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US-Nepal trade deal: May revive garment sector

Oct '09
A draft proposal of the US-Nepal trade deal, outlined during the recent visit of United States Trade Representatives (USTR) to Nepal, might offer duty-free access to the export of Nepali Garments (RMG) in the US markets, said Mr. Prashant Kumar Pokharel, President Garment Association of Nepal.

Mr Pokarel said that the Prime Minister Mr. Madhav Kumar Nepal and Foreign Minister Ms. Sujata Koirala did not lobby with American senators, who were very positive about duty-free access for Nepali garments, as well as not raised the issue of Trade Treaty draft proposal during their visit to the US.

US was the largest buyer of readymade garments that used to import around 80 percent of garments, but currently the export of Nepali garments to the US has slipped down very badly.

As per GAN statistics, in August, overall garment exports witnessed a down fall of 81 percent and totaled to $145,000 in terms of value. Nepal has lost the US market for its RMGs and will also lose the Indian markets, too. The Indian markets had proved to be helpful in the past few months of the crisis, said Mr. Pokharel.

As four percent additional duty is still imposed on the export of Nepali garments to India; even though the trade agreement, signed between Nepal and India during Nepali Prime minister's visit to India, was expected to support Nepali Industries.
Due to this four per cent additional duty charge, the export potential of Nepali apparel to India is falling which stood at Rs 1.62 billion during 2007-08.

Citing this additional duty on Nepali garments as unjustified, GAN President said that exports of garments from the country are in trouble due to these duty charges. He further added that an immediate meeting of Inter-Government Committee (IGC) can help prop up garment exports to India.

Fibre2fashion News Desk - India

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