Startups Brace for a Wild Ride: Which Party's Shocking $10 Billion Promise Could Change Everything?

As Nepal gears up for its general elections, political parties are unveiling ambitious proposals aimed at revitalizing the country's startup ecosystem. However, skepticism looms among young entrepreneurs who have witnessed years of policy delays and ineffective implementation. The government initially announced a Rs500 million fund to support startups and innovation in the fiscal year 2015-16, but it took a staggering seven years to finalize the working procedures and begin distributing these funds. Additionally, a clear definition of what constitutes a startup was only established last year.

The period between 2016 and 2019 saw a noticeable growth in Nepal's startup ecosystem, primarily fueled by youth-led initiatives in technology, e-commerce, and digital services. Yet, the sector has faced numerous setbacks due to a lack of clear policy frameworks, limited government support, and external crises, including the 2015 earthquakes, India’s trade embargo, and the Covid-19 pandemic. These challenges have significantly impacted the potential of young entrepreneurs in the country.

In the wake of the pandemic, youth migration from Nepal has surged, with many young men and women leaving for job opportunities and higher education abroad. This trend has drained the domestic startup landscape of its talent and energy, raising concerns about the future sustainability of Nepal's entrepreneurial spirit.

The recent Gen Z-led movement against corruption—sparked by proposed social media bans—has left many young voters hopeful for change as elections approach, yet their optimism is tempered by doubts. They question whether political pledges will materialize into concrete actions. For example, the Rastriya Swatantra Party (RSP), led by former Kathmandu Metropolitan City Mayor Balendra Shah, known as Balen, has promised to remove legal and technical barriers that hinder domestic startups from accessing global markets through international payment gateways. The RSP also aims to eliminate rent-seeking practices and policy corruption, promising to foster a business-friendly environment that encourages innovation and fair competition.

The RSP argues that if Nepal cannot leverage its youth-centric demographic potential for structural economic transformation over the next 10 to 15 years, the country risks falling into a prolonged low-income trap. The party has set national priorities around productivity growth, skill development, capital formation, and technology-based industrialization.

The Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) has also outlined a comprehensive agenda targeting startups. The party envisions simplifying online business operations and providing young entrepreneurs with concessional bank loans up to $10,000 to stimulate startup initiatives. Its initiatives include training and support in Artificial Intelligence, content creation, digital marketing, and app development, with a goal of guiding 100,000 youths toward self-employment. Additionally, the CPN-UML has pledged to ease legal provisions for Nepali entrepreneurs abroad and promote women's entrepreneurship through accessible loans of up to Rs2 million.

The Nepali Congress has proposed creating a “Brain Gain Centre” to connect the skills and knowledge of Nepali youths abroad with nation-building efforts. The party aims to facilitate easier access to capital and technology for returnee migrants wishing to start businesses based on their overseas expertise. They also plan to empower women and youth farmers with appropriate technologies, subsidies, and digital innovation support to promote a sustainable agricultural system.

The Nepali Communist Party, led by Pushpa Kamal Dahal, has similar aspirations, promising to build a network of technically skilled youths who can develop software and applications for international clients. They propose government funding for technical entrepreneurship and initiatives to encourage the establishment of collective or private enterprises by returnees from foreign employment.

Despite these sweeping promises, youth entrepreneurs express concerns that past commitments have often failed to materialize. Juna Mathema, an executive committee member of the Startup and Innovation Forum at the Federation of Nepalese Chambers of Commerce and Industry, noted, “If the manifesto has been prepared through deep research and analysis and the political parties have a clear roadmap to implement it, then we can be hopeful.” However, she emphasized that parties must also focus on supporting and retaining existing startups rather than merely announcing new schemes.

Surakchya Adhikari, an executive committee member at the Nepalese Young Entrepreneurs’ Forum in Kathmandu, added that while some progress has been made, it has not kept pace with the rapidly evolving startup landscape. “There are many problems in implementation,” she said, pointing out instances where bureaucratic inefficiencies hinder entrepreneurs. For example, Adhikari experienced challenges renewing her company registration, despite government regulations stipulating no charges for such processes.

As the political landscape shifts ahead of the elections, the true test will be whether these ambitious promises can translate into tangible benefits for Nepal’s vibrant youth and its burgeoning startup ecosystem. The hope is that the next government prioritizes effective and transparent bureaucratic processes that foster rather than impede entrepreneurial spirit.