RMG export to US suffers a heavy decline

Export of Nepali readymade garments to the United States (US), which is the single largest market, suffered heavily. The US alone absorbs more than 80% of the total Nepali garment exports, a single country concentration is blamed to be one of the major reasons for such a plummet.

 According to the data, the month of August 2007 saw a decline of 27% in terms of value, and generally the garment exports to the US has been suffering from the very beginning of the year, as it witnessed a whopping decline of 54% in January, 64% in February, 47% in March, 3% in April, 63% in May, 42% in June and 45% in July.

Export had suffered a loss of 30% in 2004 and rose by 41% in 2005. However, it slowed down with a marginal drop of 6% in 2006. Garment and apparel products valued at over US $1.83 million were exported to the US in August 2007, whereas garment products worth over $2.49 million were exported in corresponding month last year reveals the figures provided by the Garment Association of Nepal.

The continuous fall in exports indicates that the Nepali readymade garment industry is on the verge of a "complete collapse," as global markets have already been opened to all competitors without quota restrictions.

An industry insider stressed on the need for enhancing competitive strength in terms of price and quality of Nepali products to compete with the big suppliers from India and China and other fervent players like Bangladesh, Pakistan, Sri Lanka and Cambodia. Besides building up competitive strength, diversification of both markets and products has remained a major challenge for Nepali garment manufacturers and exporters. A gradual increment in export to the European Union and Canada has lit rays of hopes for garment manufacturers and exporters. These two big and potential markets have already provided duty free access to exports from least developed countries, including Nepal. However, Nepal's share of garment exports to these markets is still as low as 20% of total exports.