Nepal vs India vs the Philippines for software outsourcing

India has the most vendors, the most specialists and the widest spread of price and quality. If you need a large team or a rare skill, start there.

The Philippines shares most of the working day with Singapore and eastern Australia. In the two benchmarks we checked, its freelance rates are close to India's.

Nepal is the small option. Published salaries are lower than India's, its clock is 15 minutes from India's, and its vendors are mostly small studios. That suits a buyer who wants a small team and does not need a hundred engineers.

None of the three shares a normal working day with the United States. That is covered below.

Salaries are not vendor prices. A vendor's rate adds office, management, tax and margin. But the salary sets the floor, and it is the one number with public data in all three countries.

We found no official salary series for software developers in Nepal. The figures below come from a Nepal job portal and from Payscale, which has only 41 Nepal profiles. Treat them as a range, not a fact.

For scale: Indeed puts the average US software engineer salary at US$136,126 a year. The UK's Office for National Statistics gives a full-time median of £59,862.50 for programmers and software development professionals (2026 provisional).

Two published rate tables cover India and the Philippines. Neither covers Nepal. Arc calls its own ranges directional market benchmarks, not rigid pricing rules, and the same caution applies to both tables.

For comparison, Arc puts senior freelance rates at US$95-150 an hour in the US and US$78-125 in the UK.

We found no Nepal rate benchmark we could verify, so we do not quote one. The salary data suggest Nepal's floor is below India's. Whether that shows up on your invoice depends on the vendor. Ask vendors in all three countries for written quotes on the same scope.

Nepal is UTC+5:45, India UTC+5:30 and the Philippines UTC+8. None of the three uses daylight saving, so the gap moves only when your own clocks change: the UK from late March to late October, the US from March to November, and Sydney from October to April.

The table assumes a 9 am to 6 pm day on both sides and counts the hours that fall inside both.

Nepal and India are 15 minutes apart, so for a buyer they run on the same clock. Both suit the UK and Europe. The Philippines suits Singapore and Australia, and shares little time with London.

For the US, the answer is the same for all three. At 9 am in New York in winter it is 7:45 pm in Kathmandu, 7:30 pm in India and 10 pm in Manila. During US summer time each is an hour earlier. US work from any of them means either an evening shift on the vendor side or a written handoff each day. Ask which one you are paying for.

English is the working language of software in all three countries: code, tickets, documentation and most technical education. We found no source that tests developers' English across the three countries in the same way, so we do not rank them.

Run the interview in English, ask the engineer to explain a past decision in writing, and judge from that.

Nepal's IT industry is small. An industry estimate reported by The Kathmandu Post in February 2026 puts employment at about 100,000. A 2022 survey by the Institute for Integrated Development Studies (IIDS) estimated more than 70,000.

The same IIDS study put Nepal's IT service exports at about US$515 million in 2022, up 64.2% from US$313 million in 2021. The industry association NAS-IT estimates about US$1 billion for 2025, though no survey has published that figure yet. The official trade figure is far lower: NPR 22.33 billion for telecom, computer and information services in 2024-25. NAS-IT says many IT payments arrive labelled as remittance, so the central bank cannot tell them apart from money sent home by individuals.

We did not find a verified headcount for India or the Philippines, so we give none. Both are larger than Nepal, and India is larger by a wide margin.

India has the deepest bench: global service firms, mid-size agencies and small studios, across almost every stack. The Philippines is also well established. More choice helps, but it also means more filtering. The team in the sales call is not always the team on your project, so ask to meet the engineers.

Nepal has fewer vendors, and most are small and mid-size studios. Common web, mobile and cloud stacks are easy to staff. A niche stack may not be, so check before you assume.

The case for Nepal is narrow. You get small teams, an owner who is often on the calls, and a clock that suits the UK and Singapore. Some Nepal vendors also claim lower staff turnover. We found no published data that compares attrition across the three countries, so we do not make that claim.

Policy is moving in the sector's favour. According to B360 Nepal, Nepal's 2026-27 budget announced a 50% income tax exemption on IT service export income.

Every offshore engagement carries the same basic risks: unclear scope, code you do not control and a key person leaving. The risks below are specific to each country.

• Nepal, market size: if your vendor folds, fewer firms can take over. Keep the code in your own repositories and the hosting in your own cloud account from day one.
• Nepal, key people: in a small team, one departure matters more. Ask who covers leave and how work is documented.
• Nepal, infrastructure: ask about backup power, a second internet link, and what happens to a deadline during an outage.
• Nepal, payments: pay a registered company against an invoice, into a bank account in the company's name. Paying an individual through an informal channel leaves you without a contract.
• India: with so many vendors, quality varies widely. Check references and the named team, not the brochure.
• Philippines: one to two shared hours with the UK. A UK team will rely mostly on written handoffs.
• All three: none shares a normal working day with the US.

We use words here, not scores out of ten. The data above does not support finer grades.

Most buyers should compare vendors, not countries. These are the cases where the country does decide it.

• India, when you need 20 or more engineers, a specialist skill, or a wide field of vendors to compare.
• The Philippines, when your team is in Singapore or eastern Australia and you want to work live for most of the day.
• Nepal, when you want a small team, a lower salary base and 3h 15m to 4h 15m of shared time with London or 3h 45m to 4h 45m with Sydney, and you can accept a smaller market.
• For US buyers, any of the three. Choose on quality and price, and plan for written handoffs or a paid evening shift.

Lattice Nepal Pvt. Ltd. is a software studio founded in 2020, with offices in Kathmandu and Bharatpur. We work on UTC+5:45 all year. We build in Next.js, React, FastAPI and Python, ship Flutter and Android apps, and run hosting on AWS, Cloudflare and cPanel/LiteSpeed. We have delivered 200+ projects for 15+ clients, including PTE Nepal, the PTE Sprint Android app and Ayriva, and we run our own product, Restro.

We are the small option described above. If you need fifty engineers next month, India is the better fit, and we will tell you so.