Businessmen producing and exporting pashmina products in Nepal have taken initiative to produce raw materials within the country. To this end, they established Nepal Fiber Processing Pvt. Ltd. in Lalitpur for the collection and processing of raw materials starting this year.
Pashmina is one of Nepal's key export products, but the country has historically relied entirely on imported raw materials. Nepal Fiber Processing Pvt. Ltd. aims to change this by strengthening Nepal's pashmina supply chain and reducing dependency on foreign sources.
The processing center, located on 4 ropanis of land in Harsiddhi, Lalitpur, was established with an investment of Rs 50 million from members of the Nepal Pashmina Industry Association and two farmers from Mustang. Entrepreneurs have also collectively invested in the Himalayan region to create infrastructure, including a collection center for Cashmere goat wool, essential for pashmina production.
Dhan Prasad Lamichhane, president of the association and chairman of Nepal Fiber Processing Pvt. Ltd., stated that this is the first step toward achieving self-sufficiency in pashmina raw materials. Although pashmina is a major export product, almost 100% of the raw materials are currently imported. He noted that Nepal's upcoming transition from a Least Developed Country (LDC) in 2026 makes increasing domestic value addition crucial, as the country will no longer benefit from current customs exemptions.
According to the association, Nepal requires around 400 tons of processed pashmina wool annually, but only 2% is supplied domestically. The industry has traditionally relied on imported yarn from Mongolia, China, and Australia. Lamichhane believes that, with proper government support, Nepal could fully replace imports with local production within the next 7–8 years.
To achieve this goal, a collection center has already been built in Lomanthang, Mustang, at a cost of Rs 3.2 million, and additional centers are planned in Dolpa, Mugu, Humla, and Jumla. Farmers will be trained in advanced sheep-rearing techniques, allowing them to produce more wool and contribute to self-sufficiency.
The initiative has also received support from the International Trade Center (ITC), the World Bank, and the government. ITC, which operates under the World Trade Organization and the United Nations, focuses on developing small and medium industries. It has trained 302 farmers in Mustang and Dolpa on wool production, grading, and storage. Two farmers from Mustang are shareholders in the processing company.
"The ITC technical team trained farmers to optimize production methods, enabling wool production from a single Cashmere goat within 2–3 years," Lamichhane explained. Samples collected from Mustang and Dolpa were sent to Mongolia for analysis, and 80 samples are currently being tested by Nepal's Department of Food Technology and Quality Control.
Currently, Mustang supplies 2 tons of wool annually, while Dolpa provides 5–6 tons. These supplies are being processed at the Lalitpur facility, which was established in 2078 but only recently began scaling production with new machinery.
Nepal exports pashmina worth over Rs 3 billion annually. According to Nepal Rastra Bank, pashmina exports totaled Rs 3.2 billion in the fiscal year 2023/24. Entrepreneurs hope that these new initiatives will significantly enhance Nepal's pashmina industry by ensuring a steady supply of locally sourced raw materials.
