European Union (EU) has been levying 12 percent duty on Chinese Readymade Garment (RMG) - a provision that prompted Chinese apparels makers to eye Nepal for investment and enjoy zero-tariff that Nepali products enjoy in EU markets. [break]
"We have received offers from Chinese investors to invest in Nepali apparel industry. They are not quite keen on opening new garment factories in view of procedural problems in registration of a new firm in Nepal. They have asked Garment Association Nepal (GAN) to take initiative and create a conducive environment for Chinese investors to invest in Nepali readymade garments industries," said Uday Raj Pandey, president of GAN.
They have approached GAN through Nepali fabricators who import raw materials for RMG.
Pandey said Chinese investors´ willingness to invest in Nepal stems from the fact that boutique goods enjoy high demand in the European market after the end of duty-free, quota-free regime for Nepali apparels in US in 2005.
Despite persisting European financial slowdown affecting bulk orders of ordinary RMG, smalltime importers in Europe are enjoying encouraging demands for comparatively cheap boutique apparels. Small exporters are supplying 5,000 to 10,000 apparel pieces at a time to buyers in Italy, Germany and France.
Nepali boutique apparels such as jacket, trousers and T-shirts are finding good response in those markets.
"Given the end of duty-free entry to US market and continuation of additional duty in India may have prompted Chinese garment investors to secure European market through Nepal," said Pandey.
Nepal exported total 17.08 million units of RMG worth Rs 4.08 billion during the fiscal year 2010/11, up by 8.7 percent in terms of value compared to the previous year.
During the first quarter of the current fiscal year, total 4.59 million units of RMG worth Rs 1.5 billion were exported to overseas markets, posting a marginal 5.7 percent rise compared to same period last year. According to exporters, European buyers import more than 60 percent of total exports of RMG from Nepal.
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