For many designers and buyers, Nepal is the top address for high-end production, contemporary design and custom orders. The country’s capital Kathmandu is also home to Label STEP’s largest office and the organization’s innovation hub.

Nepal’s handmade carpet industry was started by Tibetan refugees in the early 1960s. What started as small workshops providing jobs in refugee camps eventually became one of the pillars of the national economy. With its centralized setup in Kathmandu, the orientation towards exports and its innovations in custom design and projects, Nepal probably was the pioneer of the modern handmade carpet industry.

However, years of civil war, political unrest and economic instability have caused harm to the carpet industry in Nepal. The large, well organized manufacturing plants had to close their doors, and production shifted to innumerable small, less exposed workshops. This decentralization process had negative impacts for everybody: worsening working conditions, pressure on wages, the closing down of child daycare centers, but for some time also difficulties to maintain the high quality of Nepali carpets and delivery times.

Today, the carpet industry in Nepal is back as a world leader in handmade carpet production. The industry is significantly smaller than it once was, but has further sharpened its profile as a high-end producer.

Label STEP upholds a rigorous monitoring system to verify if working conditions comply with its fair trade standards and initiate corrective actions whenever necessary. Independent STEP auditors visit each production unit every one or two months on average. A systematic Weaver Empowerment program was developed, building weavers’ and workers’ capacity through educational programs that cover such topics as health and safety and financial literacy.

Label STEP is also actively promoting an industry dialogue with all stakeholders. Together with industry associations and workers unions, a draft for carpet industry specific labor law was developed and the proposal submitted to the relevant government authorities. The goal is to stabilize the industry and support its sustainability. Many newly introduced legal provisions for carpet weavers and workers can be traced back to this initiative.

In an effort for a greener carpet industry, Label STEP supports dyeing mills and end-washing facilities with the construction of waste water treatment plants and other measures to minimize the environmental impact.

And because of numerous and growing challenges the carpet industry is facing in the capital, Label STEP in cooperation with the UKaid funded Skills for Employment Program runs a pilot project to establish artisan villages in rural Nepal and bring the carpet industry to the weavers regions of origin, reducing their need to migrate for work.