GAN, Solidaridad Asia sign MoU to sustain garment sector in Nepal

Kathmandu, May 27

As Nepal is seeking to diversify its exports, move up the value chain, and secure better market access while it is set to graduate from the Least Developed Country (LDC) status and is in need to comply with EU’s Corporate Sustainable Due Diligence Directive and other international frameworks, the Garment Association of Nepal (GAN) has launched an initiative to promote sustainability in the sector in partnership with Solidaridad Asia.

The two organisations have expressed their commitments to jointly launch initiatives in the circular economy, particularly focusing on decarbonisation within the Textile and Readymade Garments (RMG) Industry, optimising water usage, and reducing chemical reliance.

With the same objectives, a workshop on 'promoting sustainability in Nepal's textile and readymade garments sector' was organised jointly by Solidaridad Asia and GAN in Kathmandu on Tuesday.

President of GAN, Pashupati Dev Pandey, said that Nepali garment products need greater advocacy and positioning at the national and international markets.

"We also need to diversify our production and exports both to maintain sustainability in the industry in the long-run," he said.

"By focusing on capacity building, compliance support, access to technology, and knowledge sharing, this partnership will help bridge existing gaps and empower our industry to thrive in an increasingly competitive and sustainability-driven global market," he added.

Stating that Nepali producers believe in their natural strengths in ethical manufacturing, handicraft skills, natural materials, and environmental stewardship which position them to excel and remain competitive, Pandey said that Nepal's garment industry should not only adapt to rapidly evolving global apparel landscape but also lead.

The GAN and Solidaridad Asia had signed a Memorandum of Understanding (MoU) in December last year to collaborate in the sustainability initiatives of Nepali garment sector.

According to GAN, the MoU reflected their shared vision of transforming Nepal’s RMG sector to meet the emerging global due-diligence requirements, especially those laid out by the European Union and other key markets.

Shatadru Chattopadhayay, Managing Director of Solidaridad Asia, said that it is necessary for textile and RMG to reduce energy consumption, chemicals use in dyeing, and carbon emission.

Market landscape has changed significantly. Now the producers have to reduce the cost of production while keeping the quality aspects intact and pay attention to the conservation of environment, he said.

Speaking on the occasion, Vice-President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Hem Raj Dhakal, said that the government of Nepal and producers should concentrate on harnessing the benefits leveraged by the ongoing tariff war in the international markets.

Shahamin Zaman, chair of International Supervisory Board at the Solidaridad Network, said that the successful sustainability initiatives in Sri Lanka and Bangladesh can be replicated in Nepal to promote business growth and development.

According to her, the organisation has successfully helped in reducing the cost of production in those countries. Nepal needs to apply smart solutions in textile and RMG sector to cope up with the challenges that would be created with the country's graduation to the 'developing country' next year.

Chandi Prasad Dhakal, former president of the FNCCI and Vice-Chair of SAARC Chamber of Commerce in Nepal, stressed on greater resiliency in the garment sector. "I hope that this initiative will help to forge greater regional collaboration and create win-win situation for all of us," he said.

Nepal has 500 active textile industries including spinning, weaving, knitting, dyeing and finishing. More than 70-75 per cent of textile and garment trade happens between Nepal and India.

Prakash Jha, Technical Advisor to the GAN, said that Nepali producers should enhance their expertise in the production of traditional garment, and promote 'made in Nepal' products.

However, challenges like high logistics cost while importing and exporting goods including garment and textile products, and smuggling of finished goods are having negative impacts in the business. 

Published in The Rising Nepal daily on 28 May 2025.