Exports of readymade garments, pashmina and leather products from Nepal will have duty-free access to the US market. This facility will last up to 2025. It’s expected to give a new lease of life to the readymade garment industry in Nepal, which was on the verge of collapse since the expiry of the multi fiber agreement in January 2005.

The garment industry was Nepal’s top exporter one-and-a-half decades back. The country can now expect more investment and employment in the garment sector and factories that manufacture ancillary products. Nepali apparel entrepreneurs believe that the US market can help resurrect the garment industry. To be able to fully capitalise on preferential treatment extended by the US, apparel entrepreneurs have sought an export incentive of up to 10 per cent for five years, subsidised interest rates from banks and financial institutions and abundant supply of power in factories.

There were over 400 apparel factories across the country that provided employment to 4,50,000 people when garment export was at its peak in 2001. About 90 per cent of readymade garments produced in the country were exported to the US. Readymade garments then had a 20 per cent share in total exports. Their ranking slipped to fifth position in overall exports of 2014-15.