The government has approved the artificial intelligence (AI) policy, with the goal of creating an enabling environment for AI development, expansion, and safe use. The policy establishes institutional, legal, and regulatory frameworks for AI governance while ensuring its ethical, transparent, and inclusive use across all sectors.

The Cabinet meeting on Monday approved the National AI Policy, 2025, drafted and submitted by the Ministry of Communication and Information Technology. According to the draft, the policy focuses on developing human resources with the necessary skills to work with AI and promoting innovation, research, and development in the field.

The policy also seeks to protect citizens’ rights, privacy, and security in using AI while encouraging public-private partnerships in the sector.

Experts have welcomed the move, noting that the first dedicated AI policy comes at a time when AI is increasingly getting integrated into daily life, work, and business.

Chiranjibi Adhikari, senior vice president of the Computer Association of Nepal, said that as AI adoption grows, the government has finally introduced a policy that will guide the secure, effective, and long-term use of AI across sectors and contribute to the economy.

Adhikari, also CEO of One Cover, a cybersecurity company, highlighted that the policy addresses ethical AI, AI-related fraud and misuse, and its potential impacts on national security—highly relevant issues today.

“However, implementation is crucial. Unless the private sector is actively involved, the policy may not have the desired impact,” he added.

Experts also emphasised the need to promote open AI research and development to create a sustainable impact, as technology evolves. Beyond the AI policy, they said, removing other legal and ethical hurdles, such as tax-related policies, could help bring in foreign investment in the sector.

The association noted that AI in Nepal is most widely used in the financial sector, followed by education and health. Under the policy, the government plans to make laws and standards for a secure and sustainable AI ecosystem and an organisational structure for research, development, regulation, promotion, and use of AI.

Aadesh Khadka, joint secretary of the Information Technology Division at the Ministry of Communication and Information Technology, said the policy includes provisions for review every two years, given AI’s fast-changing nature. It also envisions introducing new laws, standards, and institutions for AI governance.

Khadka said the policy aims to support the growing Nepali IT industry, enabling companies to provide AI services in the international market. It emphasises skill development from school to university levels and raises general awareness at the local level. It also encourages the use of AI in public service delivery, including sectors like agriculture, health, and other services.

The policy includes risk management strategies to address threats created by AI tools such as deepfakes. It also focuses on supporting startup businesses with guidelines that help implement innovative ideas to address social and business challenges.

On infrastructure, the policy guides the opening of data centres, leveraging the cold temperatures in Himalayan regions. “Though the policy does not yet designate a focal point for reporting issues, we expect relevant laws to be formulated to address this,” said Khadka.

Other strategies include ensuring access to data through secure collection and management for AI development and use. The policy promotes research and development programs, particularly those focused on innovation and entrepreneurship in AI-related goods and services. It also includes provisions for investment promotion and financial facilitation for AI-driven businesses.

Likewise, the policy envisions growth in AI applications across IT, health, education, energy, transportation, tourism, and industry. The AI ecosystem will include the development of standards for data, algorithms, transparency, and accountability to ensure safe and effective use.

Standards will also be developed for importing and exporting AI-related goods and for intellectual property protection in AI applications. The policy emphasises the management of AI-generated information that may be risky, false, or misleading, alongside laws for data protection and confidentiality for individuals and organisations.

Similarly, the policy outlines the creation of a National AI Index. For digital infrastructure, it emphasises expanding high-speed internet using technologies such as 5G and optical fibre to support AI development and use. International-level data centres and cloud infrastructure will be built to facilitate AI initiatives.

The government will establish an AI Regulation Council, chaired by the communications minister and including secretaries from various ministries, to develop standards and regulations.

A National AI Centre will also be set up under the communication ministry to manage and facilitate AI development in Nepal.