Rise in Nepali garment export could help India

01 Jun '09

2 min read

A new US Bill would boost the struggling apparel industry in Nepal. This US Bill has introduced a trade relief for apparel and textiles imported from Nepal. Many of the Indians associated with Nepal's apparel industry would be benefited through this development indirectly.

Members of Garments Association Nepal (GAN) informed that the recent bill would provide duty-free status to textiles and apparels imported from 14 least developed counties (LDCs), which includes Nepal too.

US stands second in the list of largest importers of Nepali apparels and textile. In the year 2007-08, Nepal exports to the US stood at $940 million, which was 8 percent of Nepal's total export.

Garments export covers the major part of Nepal's exports to the US. As per the statistics of GAN, 90 percent of Nepal's total apparel export in the year 2001-02 was to the US but in 2007 this export saw a sharp downfall and slipped to 62 percent, the decline still continuing into 2009.

A further fall has been recorded by the Nepali garments export since January 2009, when it witnessed the plunge of 73 percent in the first month of 2009, compared to the same period in 2008.

This slide in exports continued further with a fall of 65 percent, 31 percent and 58 percent during the months February, March and April respectively.

Experts said that the labour-intensive industry would definitely be helped by the new US bill. An industrially and financially weak country like Nepal deeply needs this type of bill since; 15 years ago the number of garment companies was 450 that have now been reduced to 10-15 today.

As Nepal and India have open borders a large number of Indian workers from border areas work in Nepali garment factories. Many of the garment factories in Nepal run on finance from across the border and for purposes of shipment it does it though Kolkatta or Mumbai sea ports.

This involves many Indian traders and handling agents in Nepal's export operations and all these traders and the handling agents will be benefited with the increase in Nepal's garment export to the US.

Fibre2fashion News Desk - India

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