Kathmandu, March 7:

The exports of Nepali readymade garments (RMG) to the United States, which is the single largest market, dropped by 14 per cent in terms of value in February.

It is the first month this year that the exports of Nepali textile and apparel products have lost its beat. The RMG exports to the US has been suffering for the last couple of years and slightly recovered in January with exports up by a mere two per cent.

The exports had suffered a loss of 30 per cent in 2004, 41 per cent in 2005, six per cent in 2006 and 48 per cent 2007.

As the US alone absorbs more than 80 per cent of the total Nepali RMG exports, single country concentration is blamed to be one of the major reasons for such a plummet. The industry is already in doldrums for the last couple of years with the crisis deepening further following a complete phase out of quota regime under the Agreement on Textiles and Clothing (ATC) from January 1, 2005.

During the peak time, the total number of industries had crossed 1,200 but today over 95 per cent of them have already shutdown bringing down the figure to only 40 units being operational at present.

The RMG products valued over $2.014 were exported to the US in February 2008, whereas the garment products worth over $2.33 million were exported in the corresponding month last year, reveals the figures provided by Garment Association of Nepal (GAN), today. The continuous fall in exports indicates that the Nepali readymade garment industry is gradually on the verge of a ‘complete collapse’, as the global markets have already been opened for all the competitors without quota restrictions. An industry insider stressed the need of enhancing competitive strength in terms of price and quality of the Nepali products to compete with big suppliers from India and China and other fervent players like Bangladesh, Sri Lanka and Cambodia.

Besides building up competitive strength, diversification of both the markets and products has remained a major challenge for the Nepali garment manufacturers and exporters. While analysing the quantity of garments Nepal exported during the month, it dropped from 4,527 kg in February 2007 to 302 kg this year.

However, a gradual increment of the exports to European Union and the Canadian markets has lit rays of hopes to the garment manufacturers and exporters. These two big and potential markets have already provided duty free access to the exports from the least developed countries (LDCs) including Nepal, which has 20 per cent share of the total exports of garment to these markets.