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Kathmandu Saturday March 24, 2001 Chaitra 11, 2057.
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Concerns
raised over garment industry’s future
Post Report
KATHMANDU, March 23 - Garment
Association - Nepal (GAN) has made an urgent appeal with the government to initiate high
level efforts to secure quota and customs facilities granted to Least Developed Countries
(LDCs). The latest concern to safeguard the country’s largest exportable industry
follows the recent enforcement of African Growth and Opportunity Act (AGOA).
The AGOA, signed between
United States and the Sub-Saharan African countries last November, allows duty free access
to African garments into American markets. As a result of the enforcement of the
agreement, African garments have become cheaper by 35 per cent, all at the unease of
Nepali garment entrepreneurs.
The African agreement, in
addition to causing a remarkable slump in the garment exports towards US market in recent
months, has also prompted US importers to demand undue discounts on the payment of goods
that have already been exported. And the fear of a possible divergence of US garment
importers towards the African products seems coming true with potential garment importers
starting to cancel further orders.
Issuing a press release here
today, GAN has pointed out upon the need to take urgent steps by the government to enhance
the plunging competitiveness of domestic garment products in the international market.
Among others, the association
has also urged the government for quick initiation of the operation of the Birgunj
Inter-Continental Depot, whose construction works were completed recently. The dry port
with railway linkage with the Calcutta and Haldia ports is expected to bring down the
costs of transportation in import/export by 35-40 per cent.
Similarly, in order to
minimize the cost of production and to maximize employment opportunities, the association
has urged to speed up the operation of Export Processing Zone (EPZ) and to transfer the
garment industries into EPZ.
The association, in the press
release, has also demanded that the garment industries should be exempted from current 10
per cent income tax levied on 50 per cent of the total income.
In addition, demanding that
the interest rates on loans extended to the garment industries should be less than seven
per cent, GAN has also urged for a slash in the present rate of export and visa fees,
which the association believes would be helpful to enhance the competitiveness of Nepali
products.
The association, in the press
release, has drawn urgent attention of the concerned authorities to sort out the various
complications that the garment industries are experiencing due to the new budgetary
provision of bank guarantees while importing necessary raw materials for export purposes.
Finally, the association has
expressed deep dissatisfaction over the continued failures of the government to implement
the assurances given by the government during the presentation of the budgets in the past
years.
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