Labour unrest leads to shifting of garment production bases

30 May '07

2 min read

Many leading garment manufacturers in Nepal are compelled to shut down their manufacturing units because of labour problem. They have started eyeing production bases of neighbouring countries like India, Sri Lanka and Vietnam to meet their export targets.

Labor unrest, industrial insecurity and competitive challenges in the international market have worst effect on the Nepali readymade garment industry.

When Fibre2fashion contacted Uday Raj Pandey, General Secretary of Garment Association Nepal (GAN) he said, “After political establishment and stability entrepreneurs will come back once they get the market to keep the buyers in Nepal”.

Answering the question about the GAN's effort to negotiate with Government on behalf of labourers, Pandey said, “GAN is trying to negotiate with the Government and has requested all political parties for the problem they are facing.” He adds, “They are trying their best in this matter and placing problems in front of Government regarding the industries in Nepal are facing”.

Talking about the measures to stop migration of manufacturing bases to other countries, the General Secretary said, “This issue has come up recently and as entrepreneurs wish to play safe they are venturing overseas also. Government is trying to stop this practice. It will affect Nepal economy due to receiving less foreign currency. Government will come up with new resolution or law to stop this practice”.

Pandey showed big concern for this practice if it continues and also said that it will affect Nepal's economy. He explained that after quota phase expiry exports have reduced and orders are also deminishing. This will lead to less foreign currency and unemployment in Nepal, not only for the textile industries but also for its economy as a whole”.

Garment Association Nepal (GAN) estimates that shifting of production has affected on the jobs of around 3000 Nepali workers. Employment in the garment industry is reduced down to 15,000 from 30,000 over the last couple of year.

A report from GAN shows that the figure of export has touched more than US $500,000.

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