Kailali district sees cottage industry decline affecting locals in Nepal

Wednesday, March 20, 2024

In Kailali district, Nepal, a significant downturn has impacted the local economy with 137 cottage industries ceasing operations. This decline stems from various factors, including a critical shortage of raw materials and the inability of some businesses to sustain operational expenses or match the competitive pricing in the market. The Cottage and Small Industries Office has noted that a portion of these closures resulted from owners seeking employment opportunities abroad, reflecting a broader trend of labor migration affecting local enterprise sustainability.

Despite these challenges, the district has witnessed a promising rise in women-led enterprises, attributed to incentives such as reduced registration fees for women-owned businesses. To date, Kailali has seen the registration of 15,434 industries, with 137 registrations recently revoked due to the closures. The composition of these industries spans several sectors: 3,194 in production, 6,488 in agriculture, a modest number in construction and information technology, 65 in tourism, and 5,673 in service-oriented fields.

The aggregate investment across these industries reaches an impressive Rs 25 billion, highlighting their significance to the local economy. In support of revitalizing the industrial landscape, the Sudurpaschim provincial government has dedicated Rs 15 million towards the ‘One Electoral Constituency, One Industry’ initiative for the current fiscal year, aiming to foster economic growth and stability.

Employment data reveal that these industries provided jobs for 9,120 women and 69,611 men, underscoring the vital role of cottage and small industries in job creation and economic development in Kailali. The revenue generated by the Office from these industries amounted to Rs 5.21 million in the fiscal year 2022/23, with a notable increase to Rs 10.5 million in the first eight months of the fiscal year 2023/24.

The contraction of cottage industries in Kailali not only affects local employment but also poses potential setbacks for tourism and the broader economic landscape. The decline calls for strategic interventions to address raw material shortages, enhance market competitiveness, and promote sustainable industrial practices, ensuring the district’s economic vitality and preserving its tourism appeal.

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