According to the statistics released by the Garment Association - Nepal (GAN), Nepali readymade garment manufacturers exported a mere US$ 8.03 million worth of products to the US during the period. During the same period last year, their shipments had amounted to US$ 12.54 million.
A study of the monthly export figures reveals that March, April and May were the worst months for the garment industry with deliveries down 66, 49 and 51 percent respectively.
“Exports in May were a meager US$ 1.1 million. This was a drastic drop from May 2007 when US$ 2.25 million worth of garments were sold abroad,” a GAN official informed the Post.
Exports went into a downward spiral after the tarai banda a few months ago, which crippled trade through tarai-based customs for 16 days, said entrepreneurs. The banda prevented manufacturers from delivering their orders on time resulting in their losing out on new orders to other countries. GAN's data further shows that the export of the country's once largest exportable commodity is just one-eighth of what it was during the same period in 2003.
Nepal's readymade garment exports to the world's largest market had been floundering since 2002 when the US provided duty-free market access to Caribbean and Sub-Saharan countries, Nepal's main competitors in the US.
While the phase-out of quotas in international apparel trading in 2005 came as another blow to Nepal's exporters, political instability, labor troubles and falling competitiveness only added to their woes.
GAN's year-wise export data reveals that Nepal's exports to the US plummeted 30 percent in 2004, 41 percent in 2005, 6 percent in 2006 and 48 percent in 2007 compared to the preceding year.
As a result, the number of factories in operation has dropped to about a dozen from over 500 units operating a decade ago. This has left some 80,000 people, half of them women, out of a job.
Entrepreneurs said that the industry could still bounce back if trade unions reached a minimum understanding with producers and pledged not to strike for the next two years.
They underscored the need to establish a garment processing zone at the earliest to reduce transit transportation costs and other components of the cost of production.
“The government should also make stronger efforts to obtain duty-free market access to the US,” said entrepreneurs. According to them, the facility would free Nepali garment exports of the 18 percent customs duty which is now being imposed on them, thereby raising their competitiveness in the world's largest apparel market.
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