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Nepali garment exports to US surge
May '11
In spite of absence of government support for the garment industry, Nepali readymade garment export has seen a rise of 12.8 percent during the first nine months of fiscal year 2010-11 (Nepali fiscal year is from 16 July-15 July) compared to the same period during the previous fiscal.

As per the data released by Trade and Export Promotion Centre (TEPC), a total of 12.50 million pieces of apparel worth Rs. 3.49 billion were exported during the first nine months of the fiscal year 2010-11. Industry experts attribute this increase in exports to the rapid execution of pending export orders from the US.

Experts, however, believe that the phase is temporary and exports are likely to decline in the coming months as garment export companies do not have new orders in hand, mainly owing to the current political instability in the country.

In recent times, almost all garment factories in the country have cut down production. The nearly 40 small and medium garment factories are producing in very small quantities to meet personal commitments. The five large industries are also producing much below their capacity.

The Nepal Government is yet to implement the cash incentive that it had promised to exporters in the budget for the current fiscal year. This has also added to the disappointment of the garment exporters.

Although garments and Pashmina are the top Nepali export items to the US, the phasing out of quota system meant that Nepali exporters have to pay a high duty of 17 percent in RMG exports to the US. Hence, during the first meeting of Trade and Investment Framework Agreement (TIFA) in the US, Nepali entrepreneurs had underlined the need to revise GSP to clear trade hurdle.

The second regular meeting of TIFA is scheduled to be held in November 2011 in Kathmandu, Nepal. It is expected that Nepal would strongly lobby for duty exemption under GSP facility for garments, Pashmina, and textiles.

Fibre2fashion News Desk - India

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