Himalayan News Service

Kathmandu, May 13:

The garment industry of Nepal is facing a tough time in the wake of the quota system expiring on January 1, 2005.

The once-thriving apparel sector, which has contributed a large amounts to the national economy has now virtually collapsed, speakers at the 16th annual general meeting (AGM) of Garment Association of Nepal (GAN) said.

Inaugurating the AGM of GAN, Kirti Nidhi Bista, vice-chairman at the council of ministers stressed on the need of market diversification. “As the multi-fibre agreement has now expired, we need to explore markets besides the United States. The determining factor for the survival of garment industry would be competitive pricing and quality products. Europe could be a probable market for Nepali products,” said Bista.

Commenting on the wilful defaulters’ issue, minister Nidhi said that the perpetuation of wilful defaulters is morally unacceptable. The government would provide support to sick industries on one hand, whereas wilful defaulters would be denied economic support, he added.

Kiran Prakash Sakha, president, GAN said that embracing the open economy policies has both good and bad impacts on the national economy. He added that the open economic policy has marred the Nepali garment industries most.

Not long ago, garment export’s contribution to foreign currency earnings was about 35 per cent but for the last two years, it has suffered a lot and cancellation of quota system has led to further degradation, Sakha added.

Though strong lobbying has been done for duty free access of Nepali garments to the United States, Bhotekoshi agenda stood as a barrier for the purpose, he added.

The Trade Act 2005 forwarded in the US senate would bring a positive impact to garment industries of the least developed countries and diplomatic approach from the government is needed for its implementation, Sakha said.

The government’s interest in establishing a garment processing zone (GPZ) is a noteworthy attitude. The government should also start its homework on introducing a separate labour act, export policy and other relevant policies for making the industry sustainable, Sakha added.

For the preservation of export industries, the role of banks would be of high importance. The government, considering the changing scenario, should also work for ratifying the banking policies, Sakha viewed.

The government is apathetic towards the recommendations forwarded by the private sector, felt Rajesh Kaji Shrestha, president of Nepal Chamber of Commerce (NCC).

Despite the prevailing insurgency and instable political scenario, the garment industry has survived so far, but now the industry needs special attention from the government for increasing exports, said Binod Bahadur Shrestha, president at Federation of Nepalese Chambers of Commerce and Industry.

Best five exporters of 2003 and 2004 were also honoured at the programme. Cotton Comfort Pvt Ltd, Bikash Fashion Industry Pvt Ltd, Shangrilla International Apparels Pvt Ltd, Pravha Apparels and Memento Apparels were the top five exporters of 2003.

The largest exporters of garments in 2004 were Cotton Comfort Pvt Ltd, Rara Apparels Pvt Ltd, Memento Apparels, J D Apparels and Bikash Fashion Pvt Ltd.