Nepal pivots to private-sector tech growth after massive USAID funding cuts

When the Department of Government Efficiency cut USAID’s budget, Nepal lost an estimated $329 million in aid and about 30,000 direct jobs, according to former USAID office director Stuti Basnyet. The cuts ended long-standing educational programs and forced Basnyet to help rebuild services through private-sector initiatives. Nepal, a lower-middle-income nation with a youthful labor force, is now leveraging its “youth bulge” and proximity to India and China to grow a tech ecosystem, exemplified by SecurityPal’s Kathmandu office and the moniker “Silicon Peaks.”

The U.S. embassy continues to support private-sector projects, and American firms such as Coca-Cola and MetLife have expanded operations, boosting employment. The American Chamber of Commerce in Nepal notes its membership grew from 42 to 72, and IT exports reached about $1 billion in 2025, with a target of $20 billion over the next decade. The newly elected government, dominated by leaders under 40, is promoting private-sector partnerships and industrial revitalization to sustain the momentum.