Garment export to US plummets to zero.

KATHMANDU: Nepali garment export is literally on deathbed. In June, no garments were exported to the US — one of the largest markets of Nepal.

Lack of proper export facilitation, regular labour unrest and political instability has brought Nepali Readymade Garment industry to such a pass that the total garment export to US in June was nil, reveals the Garment Association Nepal.

“Nepali garment industry, with a history of more than a decade, is on the verge of extinction,” said Uday Raj Pandey, first vice president of GAN.

“There is no production, as there is no order from the US,” he said, adding that there are no orders even for July and August. “For new orders we have to wait till September-October,” Pandey added. Even if they get orders, they are in no position to fulfil them, as a number of garment industries have been operating partially, just to sustain. Political instability and labour unrest have been bleeding the industries white.

“The government has to bring export promoting budget with long-and short-term business plans for the revival of the export industry,” he added.

However, export to Europe is normal, as Nepali garment industry has duty free access to the European market. “But that will also expire in December,” he said, adding that the process for its renewal has begun. Currently, about 70 per cent garments go to India, with the rest going to the European countries.

In 2004, there used to be around 350 industries but after quota regime came to an end, only a few of them are being operated.

The phasing out of the quota system, carried out in tune with the 1990 World Trade Organisation Agreement on Textiles and Clothing, known as the Multi-Fibre Agreement, Nepal’s inability to restructure the sector, political instability and the rise of unionism dealt a near-lethal blow to the industry.

According to the industrialists, it’s not the MFA phase-out but the political scenario and labour unrest that are to be blamed.

Garment industries due to their labour intensive character were known for their large employment generation capacity but due to fall in exports both the industrialists and workers are suffering.

Export of ready-made garments has plummeted by over three times since 2002. In the fiscal 2002-03, garments worth Rs 11.5 billion were exported. It came down to Rs 4.5 billion in 2008-2009. An industry that once provided direct employment to up to 50,000 people, now employs just a few thousand people.

Source : The Himalayan Times