Textile stakeholders call for dedicated body to consolidate sector

KATHMANDU: Stakeholders and policy experts in Nepal have called for the establishment of a dedicated body to consolidate the textile and clothing sector, address long-standing institutional gaps, and strengthen coordination across its value chain.

Speaking at a policy dialogue titled ‘Institutional arrangements for integrated development of textile and clothing sector’ in Kathmandu on Tuesday, participants highlighted the necessity of unifying fragmented sub-sector representation into a single institutional voice. The event was organised by South Asia Watch on Trade, Economics and Environment (SAWTEE) with support from the International Labour Organization (ILO). Momentum for the initiative has gathered in recent months following a positive response from the Prime Minister during a meeting with industry entrepreneurs.

Addressing the event, Dikshya Singh, Programme Coordinator at SAWTEE, highlighted that Nepal's sub-sectors — including yarn, garments, carpets, pashmina, silk, hemp, and allo — are represented by scattered, sub-sector-specific associations. She emphasised the need for an entity that would coordinate backward linkages in domestic input sourcing with forward linkages in manufacturing, branding, and market access, treating the sector as an integrated value chain rather than disconnected parts.

To structure the proposed entity, textile expert Prakash Jha suggested setting up a council under the Ministry of Industry, Commerce and Supplies, with representation from the Ministries of Agriculture, Forests and Environment, Finance, and Labour, alongside industry associations, businesses, and technical experts. He suggested the council secure financial sustainability through fees on rules of origin, certificates of origin, and membership, while taking on responsibilities such as research, regulation of imported clothing, monitoring trade agreements, and recommending export diversification measures.

Addressing competitive challenges, Basant Raj Adhikari, First Vice President of the Garment Association of Nepal, stated, "Compared to our competitors, we are expensive, lower in quality, and slower on delivery". He noted that unless skill shortages and testing infrastructure gaps are tackled, the garment sector will remain confined to small, niche orders and lack the capacity to fulfil bulk orders from large buyers.

Sub-sector leaders also detailed specific institutional requirements. Balram Gurung, President of Nepal Carpet Manufacturers and Exporters’ Association, noted the crucial role previously played by the Nepal Carpet and Wool Development Board before its functions were merged into the Trade and Export Promotion Centre (TEPC), urging similar sector-specific support through the proposed body or the reinstatement of the former Board. Stressing the need to develop an integrated pashmina ecosystem spanning farm, fibre, and fashion, Dhan Prasad Lamichhane, President of the Nepal Pashmina Industries Association, called for legislative changes to facilitate commercial sheep farming in mountainous regions to aid domestic wool sourcing. Meanwhile, Amrit Khadka, Immediate Past President of the Nepal Wool Felt Producers and Exporters Association, urged the establishment of the body through a parliamentary Act to resolve policy and regulatory gaps and ensure greater representation from both the public and private sectors.

On technological capability, Shreeniwas Sharma, CEO of Alternative Technology, explained how Galaicha software has improved design, cost calculation, and production tracking in the carpet industry. He suggested adopting similar technological solutions across handicrafts and garments alongside worker upskilling, noting that while Nepal possesses technological capacity, stronger industry–technology linkages are needed to turn these capabilities into practical outcomes.

Participants discussed the mandate and governance structure of the proposed body, weighing whether its primary role should be coordination or promotion. Attendees called for trade union representation to improve worker productivity, meaningful private sector representation with real decision-making power to avoid creating "another bureaucratic institution", and rotating leadership across sub-sectors. A suggestion was also made to adopt an apex body structure under the Government of Nepal, similar to India's model, with dedicated sub-committees for each sub-sector.

Summarising the key points, session chair Posh Raj Pandey highlighted the urgency of addressing supply-side constraints and strengthening institutional coordination. He stressed the importance of a robust governance mechanism to consolidate fragmented institutions, support export promotion and regulatory compliance, and prepare the sector for challenges stemming from preference erosion after Nepal graduates from Least Developed Country (LDC) status.

The event brought together policy-makers, industry association representatives, civil society members, media personnel, and technical experts.