Tuesday, 7 February, 2023

Export of garment products decreases by 10 times in two decades


By Ajay Chhetri, Kathmandu, Mar. 31: A drastic decrease in the export of garment items has been recorded in the last two decades owing particularly to the lack of facilitating government policy.

Income earned from the export of garment items was worth Rs. 4.873 billion in fiscal year 2019/20 whereas Nepal had exported garment products worth Rs. 40 billion in 2000.

With slash in the export, employment in the garment industry has also witnessed a sharp decline. Some 400 thousand people were employed in the garment industry in 2000 whereas the number of employed in 2019 was recorded as 25 thousand, according to a report of the Garment Association of Nepal.

In the face of a huge and widening trade deficit, scaling-up of the garment industry seems challenging yet it is one of the potential industries for foreign exchange and employment opportunities. 

Ashok Kumar Agrawal, general secretary of Garment Association of Nepal, emphasised on supportive government policy to revive garment industry as he said, "If there is support of government in transportation of goods, improvement in skills of labours, and effective diplomacy to diversify trade relation, the industry has potential to generate more than 50,000 employments in next two to three years".

At present, Nepal has privilege of duty free access in Australia, Canada, Japan and European countries that makes its product cheaper than that of the other competitive countries. However, Agrawal added that Nepal's garment industry was burdened with the hefty shipping cost and labour cost of Nepal was one of the highest among South Asian countries, and the cost of financing was also high, which have been posing challenges to potential growth of the industry.

As the garment industry is a treasure for foreign exchange, its development and expansion largely depends upon the government agility to upping the ante in regional and international organisation. Nepali garment products are exported to the countries such as the USA, the UK, Australia, Japan, Canada, Germany, Italy, France, India and Spain. 

Although garment industry is in the top priority list that deserves the facility of the government, it is struggling hard to catalyze its expansion. The development of the garment industry is crucial to amplify foreign exchange reserves.