Nepal has ranked 19th globally in outsourcing competitiveness, driven by low labour costs and strong English proficiency, according to the Global Outsourcing Talent Index 2026 published by Ataraxis Management.

The report placed Nepal ahead of 174 out of 193 countries surveyed, positioning the Himalayan nation among the world’s top outsourcing destinations. Nepal scored 79.65 points overall based on factors including labour cost, English proficiency, talent availability, digital infrastructure and business stability.

According to the report, Nepal’s biggest strength was labor cost competitiveness, where it scored 96 out of 100 points matching India and outperforming several advanced economies, including the United States, Germany and United Kingdom.

The report described Nepal as a “hidden gem” for businesses seeking affordable outsourcing options beyond traditional markets such as India and the Philippines.

According to The Kathmandu Post, industry representatives in Nepal said policy instability, unclear tax regulations, and the absence of updated data protection laws continue to hinder the country’s ambitions to expand its information technology sector.

Deepen Chapagain, vice-president of the Nepal Association for Software and IT Services Companies, said Nepal risks losing competitiveness to countries offering stronger tax incentives and institutional support for IT outsourcing.

The report also highlighted Nepal’s youthful and increasingly tech-savvy workforce as a major advantage. It noted that engineering and IT education in Nepal is largely conducted in English, helping graduates integrate into global teams more easily.

According to the report, Nepal exported IT services worth $515 million in 2023, citing data from the Institute for Integrated Development Studies.

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