Nepal's Garment Industry Faces Existential Crisis Post-LDC Graduation, Industry Chief Warns

Kathmandu. Pashupati Dev Pandey, President of the Nepal Garment Association, has warned that Nepal's garment sector faces a major crisis following the country's graduation from the Least Developed Country (LDC) status.  

Speaking at an interaction program titled 'Challenges and Opportunities for Garment Export After LDC Graduation' organized by the Nepal Garment Association, President Pandey expressed his concerns. He warned that this transition could lead to the loss of approximately 132,000 jobs.

Presenting data, President Pandey stated that within the next 5 years, workers with low income and limited access to education will be particularly affected. He lamented that despite years of demanding the establishment of a 'Green Garment Village' and a 'Textile and Garment Council' from the government for the sustainable development of the sector, these requests remain unfulfilled. Pandey claimed that if the approximately 1,285 sick garment industries in the country were revived, more than 50,000 people could immediately find employment.

 He highlighted the need for an action plan, access to concessional financing, and policy reforms to rehabilitate sick industries. Although the association has set the objective of 'Farm to Fiber, Fiber to Fabric, Fabric to Fashion, and Fashion to Export' in its statute, he noted that it is shrinking due to a lack of government support. He mentioned that industrialists are concerned about the abolition of the Cotton Development Board and the lack of preparation for the 'double transformation' required after LDC graduation. 

Welcoming the government's recent decision to mandate domestic clothing for government employees, Pandey expressed his belief that this would provide relief to industries even during the 'off-season.' However, he expressed dissatisfaction that businesses were not consulted when drafting the new export promotion procedures and that only minimal funds are allocated when budget requests are made. President Pandey drew attention to the need for legal reforms, stating that the outdated 2021 BS law cannot sustain current market competition.