Ready-made garments (garments) were number three in Nepal's export trade in the 1950s. In 1993, ready-made garments worth Rs 10 million were exported. In 1995, ready-made garments worth nearly Rs 6 billion were exported.

The production of ready-made garments was established as an important industry in the country. Thousands of people were employed in the industry. Investment inflows increased after the government adopted a policy of economic liberalization.

In this regard, in 2051, Momentos Apparels Ready-made Garment Industry was established in Bhadrapur, Jhapa at a cost of 250 million. The industry, inaugurated by the then Prime Minister Girija Prasad Koirala, was the first and largest ready-made garment industry in Nepal. The industry employed more than a thousand workers. The commercial bank had invested 86.5 million in the industry.

After the political change in 2046 BS, investment started flowing in as the country moved forward through an open economy. But by 2052 BS, concerns had grown as the export of ready-made garments was declining due to various national/international circumstances. There were concerns that this would have a huge impact on foreign exchange earnings and worsen the country's investment climate, affecting employment. Investors had made public the data showing a 30 percent decline in ready-made garment exports. Businessmen said that demand for ready-made garments produced in Nepal had decreased in the global market mainly because the cost price of ready-made garments produced in Nepal was high. Investors were also worried that Nepali products would not be able to compete in the global market because the quota system that the US had been providing since 2005 would be removed. The cost of Nepali products had been able to compete in the global market because the US had allowed exports at preferential tariffs. Businessmen complained that the operation of the ready-made garment industry was hampered by factors such as the need to import essential raw materials such as cloth and yarn, the need to bring in skilled workers from outside, and the government's interference in importing machinery and tools. They said that they were discouraged because the government had failed to come up with a policy to encourage the ready-made garment industry. They complained that the practice of workers striking and closing factories from time to time affected production.

Nepal Ready-Made Garment Association President Chandiraj Dhakal argued that government protection was necessary as the materials produced by bringing workers and fabrics from India were expensive. He said, ‘The cost of bringing fabrics imported from India to Nepal is more than the price of garments produced in India. Most Nepali workers are unskilled. They are not fully responsible for their work.’ The first vice-president of the association, Brajgopal Inani, said that the government should bring a special law for workers working in the industry and that workers should show efficiency and honesty in their work.

The most common complaint was that even though ready-made garment industries were opened, the government did not pay enough attention to their protection. Even though new machines had to be purchased for production, there was a fear that the cost would increase. Some industries had brought new machines and produced.

Industrialists complained that the government was also involved in the purchase and import of machines. The inability to bring machines and use new technology was also increasing the production cost and affecting the design of the products. Nepali industrialists were producing ready-made garments using old machines brought from India at that time.

General Secretary of the association Pushkardev Pant had said that the government should save the industry by providing loans at concessional rates. He had demanded that banking facilities should be easy and accessible. They said that if the government took interest and fulfilled the demands of the industrialists, foreign exchange equivalent to the government's annual budget could be earned. If the industrialists could reduce production costs, the export trade of ready-made garments could reach 700 million US dollars in two years.

Chairman Dhakal claimed that the future of such industries was at least 20 years. But investors were discouraged as the exports of the industry were gradually decreasing. At that time, Nepal's main foreign exchange earners from export trade were carpets, pashminas, and ready-made garments. The decline in their exports was causing losses not only for investors but also for the country. At that time, garments, carpets, and pashminas produced in Nepal were spread all over the world. There was a high demand for Nepali products in the US and Europe.

At a program organized in Kathmandu in 2050, US Ambassador to Nepal Julia Chang Block said that the sectors that brought in Nepal's foreign exchange were garments, ready-made garments, and tourism. Her statement also indicated that Nepal's ready-made garment market was becoming internationalized.

Foreigners were especially attracted to Nepali hand-woven ready-made garments and carpets. At that time, carpets accounted for 60 percent of the export trade. The news prepared by journalist Dilbhushan Pathak, which included the voices of industrialists who demanded that the government provide protection to their thriving industries as they were facing problems, was published in Kantipur Daily on 15 Poush, 2052 under the title 'Decline in Exports of Readymade Garments'.