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Garment exports fall by a staggering 50%
Jul '09
Readymade garment exports of Nepal to the US halved in the first six months of 2009 as compared to what the country has exported during the corresponding period of the previous year. Nepal exported just US $3.55 million worth of garments to the US, as the buyers in the largest apparel market moved towards cheaper suppliers.

These apparel exports were just 10 percent of the exports done in the year 2004, which is the final year of the quota regime in the international apparel trade. Since then, Nepalese exports have toppled down sharply on account of eroding competitiveness in the international market and labour trouble which affected production and timely shipments.

Due to the unchanged problems of the industry, the garment exports of the country dropped by the maximum of 80 percent alone in the month of June this year, as compared to the same month of previous year.

Garment exports to the US, in June of this year, totaled to just $ 0.19 million, against $ 0.83 million in June 2008. Whereas, in June, 2004, apparel exports of Nepal stood at $ 5.16 million, as per the statistics of Garment Association Nepal (GAN).

Reduction in per unit prices by nearly 15 percent, by global importers is the main reason behind the decrease in export figures and this reduced price has compelled manufacturers to reject the orders.

The garment sector of the country, which was once the highest foreign currency generator has been in tatters since 2002, after the US promised duty-free access to its markets to Nepalese competitors from the Sub-Saharan and Caribbean regions.

Also the phase-out of the quota system from January 2005 affected the industry drastically. Some of the factors such as industrial security, labour stir and general strikes resulted in closure of a large number of industries.

According to the exporters, if the US government pledges duty-free market access to Nepal, the garment industry in the country and the government develops a garment processing zone, in the vicinity of Birgunj, it could help reduce the transit transport cost by about 20 percent and help the sector be back on the tracks.

GAN has urged the government to lobby for the US trade bill as the bill assures duty-free access for 14 LDCs of Asia and Pacific, which also includes Nepal.

Fibre2fashion News Desk - India

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