Govt set to establish textile and clothing development council

Kathmandu, July 21

The government is set to establish a 'Textile and Clothing Development Council' to promote domestic production and Nepali products in the international market. At the direction of Prime Minister Balendra Shah, the proposed council will be established under the Ministry of Industry Commerce and Supplies (MoICS).

During a meeting with the representatives of the Garment Association of Nepal (GAN) at the Prime Minister's Office on Tuesday, he instructed the Minister for Industry, Commerce and Supplies Gauri Kumari to immediately proceed with the establishment of the council.

The PM's direction has come as a response to the demands of the entrepreneurs.

"The government is giving priority to the development and promotion of a quality ready-made garment industry based on domestically produced raw materials," said PM Shah.

The GAN expressed confidence that the proposed council would help promote exports of garments manufactured from locally available raw materials while improving the management of imports.

According to the PMO, PM Shah reaffirmed the government's commitment to providing all necessary facilitation for the growth and expansion of the ready-made garment industry.

In line with the demands raised by the GAN, Prime Minister Shah also directed the MoICS to take immediate steps to revive distressed private-sector garment factories. Likewise, he instructed the relevant authorities to expedite efforts towards concluding free trade agreements (FTAs) and attracting foreign direct investment (FDI).

"He also directed the Ministry of Foreign Affairs to address the obstacles preventing exports of ready-made garments and other products to the United States, particularly the absence of testing and certification facilities, so as to reopen market access," read a statement from the PMO.

PM Shah further pledged to develop the skilled workforce required to realise the objectives of 'Farm to Fibre, Fibre to Fabric, Fabric to Fashion, and Fashion to Export'.

President of the GAN Pashupati Dev Pandey told the PM that although the establishment of a Green Garment Village had been included in the government's policy and programme, no budget had been allocated for its implementation.

In response, Prime Minister Shah urged them to identify a suitable site for the project without delay and assured them that the necessary budget would be provided.

The Point No. 52 of the government's Policy and Programmes for the 2026/27 envisage the establishment of a Green Garment Village at an appropriate location in the vicinity of the Kathmandu Valley.

According the PMO, Prime Minister Shah also recalled that Nepal had previously followed an export-based import system in the early 1980s and encouraged the Association to undertake a fresh study of the practice and recommend appropriate measures for its possible revival.

In 1994/95, Nepal's ready-made garment industry had emerged as the country's leading export-oriented industry, with annual exports reaching approximately US$1.2 billion. However, following the expiry of the Multi-Fibre Agreement (MFA) with the United States in 2005, garment exports declined sharply, resulting in the closure of most factories, substantial investment losses, and the displacement of thousands of workers.

At present, the industry's annual exports have fallen to around Rs. 10 billion, the GAN informed in a statement.

Stressing the importance of Nepal's successful transition from a least developed country (LDC) to a developing country, he said the government was committed to resolving all the challenges facing the ready-made garment industry. He further emphasised that Nepal should develop the capacity to produce domestically the raw materials and other inputs required by the garment sector.

The delegation of the GAN included its President, Pandey, First Vice-President Basant Raj Adhikari, General Secretary Bhim Kumar Giri, CEO Suyash Khanal, and Technical Adviser Prakash Kumar Jha.

The discussion focused on the current state of Nepal's ready-made garment industry, the challenges confronting the sector, measures to promote production and exports, employment generation, and the overall development of the industry.

"The meeting also included detailed discussions on the formation of a high-level National Export Council, to be chaired by the Prime Minister, continuation and expansion of the existing cash export incentive scheme and introduction of Export Credit Insurance," according to the GAN.

Likewise, talks were also centred on the establishment of an internationally standard exhibition and convention centre, creation of an internationally accredited testing laboratory, and promotion of digital trade and cross-border e-commerce.

In its statement, the GAN expressed confidence that with industry-friendly policies, improved infrastructure, enhanced trade facilitation and the effective implementation of export-oriented programmes, the ready-made garment industry could once again become one of the country's leading export sectors.

The meeting is a part of the series of meetings PM Shah is holding with the private sector and stakeholders of business and economy to understand the challenges they face, seek suggestions on solutions and policy reforms, and issue the necessary directives to the relevant authorities for their implementation.

Published in The Rising Nepal daily on 22 July 2026.