Interviews
Stitches begin to fall apart in garment export sector
23 Apr '09
2 min read
The global economic recession and the resultant slowdown across the textile and garment sector are taking its toll across most of the companies in countries which have a formidable or a major base in those industries.
Nepal is also no exception, though unfortunately the downfall of the sector began with the dismantling of the multi-fibre agreement in January 2005, which led to the end of the quota system and which had provided the thrust to exports.
This quota system also meant that it received tariff free access to the biggest market in the world; the US. Before the dismantling of the quota system, the US had also provided the same facilities to a few other countries.
This in turn had led to a fierce competition in the US markets between Nepal and Cambodia and a few African countries. To add to the woes of the Nepali apparel sector, the labour unrest in the country has contributed in no less measure.
This has led to exports to the US market falling by more than 50 percent. Shipments of garments have fallen from US $5.65 million in the first quarter of 2008 to just $2.30 million in the same quarter of 2009.
The Nepali apparel sector had prospered very well in the 80's and set up a very good base and became one of the biggest export sector from the country in the 90's. But from 2002 onwards, the rot began to show and the stitches began to fall apart.
The apparel sector has been crying for attention from the government since the last few years and has demanded a few sops to revive the dying industry, but all of it has fallen on deaf years, since the government has chosen not to respond.
The ongoing recession has stuck the sector with a vengeance and impact, never seen before and if it wants to survive this tsunami like crisis, the government will have to do a lot more than it has done till now.
Nepal is also no exception, though unfortunately the downfall of the sector began with the dismantling of the multi-fibre agreement in January 2005, which led to the end of the quota system and which had provided the thrust to exports.
This quota system also meant that it received tariff free access to the biggest market in the world; the US. Before the dismantling of the quota system, the US had also provided the same facilities to a few other countries.
This in turn had led to a fierce competition in the US markets between Nepal and Cambodia and a few African countries. To add to the woes of the Nepali apparel sector, the labour unrest in the country has contributed in no less measure.
This has led to exports to the US market falling by more than 50 percent. Shipments of garments have fallen from US $5.65 million in the first quarter of 2008 to just $2.30 million in the same quarter of 2009.
The Nepali apparel sector had prospered very well in the 80's and set up a very good base and became one of the biggest export sector from the country in the 90's. But from 2002 onwards, the rot began to show and the stitches began to fall apart.
The apparel sector has been crying for attention from the government since the last few years and has demanded a few sops to revive the dying industry, but all of it has fallen on deaf years, since the government has chosen not to respond.
The ongoing recession has stuck the sector with a vengeance and impact, never seen before and if it wants to survive this tsunami like crisis, the government will have to do a lot more than it has done till now.
Fibre2fashion News Desk - India
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