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Govt to set up GPZ to boost garment industries

02
Aug '05
At a meeting held by Nepal Rastra Bank, Commerce Secretary Bharat Bahadur Thapa stated that cotton towel and readymade garment sector can still be reorganized and it requires a special attention for the enhancement for this sector.

The industries should strengthen themselves through mergers and buy outs and also expand their products range to become competitive at a global business platform, he added.

Thapa informed that the government reserved 525 acres of land for a garment processing zone to be set up at Birjung.

Nepal Rastra Bank Governor, Bijaya Nath Bhattarai opined that the readymade garment was one of the major exporting goods for the country and urged the government to acord top priority to it. The cotton towel and readymade garment industry ought to have a privileged conduct as they contribute mainly for export sector earnings.

The garment industry accounted for nearly 18 percent of the total exports in the 2003/04, and it registered more than 41 percent of the total export besides those to India, during the same period.

Its share was 6 percent to total foreign exchange. However, following the elimination of global teaxtile quotas, the exports of readymade garments sank 38 percent during the first eight months of 2004/05.

The country would face dilemma if the garment industry collapsed and it will be very hard to refinance and offer low interest loans for insecure industries. The overall investment in this sector is nearly Rs. 9 billion with around 25 percent of total export income, said Kiran Sakha, President of Nepal Garment Association.

He also urged for provision of investment from Industrial Rehabilitation Fund to develop the industry. The Industry requires to setup backward linkage to make its products more cost effective.

Sakha called for joint ventures between the government and the private sector for setting up infrastructure in the GPZ and appealed the banks to provide low interest loans.


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