A senior clothing association chief in Nepal on Tuesday warned the country's apparel industry is in serious trouble with many firms struggling with debts and laying off workers.

Shata Pokharel, central vice-president of the Garment Association Nepal, told The Himalayan Times paper that many companies face closure unless orders pick up and the government introduces new policies.

"Most of the ready-made garment industries in the country are facing a shortage of working capital and are unable to pay back bank loans," the paper quoted him as saying.

Nepal's garment sector is dependent on foreign orders and employs around 100,000 people at scores of factories.