Prior to the phasing out of the quota system, Nepal was exporting Rs 12 billion worth of garments and was generating around 500,000 jobs in the sector. During that time, the sector had drawn investment to the tune of Rs six billion.
Since then, over 85 per cent of garment factories have pulled down their shutters and in the last fiscal year exports fell to Rs 4.26 billion. Currently, only 50 readymade garment factories are in operation, according to Garment Association Nepal (GAN).
But endorsement of Trade Facilitation and Trade Enforcement Bill by the US House and Senate has once again generated hopes for revival of the dying industry. This is because transformation of the Bill into an Act will make Nepali garments 17 per cent cheaper for buyers in the US.
“This arrangement definitely provides us an advantage. But to capitalise on it, we also need the government's assistance,” said GAN Acting President Chandi Prasad Aryal. “In this regard, the government must provide us income tax rebate for five years, provide 10 per cent cash incentive on garment exports, help us obtain cheaper loans and address labour-related issues.” (SH)
ALCHEMPro News Desk – India
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