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Dwindling garment export business of Nepal becomes major concern for Indian stakeholders

SILIGURI/ DHULABARI (NEPAL): Once roaring readymade garment trade of Nepal, to outer world, especially to US is in dwindling situation. The negative dynamics, despite being purely an issue of Nepal, makes good number of Indian stakeholders highly concerned.

According to the Garment Association of Nepal (GAN), despite 11% growth during Nepali fiscal year, 16 th July 2010 to 15 th July 2011 over the previous fiscal, garment export is in overall bad shape. Compared to NPR 11.6 Billion in 2000-2001, it has gone down to around NPR 4 billion in 11-12.

“Against over 450 major factories just 10 years back, hardly 10 are now operational. We had several rounds of talk with US, the largest buyer making around 90% share in our total Garment export,” Mr. R B Pokhrel, General secretary, Export Council of Nepal told ET.

Nepal’s one of the biggest tax-paying company Surya Nepal, a subsidiary of ITC Ltd, India, also had to close down its garment division factory.

According to Indo-Nepal cross-border traders, manufacturing process of the garments for outer world or US need higher skill level and thus offer higher remuneration making it attractive for the skilled workers from India.

Many entrepreneurs from Indian garment hubs like Delhi, Ahmedabad, Ludhiyana or Kolkata have their business interests involved in Nepal’s garment trade. And the open border in between the two countries facilitates legal flow of manpower from India to Nepal’s premium class Garment manufacturing.

“Being land locked, Nepal utilizes sea ports at Kolkata or Mumbai to access outer world. This makes good number of Indian traders and handling agents involved into the sector. The negative trend is hitting them all,” said Mr. B Saha, an important readymade garment wholesaler in Siliguri.

As learnt, Nepal used to enjoy a preferential policy of US market that contributes near 90% of Nepal’s garment export. But withdrawal of that in 2005 initiated the downfall.
Source: economictimes

Even, “A US bill, passed during May 09 providing duty free status to textiles and apparels imported from 14 Least Developed Countries (LDCs) including Nepal also could not arrest the downfall. Now we are looking for new markets to revert the scenario,” said GAN members.

Published Date: Wednesday, August 1st, 2012 | 06:39 AM

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