Kathmandu: Senior Vice President of the Federation of Nepalese Chambers of Commerce and Industry, Anjan Shrestha, has said the government should focus on creating a supportive environment and incentives for the private sector rather than directly operating industries.

Speaking at a high-level interaction program, Shrestha stated that Nepal’s heavy reliance on imports—around 70 percent of total consumption—should be viewed not as a challenge but as a major opportunity for domestic production and industrial growth.

Garment Sector Decline a Major Concern
Highlighting the decline of Nepal’s garment industry, he noted that the number of garment factories has dropped sharply from around 1,250 
in the past to just about 100 today. He stressed the need for an integrated strategy to revive the sector.

Shrestha proposed a “Farm to Foreign” concept, covering the entire value chain—from farm, fiber, fabric, and fashion to foreign markets. To support this vision, he called for the establishment of a strong Garment Council or a dedicated government body.

Govt Should Facilitate, Not Compete
He criticized the government’s plan to revive the Hetauda garment industry under state operation, arguing that the government should instead support private businesses by reducing production costs through subsidies and policy support.

“Rather than running industries itself, the government should help lower production costs for the private sector,” he said.

Concerns Over Workforce and LDC Graduation
Shrestha also raised concerns about Nepal’s future labor supply, citing declining birth rates and increasing youth migration, which could lead to manpower shortages despite global fears of job losses due to automation and AI.

He warned that Nepal risks losing export-related benefits after graduating from Least Developed Country (LDC) status. However, he noted that the government is lobbying to delay the transition by at least three years, adding that discussions with the Finance Minister have been positive and flexible.

Call for Timely Incentives and Policy Support
He emphasized that export incentives, especially cash subsidies for exporters, must be provided on time to remain effective.

“We import 70 percent of our goods. This means there is still room to increase domestic production by 70 percent and capture the market,” Shrestha said, adding that sectors ranging from certificates of origin (COO) to vehicle assembly have strong potential in Nepal.

Private Sector Unity and Institutional Reform
Preparing to take over leadership of FNCCI after the upcoming elections on Chaitra 30, Shrestha pledged to unify the private sector and assign responsibilities based on experience and capability.

He also criticized government institutions like the Dairy Development Corporation (DDC) and Shahi Aushadhi Limited for competing with private businesses using taxpayer-funded subsidies, calling the approach counterproductive.

Shrestha concluded by presenting a clear vision focused on empowering the private sector, boosting exports, reducing production costs, and managing the economic risks associated with LDC graduation.