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Export of Nepalese Garment plunges by 39 percent

Export of Nepali readymade garments, one of the major foreign currency earners has decreased by 39 percent in last ten months of fiscal year 2005 as compared to same period of last year.

The export of readymade garment to United States, the main market of Nepalese garment dropped to USD 47,100,000 from USD 77,600,000 in the review period. The US market covers 80 percent of total export of Nepalese readymade garments.

The garment exports has been dwindling with the termination of multi-fiber arrangement (MFA) from January 1 this year, which put the quota system of exports to US out of circulation.

According to Garment Association of Nepal (GAN), more than 60 readymade garment industries closed and nearly 50 thousand people lost their jobs due to the decline.

According to statistics, of the goods worth USD 142 million exported in fiscal year 2004, the readymade garment sector covered more 68 percent share.

Month-wise export data shows that export had declined by 29 percent in January, followed by 55 percent in February and 41 percent in March.

The exports also dropped by 15 percent in April, 50 percent in May, 15 percent in June and 21 percent in July. However there was no improvement in August, September and October posting declines of 59, 43 and 48 percents respectively.

The export had declined throughout 2004 as well except in the month of October.

Uday Raj Pandey, General Secretary of GAN told Nepalnews that the situation of the country, competitive strength of Nepali readymade garments and termination of MFA are the major determinants for the fall of readymade garment.

Pandey further added that if the ‘Trade Act 2000,’ a bill that was pending at the US Senate is passed, it would help to boost the export of goods of Least Developed Countries (LCD) like Nepal to the American market.

“If the bill was passed, our products will get duty free access to American market, which will reduce the price of goods by 17 percent,” he added.

He urged the government to initiate efforts to pass the bill pending at the US Senate as private sector is also working jointly with other 13 LDCs’ in this regard. nepalnews.com pb Nov 13 05