ministerial consultations, aims to foster innovation, regulate ethical use, attract foreign investment, and integrate AI into national development frameworks. The Ministry of Communication and Information Technology has endorsed the National AI Policy to promote better understanding and effective implementation of artificial intelligence in Nepal.

While the policy outlines ambitious objectives, experts warn that the government faces major hurdles in implementation, including lack of infrastructure, weak institutional capacity, cyber risks, and potential misuse of AI by private and political actors.

Main Objectives of the AI Policy

The AI Policy sets out a broad vision of making Nepal a competitive player in the global digital economy by:

Promoting innovation and research in AI - encouraging universities, research institutions, and startups to develop localized AI solutions.

Ensuring ethical and responsible use of AI - addressing bias, misinformation, and human rights concerns in AI applications.

Integrating AI into national development priorities - from healthcare, agriculture, education, and disaster management to smart city development.

Attracting foreign investment and technology transfer - positioning Nepal as a future hub for responsible AI - driven industries.

Developing human capital - investing in skills, training, and education to create an AI - ready workforce.

Officials argue that the policy is not just about technology but about social transformation, linking AI adoption to employment generation, governance efficiency, and inclusive growth.

Key Provisions of the Policy

The policy contains three core provisions that frame its implementation:

Regulation and Governance: Establishment of an AI Regulatory Council to oversee ethical use, data governance, and compliance with international standards. This includes frameworks to monitor misuse in surveillance, misinformation campaigns, and electoral manipulation.

Infrastructure and Ecosystem Development: Commitment to creating AI research labs, cloud computing capacity, and data centers to support innovation. The government pledges to strengthen broadband networks and ensure affordable digital access across the country.

Private Sector and Startups: Incentives such as tax benefits, research grants, and public - private partnerships to boost AI startups. The policy recognizes that without industry participation, innovation will remain limited to paper strategies.

Implementation Strategy

The government’s strategy is phased and multi - dimensional:

- Short - term (1-3 years): Establish legal frameworks, set up regulatory bodies, and pilot AI solutions in public service delivery (citizen portals, digital payments, and e - governance).

- Medium - term (4-6 years): Expand AI integration into healthcare (diagnostics, telemedicine), education (personalized learning), and agriculture (precision farming, weather prediction).

- Long - term (7-10 years): Position Nepal as an AI innovation hub in South Asia through large - scale adoption, international partnerships, and integration of AI into exports and FDI - driven industries.

- The government has stressed that capacity building and awareness will remain central, noting that many policymakers and bureaucrats themselves lack adequate understanding of AI’s scope and risks.

Challenges and Risks Highlighted

Despite its optimism, the policy candidly acknowledges multiple risks and challenges:

Digital Divide: Rural Nepal continues to suffer from poor internet access, which could exacerbate inequality if AI benefits remain urban - centric.

Cybersecurity Threats: AI could magnify risks of hacking, fraud, and misuse of personal data. Nepal lacks strong cyber defense systems.

Ethical Dilemmas: The possibility of AI reinforcing social biases, spreading misinformation, or being deployed for mass surveillance is a major concern.

Institutional Weakness: Past failures of ICT policies raise doubts about implementation. Coordination among ministries remains weak.

Brain Drain: Trained AI experts are likely to migrate abroad unless Nepal creates competitive opportunities domestically.

Experts warn that unless these risks are addressed, the policy could remain aspirational rhetoric, similar to past digital strategies that failed to deliver results.

International Alignment

The policy attempts to align Nepal with global best practices by:

- Referencing UNESCO’s ethical AI guidelines.

- Adapting frameworks from countries like India, South Korea, and the EU where AI regulation balances innovation with accountability.

- Stressing regional cooperation in South Asia to address cross - border AI risks such as misinformation, digital trade, and cybersecurity.

However, Nepal lacks the institutional depth and resources of these countries, raising questions about whether borrowing frameworks without localized adaptation will be effective.

Political and Economic Context

The AI Policy comes at a time when Nepal’s digital economy is struggling to attract large - scale foreign direct investment (FDI). Political instability, inconsistent regulation, and weak infrastructure have already deterred global tech firms from entering the market.

Observers believe the policy is partly aimed at restoring investor confidence. By promising transparent rules and innovation incentives, the government hopes to attract AI - driven industries in outsourcing, fintech, and digital services.

Yet, skepticism persists. Critics argue that Nepal’s bureaucracy has a track record of overpromising and underdelivering on technology projects, citing the slow pace of the Digital Nepal Framework and cyber law reforms.

Expert Reactions

Digital policy experts have welcomed the policy as a necessary step but warned against rushing into AI adoption without safeguards.

“AI can be a game - changer for Nepal’s healthcare and agriculture, but without strict ethical controls, it risks becoming another tool of exploitation and inequality,” said a Kathmandu - based ICT researcher.

Private sector representatives expressed hope that tax incentives and startup - friendly provisions will open opportunities, but also demanded clarity in intellectual property rights and data - sharing rules.

Civil society groups remain cautious, warning that vague provisions on surveillance could allow political misuse during elections.

Way Forward

- The policy’s success will depend on:

- Transparent governance of the proposed AI Council.

- Strict enforcement of ethical guidelines in both government and private sector use.

- Investment in digital infrastructure beyond Kathmandu to ensure inclusivity.

- International partnerships that go beyond borrowing templates and focus on Nepal - specific needs.

For now, the AI Policy signals ambition but raises as many questions as it answers. If implemented effectively, it could reshape Nepal’s development trajectory and reduce dependency on traditional sectors. But if mishandled, it risks becoming another missed opportunity in the country’s long list of unfulfilled digital promises.