Readymade garment exports plummet

Kathmandu, August 10:

Exports of the Nepal readymade garment (RMG) to the US has witnessed a whooping fall of 76 per cent in July. Nepal exported RMG worth only $519,524.84 to US in July.

When the Nepali readymade garments was at a high, there were more than 1,200 industries but at present more than 90 per cent of these have already been shut down. Nepal exported RMG products worth $2.650 million in January, $2.014 million in February, $991,820.70 in March, $1.266 million in April, $1.109 million in May and $929,366.08 in June, according to the data provided by Garments Association of Nepal (GAN).

There was a slight increase in January by two per cent.

The continuous fall in the exports indicates that the Nepali RMG 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.

“Political instability has detracted buyers,” Prashant Pokharel, President of GAN said adding that the main cause for the fall in exports is the phase out of Quota System since 2005.

Showing his dissatisfaction over the lack of raw material in Nepal, Pokharel said, “We have to import the raw materials from China and India, which adds high transportation cost resulting in high production cost.”

One of the major exports of Nepal, RMG is continuously going down since last couple of years.

“A team of delegates is going on the US visit soon along with president of Federation of Nepalese Chamber of Commerce and Industry (FNCCI), Kush Kumar Joshi that

will urge the US for a duty free access,” Pokharel added.

However, India has emerged, in recent times, as one of Nepali RMG’s largest buyers.

“Though we do not have a proper data, there is a 100 per cent increase in the exports of Nepali readymade garments to India compared to the last July,” he said.

The export of RMG to the US, which is the only largest market, dropped by 14 per cent in terms of the value in February.

The United Sates’s market alone absorbs 80 per cent of the total Nepali RMG exports.

The total export has suffered a loss of 30 per cent in 2004, 41 per cent in 2005, six per cent in 2006 and 48 per cent in 2007.