Kathmandu, December 14

Domestic garment manufacturers have urged the government to announce export incentives through the supplementary budget to boost exports of Nepali apparels.

Informing that Nepali garments are up to 18 per cent more expensive in the international market as compared to garments from other countries, local apparel manufacturers have demanded the government to provide 10 per cent export incentive on total export value, which according to them, is a must to bring down their cost of production.

“Our cost of production is higher compared to other countries. This has made our products dearer in the international market,” said Chandi Aryal, president of Garment Association – Nepal (GAN), adding that export incentive from the government will bring down production cost of domestic garments which will make Nepali apparels price competitive in the foreign market.

Citing an example of the garment industry of Bangladesh, Aryal said that Bangladesh has progressed a lot in garments as the government there has given 10 per cent export incentive to local apparel manufacturers.

“Nepal and Bangladesh both started garment exports during the 80s. While Bangladesh has progressed a lot in garment industry and exports garments worth Rs 28 billion annually, Nepal is lagging behind, with garments worth only Rs five billion being exported every year,” said Aryal.

Garment manufacturers say that Nepali garments have high demand in the European Union (EU), United States of America and India.

GAN officials also stated that implementation of ‘No Work, No Pay’ provision introduced by the Industrial Enterprise Act is crucial to bring down production cost in Nepali garment industry.

“Garment factories basically operate for eight months in a year and the remaining four months is the off-season for us. However, domestic garment companies are paying its employees for the entire year,” Aryal said.“Implementation of ‘No work, No Pay’ policy will help bring down the price of domestic apparels.”

Garment manufacturers have also asked government to allocate necessary budget to increase participation of Nepali manufacturers in international sourcing fairs from where they can take orders. As per them, high labour wages, huge transportation cost, power shortage and unwanted strikes are also major aspects that have pushed up production cost of Nepali garments.

“The supplementary budget, besides announcing export incentive, should also emphasise on these issues to promote Nepali garment industry,” added Aryal.