Growth In Garment Export

Readymade garment has remained one of the major export items of Nepal for last several decades. Boomed in the decade of 1980s, mostly due to the investments from Indian investors to enjoy the duty free and quota provided by the United States of America and other western countries to Nepal, the export of the sector recorded all-time high in fiscal year 2001-02. At that time, the country exported readymade garments worth Rs. 13.12 billion of which more than 86 per cent export was with the US. 

But after the Nepal’s entry in the World Trade Organisation (WTO), the US scrapped the quota system provided to Nepal in 2005, resulting in a sharp decline in export of Nepali readymade garments. Consequently, the garment exports was limited to Rs. 4.28 billion in fiscal year 2014-15 and the number of garment industries has fallen to around 50 from 400 in the fiscal year 2000-01. Beside the US, United Kingdom, Germany, France, Japan, Italy, UAE, Switzerland, Sweden, Spain, New Zealand, South Korea, Ireland and India are the major countries for the export of Nepali readymade garments.

However, in recent years, the export of Nepali garment products has gained a momentum mostly due to the special trade preference given by the US government in the aftermath of 2015 Gorkha earthquake. The special trade preference now allows duty-free tariff benefits for up to 66 garment items including carpets to the US. According to the news report published in this daily on Tuesday, the export of readymade garments has witnessed a growth of 16 per cent during the first eight months of the current fiscal year as compared to the same period of the previous fiscal year. Currently, the export of the garment items constitutes six per cent of the total export to the country. 

At a time when the overall export trade of the country has fallen by 4 per cent, such a significant rise in export of garment items has create rays of hope in the business sector. According to the Trade and Export Promotion Centre (TEPC), Nepal has exported about 9,648,675 pieces of readymade garments worth Rs.  6.18 billion to various countries during the eight months of the current fiscal year. The readymade garment occupies the fourth place among the products exported from Nepal. During the review period, iron and steel occupied the first position with exports of   Rs.  11.63 billion, yarns second with exports of   Rs.  7.51 billion and woolen carpets with exports of Rs. 6.9 billion is in third place. 

Nepal exported about 8,446,601 million pieces of readymade garments worth Rs. 5.33 billion during the same period last fiscal year 2022/23. Pashupati Dev Pandey, president of Garment Association Nepal (GAN), said that the present rate of growth in the export of    readymade garments gives a hope to revive its export and reach in its earlier state of 2000s.  Pandey said that the market of garment is improving now after the COVID-19 pandemic. The country exported 13,189,729 pieces of readymade garments worth Rs. 8.21 billion during the last fiscal year 2022/23. 

The export of readymade garments has been maintained at nearly Rs. 9 billion, with 100 industries operating.  Around 35,000 people have got direct employment. But this is not a satisfactory situation for the country and the government should take special initiatives to improve export by providing facilities to the industries and businessmen. High production cost becomes a challenges due to the fact that Nepali readymade garments are more expensive than their costs in the neighbouring countries by more than 27 per cent.