According to the UNESCO, Textile trade is one of the oldest occupations contributing Nations for centuries. In Nepal Textile trade was recorded back to the 14th century AD connecting through the silk road, the Silk Road linked China with the Roman Empire,allowing trading of goods between the ancient cultures of China, India, Persia, Arabia, Greece and Rome.

The recent discovery and analysis of the Nepali textile has added depth to modern knowledge of the Silk Road. The cloth, dated between 450 and 600 AD, was found at Samdzong 5, in Upper Mustang, Nepal.  A close analysis of the textile revealed degummed silk fibers and munjeet and Indian lac dyes. As these materials were not produced or available locally, they must have been imported from China and India.


Nepal submitted its application for the accession to GATT in 1989 and to WTO in 1995, required by WTO, Nepal has already presented a Basic Memorandum and is engaged in making necessary preparations. Preliminary rounds of meetings and the explanation of its position are also being undertaken for accession.

With the support of UNDP and HMG Ministry of Industry, Commerce and Supplies, a separate project called Nepal’s Accession to WTO has been established in Kathmandu for providing technical assistance to HMG and the private sector in preparation for the accession, and also for dissemination of information to increase public awareness on the subject. Several interaction programs organized by the Project with the objective of increasing the flow of information and public awareness have been received very well by the target group of business community, government officials, professionals, academicians and the press.

Jute farming and manufacturing used to be the main cash crop and exportable industrial product till the early 1970s, but economic viability could not be maintained in the wake of the invasion of cheap substitute like plastic. Jute now contributes only marginally to the economy. The textile industry, flourishing till the 1980s, is facing a fate similar to that of the jute industry and is currently passing through lean phase.


The textiles industry, can tap even 0.05 per cent of the potential $200 billion US market, readymade garment exports are estimated to exceed $1 billion directly, resulting in the direct employment of 100,000 people. With the introduction of duty-free, quota-free access to some 66 items to the market in the United States, which was the largest market for Nepal’s garment industry in the past, the Ministry of Industry, in collaboration with the UK aid funded Samarth, had commissioned an assessment on country’s garment industry.

“However, the findings pointed out that Nepal can compete in the global market by diversifying away from USA and producing small quantities of customized and specialized products with higher profit margins to cover higher costs.”


The development of industrial production could not gear-up due to political transition, strikes and low supply of power in the past. Although, the power supply has been easier at the latest time, the production and productivity of the industrial goods has not been competitive. The contribution of industrial production to GDP is estimated to remain at 5.4 percent in the current FY whereas two decades ago, it was around 10.0 percent.

The Indian economy which grew by 6.7 percent in 2017, is expected to expand by 7.4 percent in 2018. It is also projected that the economic growth will expand in South Asian countries in 2018 except for Nepal, Bangladesh and Afghanistan.

The inflation in Bangladesh, Bhutan, Nepal, India and Pakistan is projected to be somewhat higher in 2018 as compared to 2017.


Nepal is the 153rd largest export economy in the world. In 2017, Nepal exported $803M and imported $9.6B, resulting in a negative trade balance of $8.75B. In 2017 the GDP of Nepal was $24.9B and its GDP per capita was $2.7k.

The top export ($432M), and import ($6.05B), destinations of Nepal is India, followed by United states, China, United Kingdom etc.

Its top imports are Refined Petroleum($1.04B), Semi-Finished Iron($447M), Planes, Gold ($246M) and Large Construction Vehicles ($233M).


Nepal Exports to India Textile articles, sets, worn clothing was US$23.8 Million during 2017, a major cost for Nepalese garment export. Fabrics and accessories comprise 56 per cent of the FOB price, whereas export processing cost, including unseen expenses, stands at to 7 per cent and labor expense at 20 per cent. Likewise, 17 per cent is operational and administrative expenses, including profit and bank interest.

The United States is the single largest market for garment export from Nepal. Almost 90 per cent of the garment export from the country has gone to the US. Export during 1994 to 1997 stagnated at around 4650 million Rs. after achieving a good export


Nepal have been exporting 107 different items of garments to more than 50 countries. The top exports of Nepal are Non-Retail Synthetic Staple Fibers Yarn ($80M), Knotted Carpets ($71.1M), Flavored Water ($45.9M)

Bringing in raw materials and bringing out the finished garments constitutes one of the, according to the United Nations COMTRADE database on international trade.

Nepal mainly exports knotted carpets, textiles, plastics, hollow tubes, beverages and vegetables. Nepal’s main trading partner is India (accounting for 66 percent of all exports). Others include Bangladesh, Germany, France, Canada, China and Japan.


Various representative have promoted the institutional and professional development of the textile and garment sector. The major organization are listed below with their brief profiles.

  1. Garment Association of Nepal (GAN)

GAN was established by a group of garment producers in 1986. Its present membership is 212.GAN constantly works for the development of the garment sector and maintains constant vigilance on the smooth operation of the industry. One of the main services of GAN is to monitor and make recommendations for the distribution of US and Canadian quotas. GAN has recently prepared a report on the likely scenario of the Nepalese garment industry after phasing out the MFA quota after 2004, and is actively working to devise appropriate strategies for preparing the industry in the new changing global trading environment. GAN is working to initiating the necessary preparation for action to obtain preferential treatment in order to have access to the US and EU markets.

  1. Nepal Textile Association (NTA)

 Established in 1980 in Kathmandu by textile mills for the promotion and strengthening of the sector, NTA actively represents the collective interest of the sector and its members. NTA regularly examines the problem and prospects of the sector and recommends appropriate measures to the sectors concerned including HMG and its member industries. Due to the shutdown of several mills over the years, NTA’s present membership stands at 12. NTA has very limited physical and logistical facilities and staff. Having limited resources, its regular functions and program have been severely curtailed over the years.

  1. Garment Export Promotion Committee (GEPC)

 Established a decade ago, GEPC is a regulatory organ of HMG to supervise quota distribution and other related aspects for the development of garment industry. The Committee is chaired by the Secretary of the Ministry of Industry, Commerce and Supplies and represented by other Ministries and Departments concerned such as Finance and Customs, Central Bank and private sector agencies like GAN. The Ministry of Industry, Commerce and Supplies acts as the secretariat of the Committee.

 It has been in the past that several decisions taken by the Committee have not been implemented effectively as other ministries such as the Finance Ministry did not take decisions with a mandate from HMG. A necessary change in stature is deemed necessary to make the functioning of GEPC more effective and relevant.

  1. Others

The Federation of Nepalese Chambers of Commerce and Industry, the Nepal Chamber of Commerce and bi-national Chambers such as the Nepal – US Chamber of Commerce and Industry and the Nepal German Chamber of Commerce and Industry also undertake programs for the development of garment and textile industries.


Some major players in the field of Nepal textile and apparel industries are listed below with their brief profile