The Bagmati Provincial Government is drafting regulations to facilitate the establishment of handicraft villages, a provincial minister has revealed.

Following the enactment of the Handicraft Village Establishment and Operation Act, 2024, the province has taken steps to implement the law, which requires at least 20 entrepreneurs to come together to establish a handicraft village.

Highlighting that entrepreneurs from the province contribute approximately 80 percent of Nepal’s handicraft production and exports, the provincial government aims to promote and regulate the sector through this initiative.

"The provincial government has begun formulating regulations to implement the act," said Shukmaya Tamang, Bagmati Province’s Minister for Industry, Commerce, Land, and Administration, at a program on Monday. "We are gathering input from stakeholders to ensure the regulations are effective."

At an interaction program in Lalitpur on the Proposed Regulations on the Establishment and Operation of Handicraft Villages, Minister Tamang announced that the Bagmati Province government plans to support handicraft village development across 119 municipalities and rural municipalities. She further stated that the initiative will be incorporated into the province’s policy, program, and budget for the upcoming fiscal year, along with a separate institutional structure to support it.

She emphasized that the regulations will promote the use of locally sourced raw materials, encourage domestic consumption, and boost exports while incorporating suggestions from entrepreneurs.

Presenting a concept paper, Mahesh Raj Poudel, a representative from the same ministry, stated that the upcoming regulations will include a concessional loan scheme to strengthen the province’s economy through handicraft-related businesses. Minister Tamang stressed that provisions should allow entrepreneurs in handicraft villages to access loans at an interest rate of 1 to 3 percent.

Poudel cited the example of Rajasthan, India, where handicraft exports increased by 25 percent after its Handicraft Village was included in a Special Economic Zone (SEZ). He emphasized the importance of clear land allocation provisions in the new regulations.

During the event, president of the Federation Handicraft Associations of Nepal Rabindra Shakya called for adequate budget allocation for handicraft villages in the next fiscal year. He urged that regulations clearly define the key components of a handicraft village and suggested allowing handicraft villages to be established on rented vacant land within industrial areas in the valley.

Shakya also highlighted the need for all three levels of government—federal, provincial, and local—to serve as key markets for handicrafts. Rather than creating a separate regulatory body, he proposed forming a dedicated branch or board within the relevant ministry to oversee and promote the sector.

Similarly, Meghnath Rijal, under-secretary at the Federal Ministry of Industry, Commerce, and Supplies, suggested that handicraft villages could be developed through public-private and community investments.

Participants at the event stressed the need for clear quality standards, an international-standard laboratory, and guidelines on necessary services and facilities for handicraft villages. They also underscored the importance of defining intergovernmental coordination within the regulations.

Additionally, stakeholders advocated for the implementation of craft tourism in handicraft villages, the creation of an official list of raw materials for handicrafts, and the formal designation of existing handicraft hubs as official villages.