The garment industry in Nepal thrives amidst the icy landscapes of the Himalayas, representing a vital sector in the country's industrial transformation. Nepal's apparel industry has undergone a strategic shift from import substitution to export promotion, catalyzing growth in an otherwise static industrial landscape. Renowned for its rich artistic and architectural heritage, Nepal's apparel industry holds the potential to revitalize its economic standing.

Having emerged in the past fifteen years, Nepal's contemporary apparel industry initially focused on limited traditional apparel exports to a restricted number of countries. However, it witnessed remarkable growth due to both domestic and international factors. When other Asian nations encountered challenges with the quota system imposed by Europe and America, Nepal's apparel industry experienced significant growth, benefitting from the situation.

Numerous apparel factories in Nepal have been established through financial and technical collaborations with Indian industrialists. These factories often operate with financial support from across the border, facilitating shipment through sea ports in Kolkata or Mumbai. The open borders between Nepal and India also contribute to an influx of Indian workers employed in Nepal's garment factories.

Nepal's apparel industry primarily centers around exports and faces intense competition with other global players. Despite this, the sector has notably contributed to the country's foreign revenue and overall economic growth. It serves as a significant source of both direct and indirect employment, providing livelihoods for over a hundred thousand individuals. Key export markets for Nepalese apparel include the European Union, India, the United States, and Germany.


Apparel exports of Nepal increased by 20.8% reaching `1.85 million during the beginning of 2011. Garment manufacturers request Government aid regarding the extra fines on advance payments for raw material imports. Government has been levying an extra fine on the bank guarantee which apparel makers get to offset their losses, if any. They also expect soft loans from the Government.
To get an elaborate idea of Nepal's export market, the News Desk of Fibre2fashion, had a talk with Mr Uday Raj Pandey, President - Garment Association of Nepal (GAN).
How is the current apparel export market for Nepal?

"Since last 4-5 years the clothing export market is very slow from Nepal. Earlier the main market was USA, but now we also export to the European Union (EU). EU for instance, accounted for 60% of exports. The business is slow due to political instability. So, buyers are not sure if they will be able to receive the goods on time. Consequently, Nepal is not receiving big orders, while only small orders are coming, mainly from Europe ".

What initiatives are taken by GAN to boost apparel exports?

"Our target is not to let exports fall, when compared to last year. Now we are concentrating on increasing exports to the US, Europe and India ".

How is the Indian market?

"Currently India is developing in to a big market for Nepali clothing. So, we are targeting India also, because India is very near to Nepal. Big stores from India are also sourcing goods from Nepal for their branded stores.

Fabric from which the apparels are produced comes from other countries like China and Korea, after which the garment is produced in Nepal and then sent to India because, that type of fabric is still not available in India. Secondly, we are catering to the small orders because they are more value added, but can be handled by even small factories in Nepal and hence we are marketing in that sector.

We are talking to the labor unions and trying to negotiate, so that going forward there will be no problems and all shipments can be dispatched on time and in another year, we hope to be able to get big orders. Even now big orders are coming to Nepal but the problem is labor ".

How do you predict exports for 2011?

"This year, in the budget the government has given some 2-4% export subsidies to the exporters. So hopefully, that will benefit us to increase our exports ".

Though readymade garments are one of the biggest export items of Nepal, political instability of the country has hurt the growth of the industry. Power crisis in Nepal has increased the cost of production, thereby causing a considerable decline in profits. Despite the hurdles, garment manufacturers are doing well, and apparels are cheaper, comparatively over Chinese clothes.
References:

1)     Data source: Garment Association Nepal (GAN)

2)     ganasso.org

3)     thehimalayantimes.com