"Demand has increased dramatically and even reputed retail chains like that of Reliance Corporation have started placing orders," said Prashant Pokharel, former president of Garment Association Nepal (GAN). [break]
The orders have mainly been placed for items like shirts and pants.
Five major manufacturers, including Surya Nepal, Momento Apparels, Ami Apparels and Alina Garment, engaged in exporting apparels to the southern neighbor operating and even other small manufacturers are enjoying spillover orders.
Nepali manufacturers are tailoring garments for top brands like Peter England, John Players, DJ&G, Ituchu and Pantaloons, among others.
Pokharel told Republica that order for the month is worth $500,000 more than what it got in the previous month.
The fresh orders have given breathing space for the industry that was struggling to survive amid loss of US market.
However, the new development has also brought worries to the manufacturers over their capacity to live up to the buyers´ expectation to deliver huge demands on time. The concerns are high, especially given the lack of large scale manufacturing units, which largely shut down over the past half decade, and the absence of reliable law and order situation to ensure smooth and timely exports. Nepal´s garment exports faced a sharp decline to around Rs 3 billion in 2009/10 from Rs 12 billion of 2000/01.
The latest turnaround in the industry is also reflected in the export data of the central bank. The data shows, Nepal exported garments worth Rs 156 million to India during the first quarter of the current fiscal year, up by 38 percent compared to the export recorded during the same period last year.
Pokhrel, who is also the promoter of Ami Apparels that has been approached by the garment wing of Reliance Corporation, said the buyers are particularly inquiring whether or not the manufactures can supply the orders on time.
GAN President Uday Raj Pandey said not all producers are openly accepting orders due to internal problems and this has largely limited the industry from taking benefits of the situation.
"If the manufacturers are to accept the orders the Indian buyers are volleying now, some 30 large scale manufacturing units can instantly reopen and survive comfortably. But unfortunately, the industries that pulled down the shutters have no workers and capacity to say ´yes´,” said Pandey.
Long-running problems of labor unrest, frequent banda and strikes have been preventing Nepali exporters from taking fresh order from overseas buyers who want timely delivery of consignment.
However, Nepali producers enjoy comparative cost advantage over the Indian producers due to customs duty difference between the two countries. Nepali producers pay lower duty than their Indian counterparts that pay 22 percent duty on import of raw materials.
Pandey said export of garments would not go up in a sustainable manner unless Nepali producers guarantee timely supply of the ordered quantity. “We have to push for timely enactment of Export Promotion Zone (EPZ) Act because we can´t resolve the existing problems of export sector without establishing EPZ in our country," Pandey.
prabhakarji@gmail.com
Related story
Capacity of Dhalkebar substation increased, 315 MVA capacity po...
