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Nepal’s garment industry enjoys revival

140419-KOSH_NP_GARMENT-310_207Nepal’s once-languishing garment industry is in the midst of a as peace and political stability have convinced foreign buyers to return, and demand from abroad has instilled confidence in garment entrepreneurs.

The garment industry in Nepal was almost on the verge of collapse. But that bleak scenario has changed in recent months,” Garment Association of Nepal President Udaya Raj Pandey told Khabar South Asia.

Buyers who normally import from countries like Bangladesh and Cambodia now consider Nepal an option, Pandey said. “This has encouraged us. We are hoping that good days are ahead for garment industries in Nepal.”

According to the Trade and Export Promotion Centre, Nepal exported NRs 2.72 billion ($27.8m) in garments in the first six months of the current fiscal year. This is 50% more than Nepal’s export of garment products during the same period of last fiscal year.

“Both external factors and the domestic situation seem to have brought about this situation,” Commerce and Supplies Ministry Joint Secretary Jib Raj Koirala said.

Recent election-related violence in Bangladesh and Cambodia’s January labour strikes helped fuel Nepal’s improvement.

Through the 1990s, the garment export industry was Nepal’s largest, providing more than 50,000 jobs and hundreds of factories operating day and night to manufacture export products for clients in the USA, Europe, Canada and Japan.

But its booming industry declined due to a phase out of protectionist quotas by the World Trade Organisation (WTO), instability triggered by the Maoist armed insurgency, and the rise of trade unionism. Ready-made garment exports were worth more than NRs. 11.5 billion ($117.5m) in fiscal year 2002-2003. By fiscal year 2008-2009, they’d plummeted to NRs. 4.5 billion ($46m).

The recent, gradual revival is spreading hope of more job opportunities.

“The garment industry used to provide employment opportunities to a huge number of people,” said Bidur Khatri, who is planning to go to the United Arab Emirates for work. “No one wants to go abroad for works if decent jobs are available at home.”

But some experts believe more should be done to boost the sector.

“It is high time the government worked towards creating political stability and ensuring that there are no general strikes to boost confidence of our industrialists and foreign buyers,” said Society of Economic Journalists-Nepal (SEJON) chairman Bigyan Adhikari.

Initiatives like zero tariffs need to be put in place to attract foreign investment, he said. “Any decision on the part of government to provide export subsidies and soft loans to help recover these ailing garment industries would greatly help promote Nepal’s garment products abroad.”

Report: Kosh Raj Koirala
Source: Khabar South Asia

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