E-Kantipur

KATHMANDU, MAY 26 -

Despite major markets—the US and India—not absorbing Nepali readymade garments well, their export has increased by 12.8 percent. Trade and Export Promotion Centre (TEPC) statistics show that Nepal exported readymade garments worth Rs 2.99 billion in the first nine months of the current fiscal year. Nepal had exported garments worth Rs 2.64 billion in the same period last year.

Garment exporters attributed this increment to the rise in export to European markets. “This growth is mainly due to rise in export to Europe,” said Uday Raj Pandey, president of Garment Association of Nepal (GAN). According to Pandey, European Union (EU)’s new Rule of Origin also helped increase the export.

Of late, Europe has emerged as the biggest market for Nepali readymade garments, absorbing 60 percent of the total export. According to GAN, readymade garments worth Rs 3 billion were exported to Europe last year.

Unlike US and Indian markets, from where Nepali manufacturers get orders in bulk from leading retail chains, orders from Europe are comparatively small, but have high value. “There are around two dozen exporters who’re directly dealing with European markets,” said Pandey.

Despite this surge, exporters say it is too early to say that export has bounced back. “The 12 percent growth should be considered satisfactory amid uncertainties,” said Pandey. “Good news is the export hasn’t declined.”

Export to the US and India were not satisfactory due to various reasons such as Indian budget’s decision to impose 10 percent excise duty on import of all branded goods and scrapping of the quota system in the US.

Nepal recently applied for the Generalised System of Preference (GSP) facility for 11 readymade garment items and a pashmina item in the US. The US reviews the GSP facility that provides duty-free entry for up to 4,800 products from 129 countries every ten years. If Nepal gets GSP facility, Nepali garments will become 17 percent cheaper in US market.

For Nepali readymade garments, the US used to be the largest market with the export touching Rs 10 billion mark in 2000. After reaching $171.39 million mark in 2003, Nepal’s export to the US is on a continuous decline, plummeting to 60.51 million in 2010.

Pandey says both international buyers and local manufacturers are on wait and watch strategy until May 28. “Currently, there are no new orders from international buyers,” said Pandey. “If the current political impasse ends on May 28 and the political situation stabilises, then only we’ll get new orders,” said Pandey.

 

Posted on: 2011-05-26 09:28

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