Inability to withstand stiff competition extended by ready-made garments (RMG) brought-in from India has compelled 15 of the 16 textile units in the eastern region of Nepal to cease operations, resulting in a loss of investment worth more than one billion NPR.
Sah Factory Pvt, Prabhat Textiles, Ashok Textiles, Diamond Textiles, DK Textiles, Jagadamba Textiles and Star Textiles are prominent among the factories which have closed down. A sense of insecurity, strikes and bandhs are also among the reasons behind the closure of these factories.
According to experts, the opening up of the Nepal-India border has greatly benefited India-made garments. Garments carrying 'Made in India' label are heavily in demand in the eastern region of Nepal due to their economical prices.
Lack of market regulation and absence of Government support for factories facing financial crisis are also, to some extent, responsible for the closure of the factories, the experts add.
Pragati Textiles Industry located at Khanar of Sunsari is the sole factory still in operation. However, it has also currently reduced its annual production to 1.6 million metres, which is much less than its capacity of 2.5 million metres.
In the past, Indians used to visit Nepal to buy clothes. But now there is a reversal in the trend as Nepalis not only go to markets bordering with India but also to places as far off as Kolkata to buy Indian garments, according to local people.
Fibre2fashion News Desk - India
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