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Nepal’s textile industry hanging by a thread
PARSA, JUN 02 -
A large number of textile factories in Parsa district are on the verge of closure due to unclear government policy, unfair competition with foreign products and widespread power outages.
About two dozen textile factories are in operation currently, down from
nearly one hundred a decade ago, said Pitamber Munka, proprietor of Crown Textile.
Big manufacturers such as Hetauda Textile Industry and Annapurna Textile were closed down over the last one decade. About 50 percent of the factories along the Birgunj-Pathlaiya corridor have also shut down. Ashok, Himganga, Blue Heaven and Parag closed down recently.
Most of the factories along the Sunsari-Biratnagar corridor have also closed down. There were about half a dozen factories in the area.
As the result of the closure of these labour intensive factories, a large number of workers have lost their jobs.
Om Prakash Sharma, proprietor of Parag Textile and a Constituent Assembly member, said that about 50,000 workers were out of a job. Sharma added that when his small factory closed, around 150 workers became unemployed. Nepal is importing textiles in large quantities from India and third countries although Nepal used to be a textile exporter of once.
Entrepreneur Mukna said that local factories were producing 50 million metres of textiles against the demand of 330 million metres. Entrepreneurs complained that labour unrest, power crisis, changes in tax rates and imposition of value added tax were among the major causes behind the textile industry's woes.
Sharma said that the tax regime must be rational. "Textile companies in India are enjoying up to 50 percent subsidies but we are being charged higher taxes," he added.
Ramesh Gadia, manager of Nobel Textiles, said that they were forced to import raw materials from India as domestic production was inadequate.
Gadia added importing raw materials increased production cost by 25 percent due to customs and freight, making Nepali fabrics uncompetitive compared to Indian and Chinese products.
Posted on: 2010-06-03 07:47
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