Hope in offing for RMG sector
Kathmandu, October 12:
Thanks to diligent lobbying by industry captains, the days of the on-the-brink Nepali readymade garment (RMG) sector may yet take a turn for the better.
“The sector sees light at the end of tunnel after three years since the end of Multi-fibre Agreement in 2005 that has virtually destroyed the sector,” said Uday Raj Pandey, first vice-president of Garment Association Nepal (GAN). Before 2005, Nepal had duty free access to the American market.
Painstaking lobbying over the last two years for the resumption of duty free access of Nepali readymade garment (RMG) to the United States market and the government’s support in this regard have resulted in new hope for the beleaguered sector.
“Our lobbying this year was excellent, in fact it was the continuous lobbying that started creating a positive impact on the US government,” Pandey added. However, exporters will have to wait till January 2009 — after the US presidential election — to actually see the positive results.
Export of Nepali RMG to the US — the largest market — in August saw a growth by 14 per cent in comparison to July when it had witnessed a drop of 76 per cent.
Around $692,883 worth Nepali RMG was exported to the US in August while it was worth $519,524.84 during July.
“Prime Minister Pushpa Kamal Dahal ‘Prachanda’ during his visit to the UN also lobbied for Nepali RMG,” Pandey said adding that Minister for Foreign Affairs Upendra Yadav and Finance Minister Dr Baburam Bhattarai also did their share of the lobbying during their visit to the US. “Their efforts have given us great hope,” he said.
According to Pandey, the duty charge on Nepali RMG is about 18 per cent.
“Subsequent to the formation of the new government in the US by January next year, we are extremely hopeful of getting duty free access by February,” he added.
“Our surmise is that once we are able to get duty free access to the American market , within a year we would be able to export RMG worth $150 million and generate employment for above 40,000,” Pandey said.
“Importers have started inquiring about Nepali RMG but in order to encourage American buyers, commitment from trade unions and their sister organisations is a must,” he said.
He also pointed out that the country was creaking under the rigours of a huge trade deficit and that unless there was strong commitment from the workers, it would not be bridged.
Pandey also said that he was disheartened that the Constituent Assembly had not yet given its approval to the Export Promotion Zone (EPZ) Bill.
Since some time, the RMG sector has been demanding a garment-processing zone (GPZ) — a part of EPZ — be established in Simra of Bara district for the promotion of RMG.