Call for institutional arrangements for integrated development of textile and clothing sector

Despite the importance of Nepal’s textile and clothing sector to exports and employment, longstanding institutional gaps and fragmented support have prompted calls for a dedicated body to consolidate the sector’s collective voice and strengthen coordination and support, according to entrepreneurs.
Speaking at a policy dialogue ‘Institutional arrangements for integrated development of textile and clothing sector’ organised by South Asia Watch on Trade Economic and Environment (SAWTEE), with support from the International Labour Organisation (ILO), they called an urgent need for such an institutional arrangement to build shared understanding among stakeholders.
In her trigger presentation, Programme Coordinator at SAWTEE Dikshya Singh, highlighted that Nepal's textile and clothing sub-sectors; ranging from yarn and fibre to garments, carpets, pashmina, silk, hemp, and allo; are represented by a patchwork of scattered, sub-sector-specific associations, with none speaking for the value chain as a whole. "Hence, there is a need for an institution that can unite this fragmented advocacy into a single institutional voice," she said, adding "Such an entity would coordinate backward linkages (sourcing inputs domestically) with forward linkages in manufacturing, branding, and market access, treating the sector as a unified value chain rather than disconnected sub-sectors."
Calls to establish such a body have grown louder in recent months since the plan received a positive response from the Prime Minister, as reported in the media following his meeting with the textile and clothing sector entrepreneurs.
President of Nepal Carpet Manufacturers and Exporters’ Association Balaram Gurung, on the occasion, highlighted the important role previously played by the Nepal Carpet and Wool Development Board in providing focused institutional support to the carpet sector. He also noted that the Board’s functions were later merged with the Trade and Export Promotion Centre (TEPC), leaving the sector without a dedicated institution. Drawing on this experience, he stressed that the proposed body should provide similar sector-specific support, or the former Board should be reinstated.
Likewise president of the Nepal Pashmina Industries Association Dhan Prasad Lamichhane stressed the need to develop an integrated pashmina ecosystem spanning the entire value chain, from farm to fibre to fashion, with stronger linkages across sheep rearing, fibre production, dyeing, knitting and garment manufacturing. He emphasised the need for legislative changes required to facilitate commercial farming of sheep in mountainous regions of Nepal, which could help domestic sourcing of wool.
Immediate Past President of the Nepal Wool Felt Producers and Exporters Association Amrit Khadka emphasised the need to establish such institutional body through a parliamentary Act. He also identified policy and regulatory gaps as a major concern, noting that the sector has been requesting amendments to existing policies and regulations for a long time, but that the process has yet to move forward. He further stressed the need for greater representation of both the public and private sectors in efforts to develop the felt industry.
First Vice President of the Garment Association of Nepal Basanta Raj Adhikari pointed out that compared to the competitors, Nepali product is expensive, lower in quality, and slower on delivery; hence, Nepal lacks the capacity to fulfil bulk orders from large buyers. He said unless skill shortages and testing infrastructure gaps are addressed, Nepal's garment sector will remain confined to small, niche orders.
Similarly, Textile Expert Prakash Jha called for the establishment of a council to consolidate and represent the voices of stakeholders across the textile and clothing sectors. He suggested that the proposed council could be placed under the Ministry of Industry, Commerce and Supplies, with participation from the Ministries of Agriculture, Forests and Environment; Finance; and Labour, as well as representatives of industry associations, businesses and technical experts.
He further suggested that the council should develop mechanisms to achieve financial sustainability, including through fees related to rules of origin, certificates of origin and membership. He proposed that the council’s mandate should also cover research and regulation of imported clothing, monitoring of free trade agreements and other trade agreements, and recommending measures for export market diversification.
Chief Executive Officer of Alternative Technology Shreeniwas Sharma highlighted, "how Galaicha software has improved Nepal’s carpet industry by facilitating digital design, cost calculation and production tracking. He noted that similar technological solutions could be adopted across other subsectors, including handicrafts and garments, while emphasising the need to combine technology adoption with laobur upskilling. He suggested that the proposed institution could help connect industries with appropriate technology providers and facilitate wider adoption of such solutions. He stressed that Nepal has the technological capacity to do more, but stronger industry–technology linkages are needed to translate these capabilities into practical outcomes.
Participants, on the occasion, pointed out that the proposed institution's mandate and governance structure required careful design. Several stressed the need for clarity on whether the body's primary role should be coordination or promotion, and called for trade union representation, noting unions could contribute to improving worker productivity rather than being seen as adversarial to business. Others stressed that the council needed meaningful private-sector representation and real decision-making authority, cautioning against it becoming 'another bureaucratic institution' burdened by administrative hurdles. It was also suggested that leadership rotate across sub-sectors like garments, carpets, and felt to ensure balanced representation, alongside inclusion of researchers, experts, and government representatives.
One participant called for an apex body under the Government of Nepal, citing India's model, with sub-committees for each sub-sector to prevent domination by any single industry.
Chair of the session Dr Posh Raj Pandey summarised the key points of the discussion, highlighting the need to address supply-side constraints and strengthen institutional coordination in the textile and clothing sector. He stressed the importance of a stronger governance mechanism to consolidate fragmented institutions, support export promotion and regulatory compliance, and prepare the sector for challenges arising from preference erosion after LDC graduation.