Department of Cottage and Small Industries(DCSI) have been constituted under Ministry of Industry, Commerce and Supplies (MOICS) in 1974 (B.S. 2030) to promote and foster various kinds of cottage and small industries enhancing their industrial productivity increment along with making congenial environment for industrial investment in accordance with policy execution for contributing national economy. Previously for the development of cottage and labour intensive industries Cottage Skill Awareness Office (Gharelu Ilam Prachar Adda) was established in 1940(B.S. 1996) and have been amended as DCSI. 

There were 75 cottage and small industries offices under this department. Having been organizational structure adjustment in 1990 (2049 BS), 27 cottage and small industries from all Terai district including Kathmandu, Bhaktapur, Lalitpur, Kavre, Palpa and Kaski are under this department. Rest of 48 districts has separate offices under Cottage and Small Industries Development Committee. DCSI, coordinates and administers the industrial administration through these offices in each districts.