The imminent graduation of Nepal from the Least Developed Country (LDC) status is casting a long shadow over the nation’s ready-made garment industry. Pashupati Dev Pandey, President of the Garment Association Nepal (GAN), has sounded a dire alarm, stating that the sector is bracing for a profound crisis that could displace approximately 132,000 workers within the next five years. This displacement is expected to hit low-income earners and those with limited educational backgrounds the hardest, as the loss of preferential trade benefits threatens global competitiveness.
During a recent interaction titled "Export Promotion of Ready-made Garments after LDC Graduation: Challenges and Opportunities," Pandey highlighted a persistent disconnect between industry needs and government action. Despite years of lobbying for the establishment of a "Green Garment Village" and a dedicated "Textile and Ready-made Garment Council," these proposals remain stalled in ministerial bureaucracy. The association expressed frustration that while they represent a significant portion of third-country exports, the legal framework governing them dates back to 1964, a law they argue is obsolete in today's high-cost, competitive global market.
The human and economic impact could be mitigated if the government addresses the 1,285 sick garment industries currently lying dormant. According to GAN, revitalizing these units through a strategic action plan and subsidized financing could immediately generate over 50,000 new jobs. However, current progress has been hampered by administrative delays, including the recent dissolution of the Cotton Development Board and the failure of a government committee to finalize recovery plans following recent political shifts.
A significant hurdle remains the lack of preparation for "double transformation" rules required after LDC graduation. While Pandey welcomed the government's recent mandate for employees to wear domestically produced clothing—a move expected to provide relief during off-peak seasons—he criticized the exclusion of entrepreneurs from drafting new export incentive procedures. The industry is now calling for a radical overhaul of investment policies and structural reforms to ensure that the vision of "farm to fiber, fabric to fashion, and fashion to export" does not vanish as the country climbs the economic ladder.
