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Garment exports plunge unabatedly, Govt waits in optimism

08 Sep '08
3 min read

Month on month, the readymade garment industry of Nepal is still undergoing a shrinking process when it comes to its market share in the US. Apparel exports have plummeted by a whopping 49 percent during the first eight months of this year.

Mr Uday Raj Pandey, Vice President of Garment Association of Nepal (GAN), informed Fibre2fashion that “sales to the US from January to August 2008 totaled to a mere US $10.17 million, down from $19.73 million during the same period last year.” He also added saying, “exports had plunged by 2 percent in January 2008 when compared to the same month in the previous year. However, it slipped by an enormous 62 percent in August this year over the same month last year.”

The country dispatched only $0.69 million worth of garments in August compared to US$ 1.83 million recorded in the same month last year.

Reasons have been attributed to eroding competitiveness, political instability, and diversification of international orders to other countries. As a result of these disturbing conditions caused by both internal and external factors, garment exports to the US are worth a mere one-tenth of what they used to be in 2003.

However, GAN is presently hopeful about conditions improving as the newly elected government has already started activities to reinstate normalcy.

Moreover, a large number of least developed countries have received duty free facility for exporting goods to the US. Among these are the African countries that are covered under the African Growth and Opportunity Act and the Caribbean countries that are sheltered under the Caribbean Basin Act. Now, Nepal is also trying hard to get approval from the US which will help to avail duty free preferences and which would bring down the rates for domestic goods by 18 percent when compared to those prevalent in competing countries like India, China, Bangladesh, and Sri Lanka and consequently help increase over all exports.

With this regard, the commerce department of Government and President of GAN also visited US and held discussions with officials from the Senate and the Congress for acquiring special preferences to access US markets.

Nepal is now optimistic about receiving duty free export access from January 2009 whose direct impact will be seen on the exports which are sure to manifold by March 2009. As part of the remedial measures, the domestic Government has also been urged to implement the program of developing a Special Economic Zone including a Garment Processing Zone in Birgunj to resolve the problem of labor unrest and higher cost of production.

Fibre2fashion News Desk - India

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