Invest In Information Technology

Nepal - The Hidden Gem for Indian IT Offshoring

As the Indian IT industry matures, top companies are exploring new offshoring locations beyond the usual suspects. In this pursuit of less crowded yet capable delivery destinations, Nepal is emerging as an attractive prospect. Let’s explore why Nepal should be on the radar of Indian IT firms. While not the first name that springs to mind, Nepal presents a unique value proposition. The country has a flourishing IT talent pool fed by 17,000+ engineering graduates every year. With a youthful population, Nepal’s tech workforce can support projects across the IT lifecycle.

Moreover, Nepal offers compelling cost efficiencies. IT salaries average just $5,000-10,000 per annum making the country very competitive from a pricing perspective. This cost arbitrage is coupled with geographic proximity and cultural alignment with India to facilitate seamless offshoring. Leading Indian IT players are already making inroads into Nepal. Infosys has a development center employing over 200 Nepali engineers, while TCS inaugurated a major facility in 2015. Encouraged by early success, firms like Tech Mahindra are evaluating Nepal as an offshoring base too.

Beyond talent and cost, policy support is another enabler. To promote IT/ITES exports, Nepal provides income tax exemptions and infrastructure perks. It also allows 100% foreign ownership in IT offshoring ventures to attract FDI. Such incentives further sweeten the value proposition.That said, Nepal is still developing its offshoring ecosystem. IT parks, international bandwidth, and reliable power – key enablers need to be ramped up. However given the growth trajectory, Nepal offers first-mover advantages for Indian companies willing to invest early and cultivate local capabilities.

Overcoming Challenges through Partnerships:

While Nepal has significant potential as an offshoring location, it still faces some infrastructure and ecosystem challenges. Indian IT firms can proactively address these by collaborating with local industry bodies and the Nepal government.

For instance, partnerships around training programs can help upskill the Nepali IT workforce on global best practices and emerging technologies. Joint initiatives in areas like cybersecurity and data privacy can instill confidence among global clients.

Indian firms with mature delivery models can also lend their expertise in areas like quality assurance, people management, and operational excellence. This will allow quicker maturing of Nepal’s offshoring capabilities in line with international standards.

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The Road Ahead:

Nepal’s IT offshoring story may be at an incipient stage, but the country clearly presents an attractive long-term opportunity for Indian firms. Its unique strengths combined with a proactive ecosystem development approach can enable Nepal to carve out a strong niche in the global offshoring market.

As digital innovation accelerates, offshoring is poised for continued growth with a greater premium on agility and cost efficiency. Indian IT companies that recognize Nepal’s advantages early can build sustainable competitive differentiation through their Nepal operations. 

By factoring Nepal into their global delivery strategies and investing in local partnerships, Indian technology firms can unearth this Himalayan gem. In doing so, they can secure a win-win that powers their growth as well as the emergence of a new regional IT/ITES force to be reckoned with. Read More

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