Nepal PM to meet garment sector as export decline deepens

Kathmandu — Prime Minister KP Sharma Oli will hold talks with garment industry representatives as the sector grapples with a sustained export decline, Khabarhub reported.

The meeting addresses a sector that has contracted sharply over two decades. Garment exports, which peaked at NPR 12 billion in 2001-02, have fallen to around NPR 2 billion annually, according to industry figures cited in the report.

The decline coincides with the expiry of Nepal's duty-free access to the US market under a quota system in 2004, which removed a key competitive advantage for Nepali suppliers at a time when Bangladesh, Vietnam and Cambodia were scaling up capacity.

Sector seeks policy response

Industry representatives are expected to raise several demands with the prime minister. These include:

• A stable exchange rate regime to support export competitiveness
• Access to affordable financing for working capital
• Reduced bureaucratic hurdles in customs and trade facilitation
• Support for compliance with international sustainability standards

The garment sector employs an estimated 60,000 workers directly, with a much larger number in dependent supply chain roles, according to industry estimates.

"The sector has potential to grow if the government addresses structural constraints," an industry representative told Khabarhub.

Regional context

Nepal's garment industry faces intense competition from larger regional producers. Bangladesh exported $47 billion in garments in the last fiscal year, while Nepal's total merchandise exports remain below $2 billion across all sectors.

The talks come as global buyers diversify sourcing away from China, creating potential openings for smaller suppliers — but only where they can meet scale, speed and compliance requirements.

For Nepali suppliers, the meeting's outcome will determine whether the sector receives concrete policy support or continues its two-decade contraction.