Kathmandu, February 22:

Garment exporters today called for freeing their exports totally from taxes in order to boost the sector.

“Global recession has forced countries to reduce their foreign labour force, hurting Nepali exports, a major foreign currency earner,” said Uday Raj Pandey, first vice-president of Garment Association Nepal (GAN).

According to Pandey, if the total export is declared tax free, it would generate more employment opportunity here and more workers laid-off due to recession couldf be rehabilitated.

At present, the garment industry is providing employment to more than 8000 people. “Garment, pashmina and carpet industries are the major sectors which can create large employment opportunities and increase foreign currency inflow. Therefore, these sectors should be given special attention,” said Pandey.

Talking about the present export scenario of Nepali readymade garments (RMG), Pandey said, “We were quite hopeful of getting orders from 2009 as there were a number of enquires made by the end of 2008 but all that has come a cropper as the purchasing capacity of people in the US has declined badly.”

“Though there were enquiries earlier, no orders were palced nor advance payment done. Thus, businessmen here were not confirmed about getting their payments on time and as a result export declined so much,” Pandey said.

During January, Nepali RMG export to US witnessed a fall of 73 per cent, according to export data on January compared to the same period last year. The total RMG exported to US in January was worth $706964.17 whereas it was Rs 2,650,747.91 during the corresponding period last year.

Pandey said, “We are in at wait and watch mode as the recession has started hitting the export sector hard.”

Garment export has been facing troubled ever since the Multi Fiber Agreement (MFA) ended on January2005. A delegation will soon leave for the US to lobby for Nepali RMG getting duty free access to the US market.

As long MFA lasted, the RMG sector had relied on the quota provided by the American market which consumed over 80 per cent of its total exports. But the post-MFA scenario has left Nepal with no option but to compete with other countries.