Labor unrest, fading buyer confidence, loss of competitive edge and political unrest have taken a heavy toll on the Nepalese Readymade Garments Sector. Over the past five months, Nepal’s garments export to the USA has shrunk by 36%. According to the latest statistics released by the Garment Association Nepal (GAN), in the first five months, Nepalese readymade garments exporters exported only $8.03 million worth of products. During the same period in 2007, the amount was $12.54 million. According to the monthly study of export figures, March, April, and May were the worst months for the garments industry. In May, the garments industries exported only $1.1 million which is a major downslide compared to the $2.25 million of May 2007.
eKantipur.com reports:
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.
Years of political unrest after King Gyanendra came to power dealt a big blow to the garments sector. GAN’s year wise export data showed that Nepal’s export to the USA went down by 30% in 2004, 41% in 2005 and 46% in 2006 and 48% in 2007. Ten years ago, there were 500 garments industries all over Nepal. Many of them have stopped operating now which has resulted into job losses of 80,000 people. Garments owners are still hopeful if trade unions do not create any further unrest for the next two years.
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