Nepal Textile Industries Association has decided to close down as Nepal government has failed to offer any stimulus package for the textile industry which is on a verge of collapse. According to the President of the association Shailendra Lal Pradhan, the textile sector was not listed among the 44 industries in the government decision that were allowed to open partially, even though it had been severely hit by the virus lockdown with 95 percent of the factories shuttered.

The association said the government's annual financial plan did not contain any relief measures for the textile industry despite the suffering brought about by the prolonged stay-at-home order. The government had proclaimed that the textile industry would get interest subsidies, but it did not happen. And now the budget statement says the electricity tariff exemption has been removed. A lot of money has been poured into the domestic textile industry. In 2014 alone, investors pumped in another Rs1.5 billion, encouraged by the government announcement that they would get a 70 percent value added tax refund.

However, all that investment has been jeopardised with the government withdrawing the VAT adjustment facility that fabric manufacturers have been getting for the past 20 years