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Garment export declines further
KATHMANDU, APR 06 -
Nepal's garment exports to US have continued to nose dive even in March. Exports declined by 16 percent to US$ 588.309 as against US$ 678,594 last year. In February, garment exports recorded a decline of 60 percent against the same month last year.
Nepal's garment exports have declined on the whole as a continual trend since expiry of the quota system in January 2005. Garment Association of Nepal (GAN) said Nepal has suffered a decline of 90 percent in readymade garment over the period. The US is the largest market for Nepali readymade garments representing over 70 percent of exports. Every year there is a further decline in garment exports since 2005. According to GAN, there had been 64 percent decline in its export in 2009 whereas it shrank by 45 percent in 2008. In 2007, the exports shrank by 48 percent and 6 percent in 2006 against the exports of 2005.
Garment entrepreneurs said Nepali garments cannot compete in the US as Nepal fails to deliver goods on time. "The strikes, bandas, labour problems and now the power cuts are major factors behind our inability to deliver garments on time," said Udaya Raj Pandey, first vice-president of GAN.
The World Bank has put Nepal on the top 20 list of countries performing poorly in Logistic Performance Index (LPI). Nepal has also been ranked the poorest in South Asia even behind Afghanistan in the LPI report 2010. According to Pandey, entrepreneurs were not taking orders from importers as they fear not being able to deliver due to ongoing culture of strikes and load shedding. There has been a slight increase in demand from the US in the recent days but the factories are not taking these orders.
There has also been an increase in demand from India too after the removal of 4 percent additional duty for Nepali garments recently. Nepali garment entrepreneurs hope to export 15 percent of the total exports to India as there is increasing demand from India.
On the other hand, a high level delegation headed by the secretary, Ministry of Commerce and Supplies is now in the US to discuss the Trade and Investment Framework Agreement (TIFA), a precursor for free trade agreement between the two countries.
Nepali garment entrepreneurs are hoping for duty free access to the US market through this process. They have been lobbying for such access on several fronts and bills are also in the US Senate.
Decline in Garment exports
Year percent
2006 6%
2007 48%
2008 45%
2009 64%
Posted on: 2010-04-07 07:26
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