Nepal"s total readymade garment export stood at around Rs 4.5 billion in the last fiscal year, official records show. And in terms of volume of export income generated, it is still the largest export of Nepal. [break]
Of the total export, readymade garment export to third countries stood at around Rs 4 billion, according to the central bank. Export to India was valued at Rs 50 billion, say entrepreneurs.
´It is true that export was down compared to previous years. But the figures suggest the industry is still performing strong”,´ said Uday Raj Pandey, vice-president of Garment Association of Nepal (GAN).
Given this situation, exporters say the very approach of policymakers who ignore the industry and tagging it as doomed, is wrong.
What is also true though, the export to the US has continued to spiral downwards and totaled just around Rs 1 billion. But export to the European market recorded a jump to Rs 3 billion.
´Many exporters and officials do not take exports to the EU seriously, but on the back of duty free market access and derogation facility, whereby we enjoy exemption on stringent rules related to raw materials, the export has jumped encouragingly,´ said Pandey.
Exports to India plummeted, but traders attributed the decline largely to the imposition of additional duty for most of the fiscal year.
Manufacturers argue that if India had not imposed additional duty of 4.5 percent, exports to India would have been much better. ´We believe this would have jacked up our total readymade garment export to well over the Rs 5 billion mark,´ said Pandey.
Moreover, manufacturers informed myrepublica.com that they are still receiving inquiries from India aiming to place orders for the upcoming Dipawali season and from the US with an eye to Christmas and other festivals.
But they said larger manufacturers getting the inquiries are not eager to reopen their factories just yet. ´There are internal problems and without addressing these, reopening a factory is a risk,´ said one manufacturer, referring to undue demands and strikes by trade unions, extortion, and lack of support from the government to cut costs.
To address these concerns, GAN has long urged the government since 2007 to put in place an order-based hiring system and speed up the development of a Garment Processing Zone (pushed since 1999) to lower production cost. It has also sought commitment from trade unions and their parent political parties not to pose undue demands and hinder production.
´If the government and political parties show sensibility to fulfill just these demands, we are confident Nepal"s garment industry will bounce back and exports will cross Rs 8 billion in just a couple of years,´ said Pandey.
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